Although paid search continues to grow across industries on desktop, brands are under-utilizing mobile search and are missing out on an incredible opportunity to convert people, according to a study by Adobe.
The Adobe report found that smartphones are being used by people who are in the research phase of the purchase cycle and that mobile search could lead to conversion once the shopper is higher up in the funnel. Paid search on tablets is generating a higher conversion than it is on smartphones. This could mean that consumers are researching on smartphones and then turning to their tablets when actually making the purchase. Separating the tablet SEM strategy from the mobile SEM strategy become increasingly important, said Sid Shah, director of business analytics for Adobe’s digital marketing business.
Shah pointed out that as in the first quarter 2012, second quarter spend on tablet devices was particularly effective, generating higher conversion rates and ROI than spend on PCs and smartphones. For digital marketers and advertisers, these findings have major implications. Search, especially on mobile devices, should continue to be a major part of the marketing mix. However, marketers can drive higher returns by optimizing spend across devices.
What’s the opportunity with mobile and tablet search?
Much of the market has not caught on to this seemingly obvious trend. Every year since 2006 was the year of mobile. But mobile traffic took off with the launch of smartphones and people started searching and the explosion really happened only last year when tablets became mainstream. And yet, only 8 percent of all paid search traffic is on mobile/tablet, but we expect it to be at about 15-20 percent by year-end. People are searching for things on mobile and clicking on organic listings because advertisers are not paying for the clicks. I expect they will eventually and the paid traffic has already went up a bit. The conversion rates on tablets are much higher and the ROI is higher but the cost-per-click that advertisers are willing to pay is based on the marketplace and what advertisers think the click is worth. The CPCs have not equalized. Tablet CPC is not as high as desktop. Once they equalize then the ROI should equalize. There is an opportunity for brands to maximize ROI on the paid search side. If you look at the psychology of how this usually works, it’s the larger brands that lead the trend because they have a large advertising budget. They are the ones currently leading the trends in mobile search, but I expect the rest of the market will catch up soon.
Why do you think it is being underutilized?
If you want mobile traffic to convert, you have to have a mobile-optimized site. The sad truth is that that there’s a high number of those that do not and so they are not trying to drive consumers to their sites. Again, the large retailers have these sites because they are seeing traffic coming from mobile and from tablets and therefore they are using mobile paid search to drive traffic there. We are living in a multi device world. We have got smartphones, desktop and tablets. The attribution is becoming very important in this cross-platform ecosystem. If you look at peak usage on desktop, its around 5 p.m., smartphones is in the evening and tablet is at 10 p.m. I would hypothesize that people are using smartphones to research and tablets and desktop for the purchase phase. All have a role in the consumer purchase cycle.
Which brands do you see really embracing it?
The charge is being lead by the high-end retailers. It is not an option for them not to have mobile-specific campaigns. About 15-20 percent of their site traffic is coming from mobile and tablets [combined] at this point. Consumers are using multiple devices and retailers are still trying to figure out what result mobile SEM has on the actual purchase made from a desktop or tablet device at another stage of the purchase cycle.
How is the mobile SEM thought process different than regular desktop SEM?
Every advertiser’s goal is to reach right person, in the right place, at the right time, in right context. The context in which someone uses a smartphone is for research or to find something locally. They are looking at a certain product or service to get more information on. Creative should be targeted at those in the research phase and should focus less on conversion. Its more about branding in mobile SEM. The real estate is smaller too, so the creative should be succinct. Because tablet conversion is so much higher, tablet SEM should be approached differently than mobile SEM. Marketers need to manage campaigns across different devices separately.
How does social media affect mobile search?
We are seeing spikes in conversion because of social media. But this is still in beta stage. Advertisers are trying to figure out how to measure the effect of social media on mobile search to convert. Higher engagement rates on brand social media properties and higher conversion online and offline have been tied together by the larger brands but we still have a way to go, to go beyond anecdotal evidence.