Merkle | RKG Releases Q4 Digital Marketing Report with Over 50 Analyses of Recent Trends

Merkle | RKG today released its Q4 Digital Marketing Report today, which covers trends in paid search, SEO, product ads, social media, display advertising, comparison shopping engines, holiday trends and more.

Overall, paid search spending was up 21% in Q4 of 2014, as click traffic increased by 14% and cost-per-click (CPC) rose by 6%. Google Product Listing Ads (PLAs) continue to show impressive growth and accounted for nearly 30% of retailer Google search ad clicks in Q4 2014. Advertisers also saw strong holiday growth overall, with retailer paid search revenues up 20% over last year.

Q4 Sees Slight Gains in Market Share for Bing and Yahoo; Potential for Larger Gains in 2015

In December, Yahoo became the default search option for Firefox in the US, supplanting Google after its ten-year run. Accounting for the percentage of search traffic coming through Firefox along with the switchback rates of users opting to go back to Google, Yahoo will end up gaining about 2% of U.S. paid search clicks. With rumours that the door is open for Yahoo or Bing to become the default search engine for Apple Safari in 2015 – which accounts for almost half of all paid search traffic – the result could be a shift of more than 10% of search market share away from Google.

Google’s Product Listing Ads (PLAs) also face competition from Amazon Products Ads and Bing Product Ads. Both Bing and Amazon’s product ads are growing at a faster rate than Google’s, with Amazon’s ads generating revenues for participating retailers that were 19% the volume of PLAs, up from just 8% a year earlier. Bing Product Ad share of total Bing traffic doubled from Q3 to Q4 and is now at 7% and contributing to strong overall Bing growth.

Despite these developments, Google remains the dominant search engine. Google’s search ads converted 43% better than Bing Ads, and had a 39% higher average click-through-rate. Google also leads in mobile search, with 40% of Google search ad clicks coming from phones and tablets, compared to 36% for Bing Ads.

Beginning and End of Holiday Season See Strong Growth for Retailers; Mobile Plays Larger Role in Holiday Traffic

For retailers running paid search campaigns, the 2014 holiday season started and ended on high notes with sales growth ultimately coming in at 20% year-over-year. After impressive Thanksgiving sales growth of 37% and Black Friday growth of 29%, things cooled off a bit, echoing recent holidays past.

By mid-December, cumulative sales growth had slipped to 16%, but advertisers saw very strong last-minute shopping numbers, particularly in the week before Christmas when many paid search programs achieved sales growth of over 40%.

As expected, mobile devices played a larger role in driving traffic this season as phones and tablets combined to generate 45% of paid search clicks on Thanksgiving and 51% of paid search clicks on Christmas. For the full fourth quarter, mobile devices drove 39% of paid search traffic.

Other notable Q4 highlights include:

Paid Search

  • Google paid search spending increased 19% Y/Y in Q4 2014, driven by a 12% increase in paid clicks and a 7% increase in average cost-per-click (CPC).
  • Bing Ads paid search spending rose 31% Y/Y. For the sixth consecutive quarter, CPC rose less than 5%, coming in 3% higher Y/Y. Ad clicks increased 27%, the highest rate in the last year.
  • Phones and tablets produced 39% of paid search clicks and 29% of ad spend in Q4. Phone click volume rose 48% Y/Y, compared to 28% for tablets and 3% for desktops.
  • Yahoo Gemini ramped up ad serving significantly in Q4 and accounted for 27% of all mobile Bing and Yahoo search ad clicks for advertisers opting into the program.

Organic Search & Social

  • Organic search produced 35% of site visits on average in Q4. Organic search visits were up 13% overall, while mobile organic search visits rose 54%.
  • Social media sites produced 2.4% of all site visits in Q4, up from 1.4% a year earlier. Facebook accounted for 62% of all social media-driven visits.
  • Mobile devices produced 52% of all social media visits in Q4 2014, up from 37% a year earlier.

Comparison Shopping Engines

  • Among advertisers participating in both Amazon Product Ads and Google PLAs, revenue produced by Amazon Product Ads rose to 19% of Google PLA levels, up from 8% a year earlier.
  • Comparison shopping engine (CSE) spend share for the eBay Commerce Network increased from 18% in Q4 2013 to 33% in Q4 2014. Nextag spend share fell from 8% to 2% over the same period.

Display Advertising

  • Facebook Exchange (FBX) ad spending increased 46% Y/Y in Q4, while average CPC increased 9%. Average FBX CPM has risen over the last few quarters, but Google Display Network (GDN) average CPM was still 55% higher in Q4.
  • GDN ad spending accounted for 9% of total Google ad investment in Q4, an increase from 8% in Q3.

For additional insights, you can download the full Merkle | RKG Digital Marketing Report. The full report provides detailed analyses, with over 50 charts illustrating trends in paid search, SEO, social media, product listing ads, comparison shopping engines, display advertising and more.

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