eMarketer reported the study done by ‘The Search Agency’ showed that 1 out of 4 paid search clicks are from mobile device (tablet or smartphone) in Q4 2012 (YoY growth was almost doubled). An interesting point want to note was the CPC (or PPC) change in the past year:
- Computer / Desktop: CPC of a click from computer was increased 14% YoY (from $0.56 to $0.64)
- Tablet: CPC increased 20% YoY (from $0.4 to $0.5)
- Smartphone: CPC, on the contrary, dropped from $0.36 to $0.3 (-20% YoY)
From the chart in emarketer’s page, share of click from Tablet and smartphone was also double. But why the CPC of Smartphone dropped?
One of the possible factor was that more advertisers are more serious in managing their campaigns running on mobile device when % of click and % of spending has reached a significant level. Smartphone traffic, is notorious for its click quality and lower conversion rate. Some advertisers may pull out smartphone traffic or lower the bid price
for the campaign. At the same time, Google, as well as Bind Networks might also increase the discount rate for smartphone traffic, as (1) a way to compensate advertisers for lower conversion rate; and (2) retain advertiser for this growing property.
On the contrary, in the traditional battlefield ‘desktop’ or ‘PC’, the growth in PPC is not surprising at all. It can be as a result was more keen competitions among advertisers. It can also be a result of platform change. When comparing to 5 to 6 years ago, I can say Google has put far lot more ad at the top of the page. Beyond increasing the ad served to users, the platform might have CPC algo changed so that advertiser need to pay higher for thier ad YoY. From a platform point of view, this is a natural remedial acton to maintain a high annual revenue growth rate when the search volume growth rate has been stagnant.
Undoubtedly, tablet is the rising star in mobile traffic with its fairly good conversion rate when comparing to desktop traffic. I would not be surprised in the near future, the user time spent on tablet will be over that of desktop. Together with user geo-location information, a lot more targeting capability and new ad product will be available in the market soon.