Mobile search spending growing faster than you'd expect

New Telsyte research claims almost 30 per cent of total Australian paid search advertising is being served on smartphone and tablet devices

Mobile search advertising is experiencing faster growth in Australia than most people realise, and now represents almost 30 per cent of the total paid search links being served, a new report claims.

In a reflection of the strong focus marketers are putting on mobile marketing, new research from Telsyte predicted Australian mobile paid search spending will reach $430 million this year, or about a quarter of the estimated $1.74bn paid search market.

The report complements a new Asia-Pacific mobile marketing report compiled by the Mobile Marketing Association, which found 90 per cent of marketers expect their mobile marketing budgets to rise sharply in the next year, with app development and mobile display ads their preferred channels.

A recent Interactive Advertising Bureau (IAB) online advertising report also found mobile is outpacing other categories in terms of growth and increased 190 per cent year-on-year to 30 June. Tablet-based advertising was also found to be exceeding smartphone spending and represented 58 per cent of total spend.

During Q2, Telstra found nearly 30 per cent of paid search links were served onto mobile devices, and predicted this rising to 33.3 per cent by Q4. The analyst group also said the mobile paid search market is growing at a 17 per cent compound quarterly rate, with tablet expected to generate $240m, or 56 per cent, of the total market in 2013.

“Mobile device search advertising is growing faster than most observers realise,” Telsyte research director, Foad Fadaghi, said. “Notwithstanding the difficulties in measuring mobile search, many advertisers are serving their search ads on tablets and smartphones by default following changes to Google’s targeting options.”

Telsyte also forecast mobile will represent more than half of the Australian paid search market by 2017 and become the largest digital advertising product segment nationally by 2018.

Among the main usage scenarios for mobile paid search advertising in Australia are simple transactional offers, local search, in-store research and purchase, as an important path to purchase, and for products and services typically sold via telesales or call centres. The analyst group claims there are 14 million smartphone and 7 million tablet users in Australia.

Telsyte also claimed the ROI from mobile search advertising has not yet reached the level of desktop search overall, although some categories such as local, have shown a higher ROI.

“The ROI for mobile search needs to be expanded beyond just measuring online sales but other metrics, such as offline sales and other factors that are important in the path to purchase,” the report stated.

“Mobile search marketers need to accept that conversion metrics are different on smartphones and tablets. While tablet metrics are closer to desktop search, there are still differences particularly around user engagement.”

Telsyte’s findings included comparing numbers against public reports available from companies managing search spend globally along with Google Australia.

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