Google search ad click volume is still on the rise as CPC growth trends down and spend growth slows. This is according to reports from performance agency Merkle and campaign management platform Marin Software.
Google’s slowed down spend growth from the previous quarter is a continuation of a trend that began in the final quarter of 2017. This is according to Merkle’s first quarter 2019 digital marketing report. Click volume increases have sustained spend as CPC growth has slowed over the past five quarters. The first quarter data from Marin Software also demonstrates these trends, with click volume continuing to rise as CPCs have fallen since the second quarter of 2018.
Mobile driving click volume growth, lower CPCs
Mobile continued to be a key driver of higher click volume and lower CPC growth as mobile clicks still, on average, cost less than they do on desktop. Overall, phone search ad spend increased by 47 per cent year over year among Merkle clients. At the same time, desktop search spend slowed to only 2 per cent. Phone click share rose to 59 per cent, 8 per cent more than a year ago. Across Marin’s platform, mobile search spend share has jumped between 41 and 43 per cent in the past year.
Shopping vs text ads
Google shopping ads continue to take spend share from text ads among Merkle clients running both formats. Overall, the spend for text ads dropped by 12 per cent, while Shopping increased by 41 per cent from the year before. Shopping ad spend on phones rose even more so, hitting a ten-quarter high with a 77 per cent increase.
This increased investment in Shopping comes with higher revenue-per-click (RPC) on desktop for retailers compared to non-brand text ads. This is 18 per cent higher than the first quarter of 2019. RPC for Shopping ads on phones is comparable to that of text phone ads.
Shopping impressions on phones also noticeably rose by 127 per cent in the first quarter. This is up from 60 per cent in the third quarter of 2018 and indicates that Google is activating more Shopping ads in queries.
Showcase Shopping ads, the ads with numerous images that normally appear on broad queries, accounted for 8 per cent of shopping clicks last quarter. This is 3 per cent more than a year ago. 22 per cent of Marin advertisers are running ads through Google Shopping with 39 per cent of spend share going to those formats. This is 36 per cent more than the previous two quarters.
ITP impact on audience targeting
Apple’s update to Intelligent Tracking Prevention (ITP 2.1) in March has had a further impact on audience-based advertising. Merkle reported that the share of ad traffic from cookie-based remarketing such as RLSAs has dropped since the September release of ITP 2.0. Meanwhile, non-cookie based Similar and Seasonal Audience lists saw traffic share increase during the same period.
Apple iOS devices and desktop Safari generated more than half of Google paid search clicks in the first quarter of Merkle clients. Android devices accounted for 23 per cent of Google search ad clicks.
Why is this important?
Google’s primary revenue source still mostly comes from search ads. With competition from Facebook, Instagram and Amazon, expect the focus on automated campaigns, optimisations, new formats and inventory opportunities to remain.
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