Monday, July 23, 2012
Mobile Device Ads on Rise
Story first reported from forbes.com
Worries that mobile advertising will never amount to much have investors worries about even relatively strong companies such as Google and Facebook. And there’s reason for concern, from whether people want their little smartphone or even tablet screens cluttered with ads to whether advertisers will ever be able to know, for instance, that someone who sees an ad then went into a physical store and bought something.
For now, though, the advertisers who command the marketing budgets don’t seem too concerned. According to a new report, search ads in particular are growing rapidly on mobile devices, especially tablets. The study, from online ad management firm Marin Software, points up several interesting trends, pretty much all of them a positive for advertisers and search engines–mainly Google, since it still owns 81% of all search ad spending.
First, a lot more clicks on search ads are coming from mobile devices, says Marin Marketing VP Matt Lawson. In the U.S., mobile devices accounted for 18% of paid search clicks, up from 14% in the first quarter. And in an indication of a surge in tablet ownership and use, the share of clicks on tablets, at 8%, was up 33% in the quarter.
More important to advertisers, those tablet clicks are paying off. The cost per click for search ads on tablets is 18% lower than for ads on desktops or laptops. And the click-through rate is 42% higher. Putting both together, advertisers are getting more bang for the buck on tablet ads.
Lawson says that may not last forever. One reason for the difference is that not as many marketers are aiming ads specifically for tablets, so those that do don’t have as much competition on keywords. Indeed, the cost-per-click gap is already starting to close.
Still, the results are prompting marketers to shift their budgets toward tablets. The share of Marin’s 1,800 advertisers’ and agencies’ overall online ad spending that goes toward tablet campaigns rose 40% in the second quarter alone–from 5% of budgets in March to 7% by June.
Not least, Lawson says, the conversion rate–ad industry lingo for clicks that lead to a sale, a lead, or another desired action–on tablets is comparable to desktop ads. In other words, it’s better than on smartphones, which still lag behind desktops in conversions.
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