The latest Adobe Digital Index report into online advertising for Q3 underscores the twin challenges facing Google’s ad business: mobile and social. While search advertising maintained steady growth in the U.S., U.K. and Germany, the report notes that a rise in traffic across mobile devices shifted search spending onto tablets and smartphones, thereby decreasing cost per click rates — especially for Google. Google CPCs decreased by 10 percent year over year, according to the report (mobile clicks command less expensive CPCs).
The report notes that conversion rates by mobile operating system are becoming increasingly important due to continued growth in mobile search traffic — and underlines another pain point for Google: Apple’s iOS offering nearly twice the monetisation advantage over Google’s Android OS. Across industries iOS conversion rates were nearly double Android’s, while across geographies iOS reached as much as 93 percent higher than Android, the report found.
Meanwhile, on the social side — a long standing Achilles’ Heel for Mountain View (albeit one it’s seeking to address) — social networking behemoth Facebook’s brand engagement grew rapidly, with the report recording an 896 percent rise in average brand post engagement year-over-year.
The report also found that mobile users now account for nearly one-quarter of all Facebook engagement (e.g., Likes, comments and shares) — underlining the corresponding rise in mobile social networking. Of course Facebook has its own challenge with monetizing mobile users vs. desktop users (back in July we reported that Facebook’s 10-Q SEC document revealed 102 million people accessed the site solely via mobile in June, a rise of almost a quarter on those accessing the site in March).
Based on its client index from the past three quarters, Adobe said it expects engagement on Facebook to surge in Q4 as brands continue to invest in social marketing and take advantage of the latest Facebook platform changes (such as Timeline) to target consumers.
It also expects search spending in the U.S. and Europe to continue rising, especially in the retail segment, with growth rates of 15 to 20 percent projected in both the U.S. and Europe, along with increased CPCs in Q4 due to “retail seasonality and Google Shopping having transitioned to a paid model”.
The report also projects mobile traffic will maintain steady growth in Q4 — with one in five paid search clicks originating from a tablet or a smartphone.
Google provides search and advertising services, which together aim to organize and monetize the world’s information. In addition to its dominant search engine, it offers a plethora of online tools and platforms including: Gmail, Maps, YouTube, and Google+, the company’s extension into the social space. Most of its Web-based products are free, funded by Google’s highly integrated online advertising platforms AdWords and AdSense. Google promotes the idea that advertising should be highly targeted and relevant to users thus providing...
Facebook is the world’s largest social network, with over 1 billion monthly active users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz, Chris Hughes, and Eduardo Saverin to help build Facebook, and within four months, Facebook added 30 more college networks. The original...