RKG released our latest Digital Marketing Report today, covering Q1 2014. As always, the report spans a wide breadth of the digital marketing industry including paid and organic search, social, mobile, comparison shopping engines and display advertising.
The first quarter of 2014 saw continued growth across channels, as total paid search spending increased 17% from last year and organic search share stayed relatively constant. Mobile devices played a notable role in growth trends, while Product Listing Ads (PLAs) continue to drive paid search growth for retailers.
Image-based product ads, including Google’s PLAs and Bing’s Product Ads, are greatly outpacing text ad growth in terms of both traffic and ad spend. While text ad spending rose by just 6% year-over-year on a 4% increase in clicks, product ads saw a 69% increase in ad spend and a 51% increase in click traffic from Q1 of 2013.
While desktop visits for organic search are declining, mobile clicks in Q1 grew by 29% over this time last year. Mobile accounts for 33% of organic traffic on Google and 36% on Yahoo. And while mobile clicks contributed just 16% of Bing organic traffic, this figure doubled from Q1 of 2013.
Paid search data shows similar trends. Smartphones and tablets each account for 18% of paid clicks, together contributing 36% all paid search traffic. Comparing this quarter’s data to Q1 of last year, we see that smartphone clicks increased by 64%, while tablet clicks increased by 56%. Meanwhile, desktop traffic declined by 3% compared to this time last year.
Although the change just took place last week, we also looked at how quickly Not Provided share is ramping up for paid search following Google's announcement that it would soon no longer pass raw user search queries to AdWords advertisers via referrer. While a small percentage of ad clicks did not pass queries prior to this change for other reasons, Not Provided immediately reached 37% of Google paid clicks on the day of the announcement. Over the next several days, Not Provided share has been steady at about 45%.
Some additional highlights from our Q1 2014 findings include:
- Google paid search spending grew 17% Y/Y in Q1, a small deceleration from 19% growth in Q4. Paid clicks were up 10%, while CPCs increased 6%.
- Paid search spending on Bing Ads, which includes Bing and Yahoo, also grew 17% Y/Y. Paid clicks rose 16%, while CPCs were just 1% higher.
- Among retailers, Product Listing Ads (PLAs) generated 29% of total Google paid search clicks in the quarter and nearly half of non-brand Google paid search clicks. ROI for PLAs was 14% better than that for comparable text ads.
- Bing Product Ads showed improvement in Q1 and contributed 12% of participating advertisers’ nonbrand revenue from Bing Ads.
- Mobile generated 36% of paid search clicks, with that figure split fairly evenly between smartphones and tablets. Smartphones accounted for just 7% of spend though, compared to 20% for tablets.
- According to Google’s conversion tracking data and estimates, cross-device conversions amount to 20% of conversions that Google attributes to smartphones for RKG clients, but just 7% of conversions across all device types.
Organic Search & Social
- Organic search produced 30% of site visits in Q1 2014, down from 33% a year earlier. Google drove 82% of total U.S. organic search visits and 87% of mobile search visits.
- Mobile generated 31% of organic search visits in Q1. The iPad and iPhone each drove more organic search volume than all Android devices combined.
- Not Provided query share has remained stable since October of 2013 and now stands at an average of 85% of Google search visits.
- Facebook generated 54% of social media referrals in Q1. Pinterest has shown rapid growth, but with a wide range of influence from site to site. For the top quartile, Pinterest generated 47% of social referrals, but for the bottom quartile that figure was just 3%.
- Mobile devices accounted for 37% of social media referrals in Q1, up from 22% a year earlier.
Comparison Shopping Engines
- Among advertisers running both Amazon Product Ads and Google PLAs, RKG found Product Ads CPCs running 31% higher, due largely to Amazon maintaining its rate card from Q4 to Q1. Consequently, Product Ads volume suffered in comparison.
- Nextag’s share of CSE spending declined to 2% in Q1 this year, from 13% a year earlier. Engines with more flexible bidding systems like PriceGrabber and the eBay Commerce Network saw gains.
- While revenue per click is nearly identical between Facebook Exchange (FBX) ads and other display ads, CPC remains 33% lower on Facebook, resulting in superior ROI.
- For advertisers actively advertising on the Google Display Network (GDN) and running AdWords paid search ads, GDN accounted for 6% of total Google spending.
- Last touch attribution models show affiliates accounting for more than 15% of revenue in Q1, up from 11% a year earlier. Email continues to show year-over-year declines in last touch revenue share, likely the result of mobile email checking and the relegation of marketing emails to a promotion tab in Gmail’s tab system.