2017 was a transformational year in the paid search space. In addition to the many changes made to the overall search landscape, competition became more fierce as advertisers implemented new and more refined strategies in a bid to get ahead and stay ahead. At the same time, spend shifted toward mobile, and–in the retail vertical–shopping ads. The continuing evolution of search technology drove improvements in targeting and campaign efficiency, but these improvements came at an additional cost with cost per click (CPC) hitting an all-time high in the last quarter of the year–up 25% year over year (YoY).
These and other details are included in iProspect’s Quarterly Paid Search Trends Report for Q4 2017. Based on in-depth analysis of Q4 data from more than 2,500 Google AdWords and Bing Ads accounts, this report provides important insights into emerging paid search trends as well as opportunities that advertisers can explore in 2018.
Selected key insights include:
Costs are up, but so is efficiency. Despite higher CPC and spend, CTR on traditional paid search ads did improve YoY. The good news: changes drove better campaign efficiency, which in turn drove higher conversion.
Higher advertising expenses driven by external factors. Greater competition and adjustments to the algorithm that controls the paid search ad auction drove costs up, but Quality Score remained flat and average position worsened.
Quarter-over-quarter (QoQ) spend increased substantially. 2017 holiday drove a jump in QoQ spend that was a full 10 points higher than last year’s, likely due to retail brands capitalizing on holiday shopping and other advertisers seeking to make year-end changes in investment and revenue.
Google: CPC is up. CTR is down. Google CPC is up 25% YoY, hitting an all-time high; but skyrocketing impressions on Google Shopping Ads drive substantial drop in CTR (down 22% YoY).
Bing: CTR 57% higher than Google’s. While Bing continues to maintain better CTR than Google, they are also leading the race in high CPC with a 29% YoY increase.
Mobile clicks are down. For the first time since this report began measuring mobile performance, mobile clicks actually saw a slight YoY decline. This was driven in part by mobile adoption hitting a plateau, causing mobile query growth to slow.
Shopping investment and metrics up. Despite Shopping CPC decreases earlier in 2017, advertisers invested heavily in Q4 (up 53% YoY) and saw all-time highs for metrics across the board.
In addition to analyzing what happened at the end of 2017, the report also looks ahead with a summary of key trends to watch in the coming year. In addition to expecting continued CPC increases, advertisers should also keep an eye on additional advancements in automation through machine learning and audience targeting as well as well as new opportunities in structured data and mobile.
For all the findings and insights, download the full report to get the information you need to put your best foot forward in 2018.