Google's Q3 earnings: how did mobile search perform?


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Google recently released its Q3 earnings, citing strength in overall results and calling particular attention to the mobile search business. How did search perform and what’s next for the channel?

Back in May, Google announced that mobile search had overtaken desktop search in 10 countries, and that momentum appears to be showing no signs of slowing given the latest third quarter findings.

In terms of key metrics, Google reported that paid clicks rose 23% year-over-year (YoY), while CPC dropped 11% YoY. These findings are aligned with what we saw across paid search. From where we sit, we also observed that paid search ad spend was driven solely by smartphone investments, with spend up 66% YoY.

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Other findings of note included click growth outpacing impression growth and leading to a boost in click-through rate across devices. It’s likely that smartphones are driving the increase in clicks, as consumers become more connected and active on these devices.

At the same time, marketers are becoming more nuanced in their mobile optimization by delivering a better and more relevant ad experience from click to conversion and accounting for mobile context and bid adjustments.

Furthermore, the addition of another ad slot on the Google mobile SERP, bumping the number up from 2 to 3, offers more opportunities for engagement.

As for CPCs dropping, there are several factors to consider here. First, costs are shown in contact currency and are adjusted for market fluctuations. Additionally, the growth of mobile search is likely contributing to this trend that has been happening over the past several quarters. If mobile clicks are making up a greater share of overall clicks and tend to come in at a lower cost than desktop, then this will bring down aggregate CPCs.

Finally, new entrants into the space are likely investing more heavily in mobile out of the gate, particularly given the explosion of apps and mobile-focused companies, whereas long-standing advertisers might be only just recently and gradually migrating ad dollars to focus on mobile.

Speaking of apps, Google’s earnings call also revealed that the search giant has indexed more than 100 billion app deep links, bringing more app content into the fold of search results for consumers. Apps has been a significant area of investment for Google this year with search ads for Google Play, conversion tracking with Android app installs, and the development of Universal App Campaigns.

These areas of investment set Google up to compete more directly with Facebook, which has posted strong gains and offerings on the mobile front. This is further punctuated by Google’s grab for audiences with the introduction of Customer Match, similar to Facebook’s Custom Audiences solution.

For marketers, a key takeaway here is that mobile must be a layer over your entire marketing strategy, and mobile search, while a strong and growing avenue, is only one component to that puzzle.

New mobile publishers (think Instagram and the like) are cropping up to offer ways to reach and engage audiences. Mobile search itself is evolving too ‒ smart marketers must begin considering the evolution of search that occurs outside of a search engine.

This means search within social channels, on wearables and via voice. What may have seemed like a distance consideration in 2015, may be closer than we think to changing the future of ‘search.’

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