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Q4 2013 by the Numbers: 5 Paid Search Stats You Need to Know

Skai™

January  16, 2014

Today, we released Q4 2013 paid search data from across the globe in the form of three infographics focusing on the Americas, EMEA (Europe, Middle East, Africa), and APJ (Asia-Pacific & Japan) regions. The world around us is always in flux and benchmarks such as the ones we release in the Skai Global Search Trend reports each quarter can help paid search marketers better understand the world around them.

The following five statistical insights from the Q4 global analyses are positive indicators of just how strong paid search has become and why it remains an integral part of the digital marketing playbook. Feel free to visit our site to view and download the three regional infographics with more geo-specific data.

Now, Q4 by the numbers…

29% vs. 22%

I’m constantly asked by analysts that follow the digital marketing industry the same question every quarter: When will paid search spending slow down?  The answer is simply that marketers follow performance. If an advertising channel is working, they’ll look to fund more until they reach a point of diminishing returns.

Q4 2013 clearly shows we haven’t hit that point yet in paid search.

Retailers generally spike up their paid search budgets in Q4 to take advantage of the high conversion activity during the peak shopping season. The quarter-over-quarter growth in Q4 2012 over Q3 2012 was a fairly robust 22%. However, the QoQ growth in Q4 2013 over Q3 2013 was 29%, which indicates that marketers have yet to hit their ceiling on how much they are willing to invest into this profitable channel.

72% / 17% / 11%

Consumer trends around mobile devices have been closely monitored by advertisers over the last few years as phones and tablets continue to grow in both usage and share of daily time spent with the web. As we reported in December, mobile represented almost half (44%) of all paid search clicks for retailers on key shopping days in 2013 — a major increase from 28% of clicks in 2012.

The numbers weren’t as dramatic across the entire Q4 and all advertisers in our Global Search Trends report.  In the Americas, computers (desktops, laptops, etc.) still captured the lion’s share of clicks at 72% of total paid search clicks with phones pulling in 17% and tablets accounting for 11% of total clicks during the quarter. The EMEA and APJ regions saw similar trends across devices in Q4 as well.

12% vs -10%

Global paid search spend was up 19% YoY in Q4 and the efficiency of that spend was clearly demonstrated by the fact that clicks grew by 12% YoY while impressions fell 10% YoY. Paid search marketers improved their click-through rates with better targeting, smarter optimization, and more compelling ad copy.

2% & 6%

Cost-per-click (CPC) grew just 2% QoQ from Q3 2013 to Q4 2013. The fact that CPC growth was relatively flat was a good sign that paid search marketers closely monitored their campaigns and bids during what is usually the most competitive, dynamic time of the year.

CPCs also only grew 6% YoY which was also a welcome sign that the effects of Google’s move to enhanced campaigns (arguably one of the biggest changes to paid search in a decade) didn’t drive click costs up very much. Before the July forced migration date, some industry pundits speculated that CPCs would rise drastically. Now, nearly six months later, it’s business as usual and Q4’s numbers show that marketers were able to effectively manage their costs in the long run.

1.9%

The global average click-thru rate (CTR) in Q4 2013 was 1.9%, up from 1.5% a year ago in Q4 2012. Although seemingly slight, that .4% percentage point differential is a 25% YoY increase which has many positive upsides.

Rising CTR is a sign of a healthy paid search economy and that trend has remained strong over the last 6 quarters. With higher click-through rates, marketers are able to capture more consumer traffic from the finite inventory that paid search provides. For example, for every 1,000,000 impressions, paid search campaigns with a 1.9% CTR can generate 19,000 clicks versus just 15,000 with a 1.5% CTR.  Search engines such as Google and Bing also offer incentives to advertisers based on their quality scores in which CTR is a major input.

Overall, it was a very solid quarter for Q4 and the biggest quarter on record for paid search marketing in terms of both spend and clicks.

To view the Skai Global Search Advertising Trends Infographics for Q4 2013, click here.

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