Adobe finds search the biggest driver of ad spends

NEW DELHI: The spending on Facebook has grown by 93 per cent year-on-year and now represents three to five per cent of search spend, indicating that social continues to be a strong, emerging digital advertising channel.

According to the Adobe Digital Index providing insights for the first quarter of 2012 as well as an outlook for the remainder of the year, digital advertising continues its rapid growth across all channels.

According to the report, while Facebook is still an emerging digital advertising channel, search remains the biggest driver of ROI for marketers. Previous versions of this report were published by the former Efficient Frontier, acquired by Adobe in January 2012.

Spending on mobile platforms reached eight per cent of all search spend in the United States and 11 per cent in the United Kingdom. Tablets alone account for four per cent of total search spend in the US. Mobile devices and tablets are lower-cost channels and ultimately contributed to Google’s Cost Per Click (CPC) decline of five per cent year-on-year. In contrast, Bing/Yahoo’s CPC increased by 18 per cent year-on- year.

Traffic on mobile devices, specifically tablets, increased fourfold year-on-year, and advertisers were quick to respond, growing search investments in mobile and tablets by 250 per cent year-on- year.

Every month Adobe analyzes advertiser data from over $2 billion in annualised spend under management. Based on a client index from the past three quarters (beginning in Q2 2011), some key trends are emerging.

Search spend in the United States is expected to increase at a rate of 10 to 15 per cent for the rest of 2012 – consistent with macro trends.

Tablet and mobile spend will likely make up 15 to 20 per cent of all search spend by the end of 2012. Investments in tablet advertising will grow as tablet visitors are rapidly increasing. Conversion rates on mobile devices are comparable to desktop performance even though mobile CPCs are 30 per cent lower.

While Facebook ad CPCs have increased 40 percent quarter-on-quarter for the past three quarters, CPCs on Facebook ‘Sponsored Stories’ tend to be lower than Facebook ‘Marketplace Ads’, which may contribute to temporary decreases in CPCs.

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