Mobile Phones Trail Tablets, Computers in Holiday Paid Search Performance

December 7, 2012

While mobile devices were a big influence on e-commerce sales on Black Friday and Cyber Monday, mobile phones haven’t performed well in paid search. A new report [download page] from Kenshoo that looks at the holiday season through Cyber Monday (Nov. 1-26) finds that while mobile phones captured almost 12% of retail paid search advertising spend and 19% of clicks during that period, they accounted for less than 2% of sales revenue.

Low conversion rates and smaller average order values have been to blame. The average conversion rate for mobile search ads was just 0.28%, far behind the rates for tablets (2.15%) and computers (3.18%). Average order value for mobile phone ads stood at $106.88, also behind computers ($125.47) and tablets ($135.01).

All told, computers appear to have demonstrated the best return on search ad spend. Despite capturing slightly less than 80% of ad spend and about 72% of clicks, they accounted for 90% of sales revenue.

Google Product Listing Ads Outperform Text Ads

As Kenshoo found to be the case throughout Q3, Google Product Listing Ads (PLAs) continue to get better results than standard text ads triggered by keywords. Looking at the holiday season to-date, Kenshoo finds in its latest report that PLAs offered retail clients a $4.07 return on ad spend, compared to $2.99 for product-related keywords, a difference of 36%.

While PLAs drew a slightly smaller average order value than text ads ($107.53 vs. $111.26), they sported a slightly better conversion rate (1.55% vs. 1.52%), a far better click-through rate (2.58% vs. 1.27%), and a lower cost-per-click ($0.41 vs. $0.57).

Other Findings:

  • Overall, return on ad spend from paid search stands at $5.99 so far this holiday period, up 8% from the same period last year.
  • Return on ad spend was more than $10 on Thanksgiving, owing to low average cost-per-click and high average order values.
  • Conversion rates are up 10% over the same period last year, to 2.32%.

About the Data: The data analyzed by Kenshoo reflects a representative cross-section of Kenshoo clients (advertisers and agencies) managing paid search programs for the retail vertical in the United States with active campaigns tracking impressions, clicks, conversions and revenue over the 12+ month period from November 1, 2011 through November 26, 2012. The data set covers 10+ billion paid impressions and clicks on search engines like Google, Yahoo! and Bing that delivered more than $500 million dollars in online sales revenues during the 26-day November periods leading up to and through Cyber Monday in 2011 and 2012.

Product Listing Ads data is taken only from those retailers in the index who had active PLA campaigns and the comparison to standard search text ads is taken from this same subset of retailers as well. The product-related keyword campaign data is taken from keywords which relate to specific products (the same ones promoted via PLAs) and, thus, exclude the retailer brand and seasonal promotions.

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