Warc Blog

Search ads at mobile turning point

14 March 2014
NEW YORK: Search advertising in the US has reached a turning point as new figures show desktop expenditure shrinking at an accelerating rate while reports indicate Google stepping up its efforts to develop a cross-device ad targeting product.

Insights provider eMarketer said that desktop search ad spending had increased 5.1% in 2012 but had declined 0.8% in 2013 and would shrink even faster over the next few years, at -9.4% in 2014, -14.1% in 2016, -20.7% in 2017 and -33.1% in 2018.

In contrast, search advertising was growing rapidly, at 120.8% in 2013 and 82.3% in 2014. Double-digit growth was expected, albeit at slower rates, out to 2018, by when it would still be increasing at 22.2% a year.

In value terms, mobile search was predicted to be worth $9.02bn in 2014, compared to $13.57bn for desktop search.

This movement is reflected in the ad revenues of Google, the most prominent player in search. Just over three quarters of the company's search ad revenues came from desktop in 2013 but eMarketer estimated this would drop to two thirds in 2014.

But the predicted $770m decline in desktop search would be more than offset by a $1.76bn increase in mobile search revenues, helped by the firm's products such as Enhanced Campaigns and Product Listing Ads. Overall, mobile search was excepted to account for 26.7% of Google's total ad revenues in 2014.

Google is also reported to be pitching a new ad targeting product that will enable marketers to reach their customers across devices using their own customer data, so bridging the current gap between desktop and mobile.

According to Advertising Age, this works by advertisers dropping a "hashed tag" on a user's computer – an anonymised tracking identifier that ties to the cookies and device identifiers used by Google's ad-tech systems – which then allows them to show that person ads on any property within Google's network of third-party sites and mobile apps.

Google has also ended a separate trial which enabled advertisers to run banner ads on search results, saying it was not a benefit to users.


Data sourced from eMarketer, Advertising Age, Forbes; additional content by Warc staff

 
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