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Paid Search Clicks Climb at the End of 2013, as Do CPCs

Decline in impressions a sign of increasing efficiency

Advertisers must be seeing a good return on investment from paid search advertising, because Q4 2013 ended up as the biggest quarter for paid search ever worldwide, according to a January 2014 study of ad spending conducted by digital marketing technology company Kenshoo.

The study found that in Q4 2013, clicks for paid search increased 12.3% year over year worldwide, although impressions had dropped by just over 10%. Cost per click (CPC), meanwhile, increased by almost 6%.

The Americas saw the greatest year-over-year gains in clicks, at about 16%. Asia-Pacific, meanwhile, had a 35.2% jump in CPC over the same time period but also saw ad impressions drop by almost 31%. But falling impression rates attended by an increase in clicks can be taken as a sign that paid search advertising is simply becoming more efficient.

Paid search advertising spending saw steady increases across all markets tracked by Kenshoo. The growth rate in Asia-Pacific hit 28.58% in Q4 2013, making it the leader among all regions. Paid search ad spending gains came in at 23.27% for EMEA, although year-over-year growth slowed dramatically between Q2 2013 and Q3 2013. Ad spending growth in the Americas in Q4 2013 shot up 17.88% year over year.

The majority of paid search dollars remain focused on computers. Kenshoo found that more than seven in 10 dollars spent on paid search advertising were dedicated to PCs, with phones maintaining an edge over tablets in the Americas, EMEA and Asia-Pacific. That finding is somewhat surprising given the ever-growing importance of mobile devices among internet users.

According to RKG’s “Digital Marketing Report Q4 2013” released in January 2014, spending on Google paid search increased 19% year over year in Q4 2013, driven by traffic growth, compared with a 43% rise in Bing ad spending, which includes Yahoo!. Clicks and CPC on Google were up 15% and 3%, respectively, with the latter likely affected by the change in the search engine’s Ad Rank in early Q4 2013. Bing/Yahoo! saw year-over-year gains of 37% in clicks and 5% in CPC.

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