After 2016’s downward trend in CPCs, 2017 kicked things off with record-setting increases in CPC rates. Despite an overall decline in demand, CPCs increased across all devices, reaching the highest levels recorded to date and overriding the traditional dip that we typically see after holiday.
The increase in mobile CPCs is as predicted. Mobile impressions, clicks, and click share are all up, and more competitive keyword bidding is one factor that helped drive costs. On the other hand, the increase in desktop CPCs was somewhat unexpected. Despite an overall decrease in search demand (and on desktop in particular), CPCs for desktop devices were up 26% year-over-year (YoY). While this increase can be partially attributed to the influence of behind-the-scenes adjustments to Google’s complex and ever-changing Quality Score and Ad Rank formulas, it’s also possible that advertisers’ willingness to pay more in order to reach hyper-specific audiences played a part.
In addition to fluctuations in CPC, other areas of special interest included voice search and Amazon’s entry and expansion into the Google Shopping space.
Representing 1,300 Google AdWords accounts and more than 176,000 active campaigns, this report provides an analysis and overview of the trends and corresponding opportunities relevant for brands that are taking a strategic, performance-focused approach to paid search marketing.
Some of the key insights and recommendations from the Q1 2017 report include:
CPCs reached highest levels recorded to date: Mobile CPCs rose 40% year over year (YoY) and – despite a decrease in demand – desktop CPCs were up 26% YoY.
Mobile growth is still strong: iProspect's Q1 (YoY) Google AdWords data showed mobile impressions and clicks were both up.
Mobile click share continued to grow: Mobile now represents 59% of all paid search traffic, a trend driven by advertisers that have taken heed of consumers’ device-specific search preferences and followed suit.
Google Shopping (PLA) investment continued to grow: Advertisers invested 44% more in Shopping YoY.
Amazon shakes things up in Google Shopping: Initial analysis of Amazon’s recent entry into the Google Shopping space showed that Amazon has a strong presence in most Google Shopping categories, but also identified some key ways that other brands can compete against the online retailer.
Voice search is becoming the search method of choice for consumers: 500 million people already use a digital assistant powered by search, and it’s expected that half of all search queries will be made via voice by 2020. We know how brands need to adapt their search strategy to take advantage of this fast-moving shift in consumer behavior.
Search platform updates expected to focus on mobile: Advertisers should adopt updates as they are released in order to remain competitive on the SERP.
Shopping ads CPC expected to increase: Advertisers should leverage Auction Insights reporting to monitor and identify shifts in competition and to define strategies for campaign optimization.
Local search will provide a critical advantage: Advertisers should consider how Google’s in-store visits tools can help them better gauge performance and identify new opportunities.
Personalization becomes even more important: Savvy advertisers should use RLSA, Customer Match, and Demographic targeting options to create better-targeted, more relevant interactions with consumers.
Voice search changes the landscape: Advertisers who want to compete effectively in this critical space need to be ready to handle longer, more conversational, question-based queries.
For all the findings and insights, download the full report here and get ready to take action.