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SOCIAL MEDIA MARKETING
Technology companies continue to ramp up spending on paid search campaigns, driven by such pressures as international expansion and greater investments in content marketing, mobile and video.
According to a report by search agency Covario Inc., “Global Paid Search Spend Analysis,” spending on pay-per-click (PPC) advertising by its enterprise technology, consumer electronics and retail clients rose 15% in the fourth quarter compared with the fourth quarter of 2011; for the year, the increase was 18% over 2011.
Paid search advertising on mobile devices, such as smartphones and tablets, continued to accelerate throughout the year, with mobile PPC spending up 30% in the fourth quarter year-over-year. Last year, 36% of mobile ad spending was for advertising on smartphones and 64% for advertising on tablets.
Covario said there is “higher purchase affinity” among users of tablets.
“We are seeing our tech customers really invest in the mobile experience,” said Mike Gullaksen, Covario senior VP-managing director. “They are building out mobile as a full experience versus just a simplified desktop experience.”
Keyword pricing leveled out quarter-over-quarter, with costs-per-click up 3% for the year. Covario said this was due to “an emerging mobile headwind” of lower-priced keywords for smartphones.
On a regional basis, Asia/Pacific experienced annual growth of 13%. In the first signs of a slowdown, however, search spending in the region saw a double-digit decline in the fourth quarter compared with the third quarter.
Despite the volatility, Alex Funk, the author of the quarterly report and Covario's director-performance media, said Asia/Pacific is a region where “major opportunities exist for paid search.”
Covario is recommending that advertisers budget for an increase of 18% to 20% in paid search spending in the Americas, with an emphasis on Latin America as the region's largest growth opportunity. In Asia/Pacific, Covario recommended advertisers plan for incremental PPC spending in the 30%-to-40% range.
Much of this growth is due to international expansion through paid search testing in emerging markets, as well as regional landing page creation and search optimization, Gullaksen said.
“Once a market is "vetted' for opportunity, then we are seeing full site-development investment and organic search investment,” he said. “Epicor Software, with its enterprise solutions, and Lenovo Group are good examples.”
The Americas, led by the U.S. and Canada, saw strong 21% year-over-year growth in paid search spending in the fourth quarter. Paid search in Europe remained a bit more subdued, with 10% fourth-quarter growth versus the same period last year.
Content marketing is a hot topic of discussion today, and it's having an impact on search.
“Tech companies are investing in creating content marketing, tracking it—determining who shares it and, of those who share, who are the influencers—and amplifying the content through leveraging influencers identified throughout the process,” Gullaksen said.
“Social media has become intertwined with search,” he said. “We know through content syndication and social sharing that we can drive social signals to help organic search, as well as influencer-personalized search results across the search result page.”
Globally among the major search engines Google continued to command more than 86% of paid search market share. Advertiser spending on Google search in fourth quarter was up 13% from a year ago.
The Yahoo-Bing Network, with almost an 8% share of the global search market, saw quarterly PPC spending up 23% year-over-year (although there was a 6% decrease compared with the third quarter).
Increases in search spending are also due to more sophisticated “touch-point analysis” and reporting, Gullaksen said.
“We are working with our tech clients on creating more cross-channel reporting to understand the impact the various channels have on success,” he said. “In one instance, we used a touch-point analysis to understand the impact different channels—display, direct marketing, paid search, etc.—have in producing the best traffic and conversion results.
“In the case of one of our technology clients, the process revealed that natural search was involved in almost 60% of channel paths as part of a user journey to a brand conversion,” he said.