High investments in paid search build up clickthrough rates
According to PricewaterhouseCoopers (PwC), advertisers in Brazil will direct more than $1.17 billion dollars to paid search advertising in 2014. By PwC estimates, this will represent some 61% of the country’s total digital ad spending this year—the same share it has taken over the past three years—leaving the remaining 39% to classifieds, display, mobile and video.
Paid search ad spending in Brazil is increasing at a similar pace to total digital ad spending. Over the past three years, they accumulated 83.4% and 84.2% in growth, respectively. The trend is likely to continue through 2017; between 2014 and 2017, paid search is expected to rise nearly 57.3% while total digital ad spending grows by about 59.1%.
When compared internationally, these high investment levels for paid search in Brazil seem to be yielding returns. Kenshoo reported an average clickthrough rate (CTR) of 2.4% for paid search in the country in Q4 2013. Ranking No. 1, Brazil tied with China, where $5.2 billion in paid search investments in 2013—or 39.4% of total digital ad spending per PwC—also yielded an average CTR of 2.4%. Australia came in third, with a CTR of 2.1%.
In the US, where PwC estimated 45.5% of total digital ad spending in 2013 went to search, which includes contextual text links, paid inclusion, paid search and SEO, Kenshoo recorded an average CTR of 2.0% in Q4 2013.