UK search specialist Latitude Digital marketing has released an in-depth report on the Mobile PPC* market which shows some striking trends.

The report presents an interesting story – the overall growth of mobile search is strong, and the customers are clicking on the ads. However, the overall conversion rate is still relatively low as very few companies have taken the next step of making a website optimized for mobile.

(*Pay Per Click, e.g. paid mobile search)

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If you are interested in paid mobile search – for example buying Google Adwords – this is a report you really should read as it gives good insite into current market and trends.

Overall, the number of mobile visitors to sites continues to grow, and when combined with the new group of Tablet based visitors, it is becoming a substantial population.

In terms of PPC, mobile users represent a rapidly increasing share of clicks on paid searches. During Q2 2011, clicks on paid searches originating from a mobile device represented 8% of all clicks. This is up sharply from the 6.5% average of Q1.

And the trend is expected to continue. Alex Hoye CEO at Latitude Digital Marketing said “By the end of 2011 we expect to see over 10% of website traffic coming from mobile devices.”

The CTR (Click Thru Rate) is also quite good for mobile, with a Q2 figure of 4.8% compared with desktop ads which were at 3.1%. And the cost of mobile PPC is still below that of desktop, as shown in the chart below.

“Mobile is growing faster than spend, which means that the arbitrage between desktop cost-per-clicks and mobile cost-per-clicks remains” said Hoye, “While there’s less real-estate on mobile at the moment, I doubt this will be forever so companies should take advantage of the cheaper rates now to get a benefit in terms of their cost-per-click.”

However, there is one weakness in the mobile PPC scenario, the conversion rate on mobile is still significantly less – roughly half – compared with the rate for PPC advertising on desktop internet. Over the quarter, mobile conversion rates averaged 1.5% compared to 2.8%.

And naturally this conversion rate is not consistent across all handsets. For example, in one data set analyzed by Latitude, RIM had a conversion rate of only 0.03%, compared with 0.95% for Symbian OS devices. So clearly this targeting by type of handset could have a major impact on the overall success rate of a campaign.

In some respects, this number is not surprising considering recent market surveys which show that almost 80% of advertisers do not have mobile optimised sites linked to their ads. In other words, when a consumer clicks on an ad on their mobile device, they end up on a website which is intended for a desktop PC. We’ve all seen that desktop focused sites often give a very bad experience when viewed on a mobile, and so the low converstion rate is not surprising.

While this clearly is a problem at the moment and can have a big impact on a campaign’s ROI, it may in fact be a big opportunity for mobile. As more and more advertisers make the investment for a mobile-optimised site, the conversion rate is likely to go up, and then the strong CTR will make mobile PPC a very attractive alternative.

The study also found that the most active sector was the automobile one with 12% of all PPC clicks going to car dealerships and that 76% of these clicks originated from iPhones followed by Android (19%) devices.

The study also looks in detail at the performance of mobile PPC in several specific sectors. For example, two of the most active areas are the automotive sector and the gambling sector. Mobile represents 12% and 11.2% of all PPC clicks respectively in these markets, and is growing rapidly.

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31.07.2011    Tags: click-thru-rate, Mobile-Search