One of the hottest topics in the paid search sector this year has been the impact of mobile. Overall, paid search remains the dominant category in digital advertising but for the first time, the cost-per-clicks (CPCs) in the tablet format are costing marketers more than those in the desktop computer format. Further, analysts believe paid search will increase between 18%-20% globally this year and that CPCs will continue to rise, especially as we enter the holiday season.

In the U.S., CPCs began rising in the 3rd quarter as consumers shopped for electronics and other back-to-school related supplies. During the course of this year, more of this searching has been done on tablets. These devices have moved from less than 30% to more than 50% of the mobile search spending. Because tablet use has reached critical mass, CPCs are now at 101% of traditional desktop computers. Meanwhile, the comparable figure for smartphones remains at 63%. Covario analysts attribute this to:

  • Higher user engagement
  • Content consumption
  • “Purchase affinity”

So far this year, paid search in the mobile space is up nearly 90% while the CPCs have risen over 80%.

In overall paid search, Google commands with 90% of the market and $1.41 for each CPC which is an 8% increase over last year. The closest competitor, Yahoo-Bing, is charging $1.08 for each CPC, a 10% drop.

As more search moves to mobile, it will be fascinating to see whether any new providers can dislodge Google’s dominance and just how expensive CPCs in the mobile space will become  for advertisers.

[Source: Funk, Alex. Paid Search Growth Marches On. Covario.com. 10 Oct. 2012. Web. 25 Oct. 2012]