Mobile Phones Driving Search Ad Growth
byJack Loechner , Staff Writer @mp_research, January 19, 2018
Mobile phones will drive most of the expansion in paid search ad spending, contributing an estimated 69% of the $19 billion in growth by 2022, according to Forrester research on search marketing trends by Robert Williams, first published on Mobile Marketer.
U.S. mobile search users are forecast to grow to $242.8 million in 2022 from $204.4 million last year, or about 3.5% a year, says the report.
Alphabet’s Google faces more competition amid the increase in mobile ad spending. The tech giant’s share of U.S. search ad revenue has fallen from 88% in 2011 to 78% in 2016 as competitors like iOS Spotlight and Amazon emerge. PC search ad spend fell an estimated 4% in 2017, following a 5% decline in 2016.
The share of U.S. online users who conduct a search at least weekly on a mobile phone has grown from 38% in 2013 to 57% last year, while those who search weekly on a PC has steadied at 80%, a sign of room for more mobile growth, says the report.
Search ads are a major part of the entire mobile marketing economy, including a growing role in helping to drive offline sales for retailers and service providers, says the report. Forrester estimates that mobile’s influence on offline retail sales is growing about 6.3% a year and will reach $1.4 trillion by 2021, or about 36% of total retail sales. This shows that mobile will continue to have a growing effect on retail sales in the U.S. in the years to come, according to the report.
Mobile paid search ecosystem is catching up to desktop in terms of pricing, says the report, where it has traditionally lagged. In Q3 2017, Google reported that average cost per click grew sequentially for the first time since Q1 2016, indicating that mobile ads are becoming a positive contributor to search spending. Google’s average cost per click had declined as its search ad mix shifted to more lower-priced mobile ads, Forrester points out. While PC and mobile ad prices had historically risen over time, PC’s increase wasn’t enough to outweigh the shift to mobile.
Google faces major competition from Amazon in the mobile market as smartphone users increasingly search for products directly on the Amazon app. A comScore survey found that 35% of users ages 18 to 34 said the Amazon app was an essential one that they could not go without, compared to only 11% who said the same for the Google search app. That points to the central role in search and advertising that Amazon has taken among the younger millennial and Gen Z generations, concludes the report.
As mobile’s role in search continues to grow, marketers must have a mobile-first SEO strategy in place that address the smaller screens on phones. In 2018, this is likely to become less of an option and more of a must-have now that Google has begun evaluating a handful of websites for mobile-first indexing. With a wider rollout of mobile-first indexing imminent, marketers who don’t optimize their sites for mobile could see their search rankings negatively impacted, warns the report.
MediaPost.com: Search Marketing Daily