Merkle Q4 2017: Search ad click growth fell, ad spend rose 23% across Google, Bing, Yahoo

Overall, in Q4 2017, search ad click volume growth slowed by 9 percent as the average cost per click (CPC) increased 14 percent. Spend rose 24 percent year over year. Engagement and conversion performance from search ads improved, however, and clicks from phones accounted for 50 percent of all clicks for the first time. Those are among the findings reported in Merkle’s Q4 2017 Digital Marketing Report.
Source: Merkle
These search ad trends are consistent with the Q4 performance trends reported by Marin Software last week.
Google ad spend growth slowed slightly from Q3
Spending on Google search ads increased 23 percent overall year over year in Q4 2017. Retail and consumer goods spending on search ads rose 24 percent during the holiday season, according to Merkle’s Q4 2017 Digital Marketing Report.
That growth in search ad spend is actually a slight deceleration from Q3. Search spend jumped 38 percent on mobile and 21 percent on desktop. Click volume growth slowed sharply to 8

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Insights from our 2017 holiday retail survey

By most accounts, the holiday shopping season was an e-commerce success, with final tallies beating analyst estimates. Earlier this month, we asked e-commerce teams about their holiday marketing strategies — planning, budgeting and expectations — and what they did differently this year from last year.
Nearly 100 respondents shared their feedback. The majority (57 percent) of respondents worked in-house, while 43 percent were at agencies. The client/company size represented skewed to the smaller end, with 60 percent of respondents working with companies with annual revenues below $25 million. Nearly 13 percent represented companies with annual revenues over $500 million.
There were several interesting findings from the survey. Here are some of the highlights from the final results.
Holiday budgets rose across most platforms
Overall, search and social budgets increased this holiday season over the previous year, with 70 percent of respondents saying they increased budgets on both channels. Display retargeting budgets for more than half of respondents (56 percent) also increased

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Marin: Search CPCs outpaced spend growth in Q4 2017

Paid search spending increased by just over 10 percent year over year in Q4 2017 across Marin Software’s customer base. CPC growth doubled that of overall spend with an increase of roughly 20 percent year over year.
Mobile CPCs increased 25 percent year over year, accounting for 53 percent of total spend. Google took 89 percent of search spend share, with 11 percent going to Bing. The findings are part of Marin’s Q4 2017 Digital Benchmarks Report highlighting some of the key metrics realized across the accounts running campaigns through the platform.
Click volume was off roughly 7.5 percent from Q4 2016, while click-through rates increased from roughly 1.75 percent to more than 2.5 percent.
Source: Marin Software
Given the holiday season, it’s not surprising to see investment and activity in Shopping ads increase. Marin saw Google Shopping ad click share increase by 31 percent from Q3 to Q4 2017.
Looking more closely at CPCs by industry, education continues to stand out,

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Amazon vs. search: Why you shouldn’t put too many eggs in one shopping basket

No matter where they’re located or what market they serve, retailers around the globe have questions about how consumers use search and Amazon.
At Bing (my employer), we’ve found that retailers — regardless of size — ask us about the same three things:

Where do consumers look for products online?
How do users behave differently on search vs. Amazon?
Can my search and Amazon channels benefit each other?

The answers are likely to surprise you.
The consumer decision journey looks incredibly complicated to us marketers with its interweaving between research, comparison, intent and transaction, but it feels far less complicated from the consumer point of view.
As consumers, we follow certain behavior patterns almost subconsciously:

If we have questions around what it is we need, or want more information before we make a selection, then it’s natural to turn to search.
If we know what we’re looking to buy, often we have a predefined preference for which retailer website to begin looking for it.

For many customers,

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Report: Google earns 78% of $36.7B US search ad revenues, soon to be 80%

Google’s domination of the US search ad market isn’t letting up. Thanks to mobile in particular, Google will take 77.8 percent of US search ad revenues this year. By next year, for every dollar spent on search advertising in the US, an even eight dimes will go to Google. The remaining 20 cents will be split up among Microsoft, Yahoo, Yelp, Amazon, Ask and AOL, according to eMarketer’s latest report on the US digital ad market.
“Google’s dominance in search, especially mobile search, is largely coming from the growing tendency of consumers to turn to their smartphones to look up everything from the details of a product to directions,” said eMarketer forecasting analyst Monica Peart. “Google and mobile search as a whole will continue to benefit from this behavioral shift.”
Overall, search spending in the US is expected to increase 24 percent over the next three years, from $36.69 billion in 2017 to $45.63 billion in 2019.
Microsoft’s US search ad

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Merkle: Google Q4 search growth aided by changes other than ETAs

Paid search spend growth held steady in Q4 with 14 percent growth year over year, according to Merkle’s latest Digital Marketing Report. That’s up from 13 percent growth seen in Q3. Google’s many changes, including device separation, helped drive growth.
In Q4, CPCs were off just 0.5 percent, and click volume growth slowed to 15 percent year over year. Mobile phone clicks accounted for 47 percent of clicks, up from 33 percent the year before. Tablet share fell to 9 percent with the device bidding separation. Desktop spend rose after the device separation to 63 percent.

A number of changes kept Google growing
Google paid search spend grew 19 percent year over year in Q4, down slightly from 20 percent growth in Q3. Spending on non-brand, however, rose slightly to 21 percent in Q4.

The biggest Google growth drivers among Merkle’s client set in Q4 were:

Returning device bidding and separating tablet and desktop bids. Merkle says this change made the biggest difference.”As

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Coaxing smarter paid search bidding decisions out of sparse conversion data

Paid search is an industry that’s grounded in data and statistics, but one that requires practitioners who can exercise a healthy dose of common sense and intuition in building and managing their programs. Trouble can arise, though, when our intuition runs counter to the stats and we don’t have the systems or safeguards in place to prevent a statistically unwise decision.
Should you pause or bid down that keyword?
Consider a keyword that has received 100 clicks but hasn’t produced any orders. Should the paid search manager pause or delete this keyword for not converting? It may seem like that should be plenty of volume to produce a single conversion, but the answer obviously depends on how well we expect the keyword to convert in the first place, and also on how aggressive we want to be in giving our keywords a chance to succeed.
If we assume that each click on a paid search ad is independent from the

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Merkle: After big increases in mobile inventory last year, paid search growth slows a bit in Q3

Overall, spend growth on paid search dipped in Q3 to 14 percent year over year, down from 15 percent growth seen the previous quarter, according to Merkle’s Q3 Digital Marketing Report, issued this week.
Merkle says the slowdown was expected when comparing to the period last year, when Google significantly increased the number of ads displaying on mobile search results. Click volume growth slowed in Q3 to 20 percent year over year. Click growth has been trending down the past two quarters after dramatic increases seen in the last two quarters of 2015. Overall, CPCs were off five percent from last year.
Mobile spend across the search engines increased by 134 percent year over year. Meanwhile, search spend on desktop and tablet spend dipped four percent.

Google accounted for 86 percent of ad spend and 87 percent of click volume among Merkle clients represented in the report. That’s up from 81 percent and 82 percent a year ago, respectively.
On AdWords, spend and

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Report: US Google search spend was flat, but mobile spend jumped 55 percent in Q2

In Q2 2016, Google paid search spend in the US dipped slightly year over year among IgnitionOne customers. Slower spend growth was driven largely by a greater click share coming from mobile, where CPCs are lower. Smartphone ad spend grew 55 percent year over year; smartphone CPCs remained half of desktop.
The Q2 decline of one percent in spend was an improvement over the five-percent drop of Q1.
Across the advertiser set, impressions increased 13 percent with more mobile inventory available, and clicks rose 10 percent year over year. Smartphone impressions rose 46 percent, and clicks jumped 69 percent compared to the previous year. Click-through rates rose 16 percent on smartphones and fell 23 percent on tablets.
The spend drop last quarter was driven primarily by advertisers in the finance and travel sectors, with spend off seven percent and 12 percent respectively compared to the previous year. Education spend grew 42 percent, and it was also the only sector to see bumps in CPCs (up

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Can you manage your inventory with Google Shopping?

We are often asked by our clients if we can use Google Shopping or paid search to push particular products or product groups.
There are a number of reasons why they might want to do this. They might have high stock levels of a particular product; some ranges might be out of date, and they wish to sell off remaining stock; or perhaps a product is not selling as well as they had hoped, and they wish to boost the sales.
On the face of it, Google Shopping seems like a good platform for this task. Advertisers can pay more to increase the exposure of a particular product, rather than bid on keywords alone (as is the case with standard text ads). Hence, advertisers often believe Google Shopping is the ideal means to proactively manage inventory and stock levels.
However, behind this approach is the assumption that there is a direct relationship between what consumers search for and what they end up

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