Last week, we released our quarterly State of Paid Search report for Q3 2014. After analyzing our data, we found that overall, clicks, spend, and CTR each experienced year-over-year (YoY) growth. Clicks increased 12.6% YoY, spend saw a 6.8% lift YoY, and CTR jumped 41.3% YoY. We saw an overall decline in impressions (20.3%) and CPCs (5.1%) YoY.
Increased advertiser focus on mobile devices drove much of the growth documented this quarter, for both tablets and smartphones. Spend on mobile devices continues to climb year over year, with overall mobile spend increasing 27% this quarter.
Overall impressions are on the decline due to a combination of causes. More people are searching on mobile, so spend has naturally followed towards this favored device. However, as increased spend pours into mobile channels, decreased ad real estate on mobile SERPs amplifies bidding competition. Brands must retool their bidding strategies and tailor ad copy specifically for the mobile experience if they want to boost overall impressions in this increasingly mobile-dominant paid search landscape. Knowledge graphs are taking up more room on desktops. We’ve also seen a higher percent of PLA impressions on mobile, which take up valuable screen space.
Secondly, brands are transitioning away from broad match and toward exact match strategies, due in large part to a YoY 24% CPC increase for broad match. Retooling strategies this way, brands accumulate fewer, more targeted impressions. This shift reinforces that brands should not base their whole strategy on impressions fluctuation, as impressions are not necessarily the most important metric.
Google Product Listing Ads (PLAs) impressions doubled YoY in the third quarter, with half of PLA click share coming from mobile devices. Constant connectivity, by which consumers can comparison shop online while in store, is making PLA investments on mobile devices more important than ever, especially as the holiday season rapidly approaches.
In the coming months, we expect to see more growth for mobile devices as their increasing prominence in the marketplace continues to reshape the foundations of consumer search behavior.
Check out our full State of Paid Search Report for Q3 of 2014 for more graphs and insights tracking the latest industry trends.