2. 04 PAID SEARCH
03 Executive Summary
14 ORGANIC SEARCH & SOCIAL
19 COMPARISON SHOPPING ENGINES
22 DISPLAY ADVERTISING
25 MULTI-CHANNEL
27 ABOUT RKG & METHODOLOGY
TaBLE OF CONTENTS
3. 3
Paid Search
• Google paid search spending grew 17% Y/Y in Q1, a small deceleration from 19% growth in Q4. Paid
clicks were up 10%, while CPCs increased 6%.
• Paid search spending on Bing Ads, which includes Bing and Yahoo, also grew 17% Y/Y. Paid clicks rose
16%, while CPCs were just 1% higher.
• Among retailers, Product Listing Ads (PLAs) generated 29% of total Google paid search clicks in the
quarter and nearly half of non-brand Google paid search clicks. ROI for PLAs was 14% better than that for
comparable text ads.
• Bing Product Ads showed improvement in Q1 and contributed 12% of participating advertisers’ non-
brand revenue from Bing Ads.
• Mobile generated 36% of paid search clicks, with that figure split fairly evenly between smartphones and
tablets. Smartphones accounted for just 7% of spend though, compared to 20% for tablets.
• According to Google’s conversion tracking data and estimates, cross-device conversions amount to 20%
of conversions that Google attributes to smartphones for RKG clients, but just 7% of conversions across
all device types.
Organic Search & Social
• Organic search produced 30% of site visits in Q1 2014, down from 33% a year earlier. Google drove 82%
of total U.S. organic search visits and 87% of mobile search visits.
• Mobile generated 31% of organic search visits in Q1. The iPad and iPhone each drove more organic
search volume than all Android devices combined.
• Not Provided query share has remained stable since October of 2013 and now stands at an average of
85% of Google search visits.
• Facebook generated 54% of social media referrals in Q1. Pinterest has shown rapid growth, but with a
wide range of influence from site to site. For the top quartile, Pinterest generated 47% of social referrals,
but for the bottom quartile that figure was just 3%.
• Mobile devices accounted for 37% of social media referrals in Q1, up from 22% a year earlier.
Comparison Shopping ENGINES
• Among advertisers running both Amazon Product Ads and Google PLAs, RKG found Product Ads CPCs
running 31% higher, due largely to Amazon maintaining its rate card from Q4 to Q1. Consequently,
Product Ads volume suffered in comparison.
• Nextag’s share of CSE spending declined to 2% in Q1 this year, from 13% a year earlier. Engines with more
flexible bidding systems like PriceGrabber and the eBay Commerce Network saw gains.
DISPLAY ADVERTISING
• While revenue per click is nearly identical between Facebook Exchange (FBX) ads and other display ads,
CPC remains 33% lower on Facebook, resulting in superior ROI.
• For advertisers actively advertising on the Google Display Network (GDN) and running AdWords paid
search ads, GDN accounted for 6% of total Google spending.
MULTI-CHANNEL
• Last touch attribution models show affiliates accounting for more than 15% of revenue in Q1, up from
11% a year earlier. Email continues to show year-over-year declines in last touch revenue share, likely the
result of mobile email checking and the relegation of marketing emails to a promotion tab in Gmail’s tab
system.
EXECUTIVE SUMMARY
4. PAID SEARCH
Since our last report, two of the biggest stories in
paid search that have piqued marketers’ interest
have done so more for their symbolism than any
substantive impacts they will have in the near
term. In February, Yahoo announced its Gemini
program, which is now migrating mobile search
ad traffic away from the Bing Ads platform. In
the first quarter we found mobile Bing Ads traffic
made up a little over 4% of U.S. advertisers’ paid
search clicks. With that traffic split between Yahoo
and Bing, only about 4% of search clicks will be
affected by this change and a smaller percentage
of search ad revenues.
In early April, Google confirmed that it will no
longer be passing raw user search queries to
advertisers via the referring URL, effectively
bringing Not Provided to paid search. While this
change will hinder some query-based keyword
and negative research, it will not impact keyword
reporting or bidding. While Not Provided dealt a
heavy blow to organic search analytics, for paid
search it will be only a relative nuisance.
Over the following pages we’ll highlight some of
the more meaningful issues affecting paid search
trends including the continuing growth of product
ads and mobile, as well as Google’s Enhanced
Campaigns model and advertisers’ response to it.
5. PAID SEARCH 5
Total Paid Search Spending Rises 17% in Q1
Paid search spending growth got off
to a fairly sluggish start in Q1, but
closed strongly with ad spend up
17% Y/Y for the full quarter on 11%
higher clicks and 6% higher cost per
click (CPC). This intra-quarter trending
points to some residual impacts of an
aggressive Q4 holiday push among
retailers.
Overall U.S. Paid Search Trends
ClicksAd Spend CPC
+6%
Relative to Q1 2013
+11%
+17%
+75%
+50%
+25%
2013-Q1
-25%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1BASELINE
Google Paid Search Spending Growth
Decelerates Slightly
As the dominant player in the U.S.
search market, Google’s growth
trends mirror the overall figures above
with spending up 17% Y/Y, clicks up
10% and CPCs up 6%. In Q4 2013,
RKG found Google spending growth
at 19% Y/Y, so this marked a slight
deceleration. From Q4 to Q1 we saw
spending decline 27%, which is typical
of the seasonality we see among our
retail-leaning client sample.
Google Overall U.S. Paid Search Trends
Relative to Q1 2013
ClicksAd Spend CPC
+6%
+10%
+17%
+75%
+50%
+25%
2013-Q1
-25%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1BASELINE
Bing Ads Growth Returns to Industry Average
After Huge 2013 Gains
Throughout 2013, RKG found Bing
Ads spending growth reaching two
to three times that of Google levels.
Now that we are running up against
those strong comps, we see Bing Ads
growth falling back in line with the
industry overall with spending up 17%
Y/Y on 16% higher click volume and
1% higher CPCs.
Bing Ads Overall U.S. Paid Search Trends
Relative to Q1 2013
+75%
+50%
+25%
2013-Q1
-25%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
ClicksAd Spend CPC
+1%
+16%
+17%
BASELINE
6. PAID SEARCH 6
Google Non-Brand Spending Growth Outpaces
Overall Levels
For more competitive, non-brand
traffic, including Product Listing Ads
(PLAs), Google spending growth was
18% Y/Y in Q1, with clicks up 8% and
CPCs up 10%. Lower spending growth
on brand traffic depressed overall
growth, as brand CPCs fell 9%, likely
tied to Ad Rank changes last October.
Google Non-Brand U.S. Paid Search Trends
Relative to Q1 2013
+75%
+50%
+25%
2013-Q1
-25%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
ClicksAd Spend CPC
+8%
+10%
+18%
BASELINE
Bing Ads Non-Brand Spending Growth at 22%
Similar to results on Google, spending
growth on Bing Ads was stronger for
non-brand traffic, where click volume
increased 14% Y/Y, CPCs increased 7%
and ad spend increased 22%. While
CPCs for Bing Ads brand traffic have
fallen sharply in the past year, including
a 14% Y/Y decline in Q1, Bing Ads’
brand CPCs remain well above those
for Google.
Bing Non-Brand U.S. Paid Search Trends
Relative to Q1 2013
+75%
+50%
+25%
2013-Q1
-25%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
ClicksAd Spend CPC
+7%
+14%
+22%
BASELINE
Product Ads Driving Bulk of Paid Search
Growth
Image-based product ads, including
Google’s Product Listing Ads (PLAs)
format and Bing’s Product Ads are
driving the bulk of overall paid search
growth across the RKG client sample
with ad spend up 69% Y/Y and clicks up
51%. By comparison, text ad spending
growth was just 6% with clicks up 4%.
Overall U.S. Paid Search Growth by Format
Q1 2014
75%
50%
25%
0%
Text Ads
PLAs/Product Ads
Ad Spend Clicks CPC
7. PAID SEARCH 7
PLAs Generate 29% of Google Paid Search
Clicks for Retailers
Among retailers using the format,
PLAs took share from Google text ads
at a faster rate in Q1 2014. Overall,
PLAs generated 29% of Google paid
search clicks for retailers, and half of all
non-brand clicks. Google gave PLAs
greater prominence in the quarter by
showing them above the main search
results, instead of on the right rail,
more frequently.
PLA Share of Google Paid Search Clicks
Aggregate Results - U.S. Retail
+29%
+50%
60%
40%
30%
20%
0%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q12012-Q2 2013-Q3
50%
10%
Non-Brand
Overall
PLA ROI Still 14% Better than Comparable
Non-Brand Text Ads
Suggesting there may still be room
for PLA CPCs to increase, ROI for
the format was 14% higher than that
for non-brand text ads in Q1. Click-
through rates for PLAs were more
than double those for non-brand text
ads, while conversion rates were 50%
higher for the median retail client we
analyzed.
PLA CPCs Edge Down Compared to Text Ads
in Q1, But Trending Higher Over Long-Term
Again compared to non-brand text ads
among retail sites, PLA CPCs were 8%
higher than those for the traditional
text format. That was down from a 13%
advantage in Q4 2013, but PLA CPCs
have exhibited a strong upward trend
over the last two years as advertisers
exploit the ROI advantage of PLAs.
Google PLA CPC vs Non-Brand Text Ads
Median Site Results - U.S. Retail+25%
Non-Brand
Text Ads
-25%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q12012-Q2 2012-Q3
+8%
BASELINE
PLA Performance vs Text Ads
Median Site Results - U.S. Retail+150%
+50%
Text Ads
-100%
+100%
-50%
PLAs vs Non-Brand Text AdsPLAs vs Overall Text Ads
CPC CTR ROI Conv. Rate AOV
BASELINE
64%
8% 24%
134%
-56%
14%
50%
-16% -17%
-11%
8. PAID SEARCH 8
PLAs Nearly 60% of Google Paid Search Clicks
for Consumer Electronics Retailers
We continue to see a wide range in
PLAs’shareofnon-brandtrafficacross
retail sub-industries, but the format is
a significant contributor even at the
lower end of the spectrum. A typical
Apparel retailer generated 32% of
their competitive Google traffic from
PLAs, while the median Consumer
Electronics retailer generated 58%.
PLA Share of Non-Brand Google Paid Search Clicks
Median Site Results - U.S. Retail Q1 2014
Flowers
& Gifts
Cars &
Auto
Health &
Beauty
Apparel Sporting
Goods
Books Home &
Garden
Consumer
Electronics
40%
0%
60%
20%
Bing Product Ads Make Strides in Q1,
Contribute 12% of Non-Brand Revenue
Just out of beta testing at the
end of the quarter, Bing Product
Ads accounted for 12% of non-
brand Bing Ads revenue among
participants in the program. That
is a significant improvement over
the previous quarter when Product
Ads contributed 8% of non-brand
revenue at a lower ROI.
Bing Ads — Product Ads Share of Non-Brand
Median Site Results - U.S. Retail
2013-Q4 2014-Q1
10%
0%
15%
5%
Ad Spend Ad Clicks Revenue
Bing Product Ads Revenue Per Click Up
Sharply Compared to Text Ads
While Product Ads’ share of Bing Ads
clicks only improved slightly from Q4
to Q1, a much improved revenue per
click (RPC) drove the strong revenue
gains seen above. In Q4 2013, the
nascent format delivered an RPC
that was 22% lower than non-brand
text ad levels. In Q1, Bing Ads RPC
rose to surpass non-brand text ads in
value by 79%.
Bing Ads — Product Ads vs Non-Brand Text Ads
Median Site Results - U.S. Retail Q1 2014
CPC RPC CTR
+50%
+100%
-50%
Text Ads
BASELINE
Non-Brand -3%
79%
-2%
9. PAID SEARCH 9
Google Share of U.S. Paid Search Market
Edging Back Up
While Bing Ads made strides in taking
paid search spend and click share from
Google in late 2012 and early 2013, we
have seen a bit of a reversal in recent
quarters. Among our Q1 client sample,
Google’s share of U.S. paid search ad
spend was 83%, up a tenth of a point
from Q4, while Google’s share of paid
search clicks was 82% in Q1, up eight
tenths of a point.
Google Share of U.S. Paid Search
84%
83%
82%
86%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
83%
85%
82%
Ad Spend Clicks
81%
Google Generating 33% Higher Revenue Per
Click for Advertisers than Bing Ads
Looking at non-brand ads, including
PLAs and Product Ads, Google
generated a 33% higher revenue per
click than Bing Ads for the median
advertiser in Q1. Advertiser ROI on
Google was 12% higher, thanks in
large part to PLAs and the relative
immaturity of that auction.
Non-Brand: Google Metrics vs Bing Ads
Median Site Results - Q1 2014
+10%
+40%
+20%
-10%
+30%
Bing Ads Closer to Parity with Google on
Brand Ads, Except for CPCs
We see more similarity between Bing
Ads and Google when looking at
conversion metrics for brand traffic.
However, brand CPCs on Google
still run nearly 40% lower, leading to
a much higher ROI and suggesting
that advertisers receive a greater
algorithmic ranking advantage for
their brand terms on Google.
Brand: Google Metrics vs Bing Ads
Median Site Results - Q1 2014
50%
100%
-50%
Non-Brand
BASELINE
Bing Ads
RPC CPC ROI AOV CR
12%
35%
22%
33%
Non-Brand
BASELINE
Bing Ads
9%
-39%
90%
2% 11%
RPC CPC ROI AOV CR
2%
10. PAID SEARCH 10
0%
Smartphones and Tablets Each Generate 18%
of Paid Search Clicks
With a share of 18% each, smartphones
and tablets combined to generate 36%
of paid search clicks in Q1, up from
32% in Q4 2013. Smartphones have
gained more share over the past year
than tablets, 6% vs 5%, despite many
RKG programs reducing smartphone
bids to improve ROI over that time
frame.
Mobile Share of Paid Search Clicks
20%
10%
40%
30%
Tablet Smartphone
18%
18%
With Lower CPCs, Smartphones Account for
Just 7% of Paid Search Ad Spend
Between smartphones and tablets,
27% of paid search ad spend was
mobile in Q1, but smartphones only
accounted for 7% of spend despite
their 18% share of clicks. This is a
reflection of ROI-focused advertisers
accounting for the disparity in
conversion performance across device
classes.
Mobile Share of Paid Search Ad Spend
Tablet Smartphone
20%
7%
20%
10%
30%
0%
38% of Google Paid Search Clicks are Mobile,
25% for Bing Ads
Google continues to hold a relative
advantage in monetizing its mobile
traffic with 38% of its paid clicks
coming from smartphones and tablets
in Q1, compared to 25% for Bing Ads.
Google gained ground in this area
from quarter to quarter with its mobile
share up 4% versus 1% for Bing Ads.
Mobile Click Share by Engine
20%
10%
40%
30%
0%
Google Bing Ads
Combined Smartphone Tablet
11. PAID SEARCH 11
Google Smartphone CPCs Slip to 35% of
Desktop Levels
As noted earlier in this report, RKG
advertisers have moved to improve
smartphone ROI by reducing
their CPCs for smartphone clicks.
Smartphone CPCs have fallen from
nearly 60% of desktop levels in Q1
of 2013 to 35% this past quarter. The
recent results are a better reflection of
the value being driven by smartphone
traffic.
Google Mobile CPC vs Desktop120%
60%
40%
20%
80%
100%
0%
98%
35%
Desktop
Tablet
Smartphone
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
Smartphone Revenue Per Click Trending Higher
Post-Enhanced Campaigns
For smartphone CPCs to ever catch or
surpass desktop levels, advertisers will
need to see the value of smartphone
clicks improve. At least in terms
of direct response revenues, we
are seeing progress in this area as
smartphone revenue per click has risen
from23%ofdesktoplevelsinQ12013to
34% in Q1 2014. Enhanced Campaigns
and RKG’s bidding platform have
helped advertisers better capture top-
performing mobile traffic.
Revenue Per Click vs Desktop120%
60%
40%
20%
80%
100%
0%
84%
34%
Desktop
2013-Q42013-Q1 2013-Q2 2013-Q3 2014-Q1
Tablet
Smartphone
Desktop Clicks Down 3% Y/Y, Smartphone
Clicks Up 64%
Despite RKG advertisers reducing
smartphone CPCs 21% year-over-
year to bring ROI more in line with
desktops, smartphone click growth
was 64% in Q1, surpassing tablets,
which saw a 10% increase in CPC. At
the same time, desktop click volume
was down 3% Y/Y, although spend
rose 9% due to higher CPCs. Google’s
Year-Over-Year Growth by Device Class
Smartphone
Desktop
Tablet
80%
20%
0%
-20%
40%
60%
Ad Spend Clicks CPC
Enhanced Campaigns model has helped drive smartphone volume growth by making it easier to scale mobile
keyword coverage and bidding segmentation.
9%
-3%
29%
72%
64%
56%
13%
-21%
10%
12. PAID SEARCH 12
iPad Share of Tablet Traffic Slips to 80%,
Windows Devices in Distant Second Place
Though still far and away the largest
traffic driver among tablets, the iPad
saw its share of tablet traffic slip post-
holiday from 84% to 80%. Touch-
compatible Windows computers,
including the Surface, have quickly
taken the number two spot with over
5% of traffic in Q1. The Kindle Fire and
Galaxy Tab lines each generated 4%
of tablet clicks, while Nexus tablets
accounted for 1.2% of tablet clicks.
2014-Q1
2013-Q4
2013-Q2
2013-Q1
2012-Q4
2013-Q3
Other Tablets
75%
50%
25%
0%
100%
iPad Other
Tablets
4%
3%
2%
0%
5%
1%
Windows
Tablet
Other
Android
Kindle Galaxy
Tablet
Nexus
Tablet
6%
Google Estimates Suggest Cross-Device
Accounts for 20% of Smartphone Conversions
According to Google’s conversion
tracking data and estimates,
smartphones accounted for an
average of just 10% of single device
conversions in Q1, but initiated a
third of all cross-device conversions.
Cross-device conversions amount to
20% of conversions Google attributes
to smartphones, but just 7% of
conversions across all device types.
Windows Tablets Remain Best Performing
Looking at revenue per click across
devices, we found that Windows
tablets were the best performing for
advertisers in Q1, generating a 13%
higher revenue per click than desktop.
A year earlier though, Windows tablets
produced a 42% higher RPC than
desktops, suggesting that there was a
strong early adopter effect that is now
wearing off.
Revenue Per Click by Device vs Desktop
Q1 2014
100%
80%
60%
20%
0%
40%
120%
Desktop
Windows
Tablet
Desktop
iPad
Other
Tablets
OtherAndroid
Tablets
Nexus
Tablet
iPhone
KindleFire
Android
Phone
Other
Devices
Windows
Phone
Other
Phones
Devices, But
Gap Narrows
% of Est. Cross-Device
Conversions
% of Est. Single-Device
Conversions
Cross-Device % of
Est. Total Conversions
Desktop
Single-Device
Cross-Device
Tablet
Single-Device
Cross-Device
Smartphone
Single-Device
Cross-Device
72%
17%
10%
53%
14%
33%
6%
20%
Tablet
Conversions
5% Desktop
Conversions
Smartphone
Conversions
13. PAID SEARCH 13
Not Provided Quickly Jumps to 45% of
AdWords Search Clicks
On April 9th, Google announced that
it would soon no longer pass raw user
search queries to AdWords advertisers
via referrer, effectively bringing Not
Provided to paid search. While a small
percentage of ad clicks did not pass
queries prior to this change for other
reasons, Not Provided immediately
reached 37% of Google paid clicks on
the day of the announcement. Over
the next several days, Not Provided
share has been steady at about 45%.
Not Provided Share of Google AdWords
Paid Search Traffic
Clicks from Safari Users Twice as Valuable as an
Average Click
As Google’s Enhanced Campaigns
model is making it easier for advertisers
to incorporate user context like
geography and device into bidding
segmentation, the searcher’s browser
remains a strong predictor of traffic
quality that does not have its own
bid modifier. In Q1, a Safari 7 user
generated an average revenue per
click that was more than twice as high
as the overall average. Conversely,
Internet Explorer 8 users had a 24%
lower than average RPC.
Revenue Per Click by Desktop Browser
vs Overall Average
Explorer10
Explorer9
Explorer8
Chrome31
Chrome32
Chrome33
Firefox25
Firefox26
Firefox27
Safari5
Safari6
Safari7
+125%
+100%
+50%
-25%
+25%
+75%
Average
BASELINE
Overall -24%
16%
23%
11%
31% 29%
16%
44%
99%
119%
-9% 2%
50%
40%
20%
10%
30%
0%
4/1/2014
4/13/2014
4/2/2014
4/3/2014
4/4/2014
4/5/2014
4/6/2014
4/7/2014
4/8/2014
4/9/2014
4/10/2014
4/11/2014
4/12/2014
45%
14. ORGANIC SEARCH & SOCIAL
Measuring organic search trends has been like
a game of Whac-A-Mole over the last couple of
years. As one issue impairing site owners’ ability
to assess their data gets resolved, another one
will spring up. In Q1 2014, Yahoo.com began
defaulting to secure search, which resulted in
nearly half of Yahoo search visits being recorded
as direct site visits from early January through
early February.
Similar to an issue with Google searches on
devices using iOS 6, Yahoo initially did not pass
any referrer information for its secure searches,
making it impossible for analytics to determine
the source of the traffic. When Yahoo began to
pass referrers in early February, some analytics
packages,includingGoogleAnalytics,categorized
the visits as referrals rather than organic search, an
issue that persists as of this writing.
While the iOS issue reduced the perceived share
of organic search visits as a percentage of all site
traffic by nearly 4% at its peak last year, Yahoo’s
secure search move affected about 1% of site visits
on average. Though a small percentage, ‘hidden’
Yahoo searches may be the difference between
total organic search visits being seen as growing
or declining year-over-year for many sites.
15. ORGANIC SEARCH & SOCIAL 15
Organic Search Visit Share Stable at 30%,
Despite Yahoo Secure Search Issue
Including RKG estimates for organic
search visits hidden by iOS 6 last year,
we find that organic search visit share
has been fairly stable from Q3 2013
to Q1 2014 at between 30-31%. Over
a longer window though, organic
search visit share has slipped slightly
from 33% in the first quarter of 2013.
The period over January and February
when Yahoo secure search did not pass
referrers depresses the Q1 numbers
slightly.
Organic Search
Share of All U.S. Site Visits
35%
30%
25%
0%
40%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
Organic Recorded Organic Actual
30%
Hidden Yahoo Searches Skew Search Share Trends
RKG finds that Google’s share of
organic search visits edged up one
percentage point from Q4 to Q1,
while Yahoo’s share fell by the same
amount. These figures do not attempt
to account for the Yahoo searches
hidden by secure search over the early
part of the quarter. Doing so would
produce results showing little change
from quarter to quarter.
U.S. Organic Search Visit Share by Engine
75%
50%
25%
0%
100%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
Google Yahoo OtherBing
Yahoo Secure Search Move Impacted 1% of All
Site Visits
The point at which Yahoo.com began
defaulting to secure search is quite
obvious when we look at a weekly
trend of the share of traffic attributed
to Yahoo organic search. Over the first
two weeks in January, Yahoo organic’s
measurable share of all site visits
dropped from 2.5% to 1.5%. During
the first week of February, Yahoo
traffic appears to rebound as a result
of referrers, now stripped of search
queries, being passed again.
Yahoo Organic Search
Share of All U.S. Site Visits
2%
1%
0%
3%
2013
Dec 1
Dec 15
2014
Jan
1
Jan
15
Feb
1
Feb
15
M
ar 1
M
ar 15
M
ar 30
Yahoo Secure
Search Begins
16. ORGANIC SEARCH & SOCIAL 16
Google Continues to Hold Relative Advantage
in Mobile Search Share
While Google generates roughly
81% of organic search visits overall, it
continues to generate a higher portion
of mobile search visits. In Q1 2014
Google accounted for 87% of mobile
organic search visits, compared to 8%
for Yahoo and 5% for Bing.
Share of U.S Mobile Organic Search by Engine
Q1 2014
Google
Yahoo
Bing
87%
8%
5%
iPad and iPhone Each Drive More Organic
Search Visits than all Android Devices
Combined
Mobile devices accounted for 31% of
organic search visits in Q1, up from
24% a year earlier. iPad users drove
12% of all search visits, compared to
11% for iPhone users and 8% for users
of all Android devices combined.
Mobile Share of U.S. Organic Search Visits35%
20%
10%
0%
30%
25%
15%
5%
Android iPhoneiPad Other
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
Mobile’s Share of Bing Traffic Doubles Year-
Over-Year, Still Half That of Google, Yahoo
In Q1 2014, 16% of Bing organic
search visits occurred on mobile
devices, double the same metric from
a year earlier. By comparison, mobile
was a much larger portion of traffic for
Google and Yahoo, which saw mobile
account for 33% and 36% of visits in
Q1, respectively.
Share of Each Engine’s Traffic from Mobile
30%
20%
10%
0%
40%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
Google YahooBing
17. ORGANIC SEARCH & SOCIAL 17
Mobile Search Growth Offsetting Desktop
Declines
A 29% year-over-year increase in
mobile organic search visits pushed
overall organic search growth into
positive territory in Q1. Organic visits
hidden by Yahoo’s move to secure
search depress these numbers slightly.
Y/Y Growth in Organic Search Visits
Q1 2014
30%
20%
10%
0%
Mobile All
Not Provided Visit Share Steady at 85%
The share of Google organic searches
that did not pass site owners the user’s
raw search query has been fairly steady
since October of 2013 and stands at
85%. This Not Provided percentage
accelerated in Q3 of last year as
Google pushed more users and web
browsers to secure search. Queries
still being passed have been biased
towards certain web browsers and
devices, such as Safari and Android.
Not Provided Share of
Google Organic Search Traffic
75%
50%
25%
0%
100%
Feb
M
ar
Jan
Apr
M
ay
Jun
2013
Jul
Aug
Sep
O
ct
D
ec
N
ov
Feb
M
ar
Jan
Apr
M
ay
Jun
2012
Jul
Aug
Sep
O
ct
D
ec
N
ov
Feb
M
ar
Jan
2014
Bounce Rates for Mobile Search Remain 5%
Higher than Desktop Bounce Rates
The average bounce rate for mobile
organic search traffic was 46% in Q1
2014 compared to 41% for desktop
organic search. The gap between
the two device classes has been a
persistent one with this quarter’s
results mirroring performance from
two years earlier.
Mobile Overall
Organic Search Bounce Rates
Mobile vs Overall Q1 2014
40%
30%
20%
0%
50%
10%
18. ORGANIC SEARCH & SOCIAL 18
Social Media Sites Contribute an Average of
1.5% of All Site Visits
The importance of social media sites as
traffic referrers remains highly variable
from site to site, but on average we find
that social sites generated 1.5% of all
site visits in Q1 2014, a slight increase
from Q4 2013. At the high end, we find
some sites generating 10-15% of their
traffic from social.
Social Share of All Site Visits
1.5%
1.0%
0.5%
0%
2.0%
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
Pinterest Generates 25% of Social Referrals on
Average, But Impact Not Consistent
Facebook continues to be the
dominant generator of social media
referrals with a share of 54% in Q1
2014. Pinterest is very interesting
though, as it has shown rapid growth,
particularly for retail sites. In Q1 we
found Pinterest generated 25% of
social media referrals on average,
but with a very wide range of results
from site to site. For the top quartile,
Pinterest generated 47% of social
referrals, but for the bottom quartile
that figure was just 3%.
Share of Social Media Referrals
Facebook
Reddit
Pinterest
Twitter
YouTube
Google+
LinkedIn
Other
54%
3%
25%
2%
3%
0.8% 12%
0.4%
Mobile Devices Account for 37% of Social
Media Referrals
While Facebook generated 53% of
its Q4 2013 revenue from mobile, we
find that mobile accounted for 37% of
all social media referrals in Q1 2014
and 35% of Facebook referrals. This
may speak to the nature of the ads
driving Facebook’s mobile revenues,
particularly mobile app install ads,
which do not refer traffic to sites
directly.
Mobile Share of Social Media Referrals
2013-Q42012-Q4 2013-Q1 2013-Q2 2013-Q3 2014-Q1
30%
20%
10%
0%
40%
37%
20. COMPARISON SHOPPING ENGINES 20
Amazon Product Ads See Biggest Y/Y Average
CPC Increase
While Amazon Product Ads, Nextag
and Shopzilla all saw year-over-
year increases in average CPC,
PriceGrabber and eBay Commerce
Network (ECN) CPCs held relatively
steady. The flexible bidding options
on these two engines have allowed
advertisers to keep CPCs the same
over time, while the other engines’
more rigid bid systems and increases
in rate card minimums have resulted in
steady CPC increases.
CPC by Engine$0.70
$0.40
$0.20
$0
Amazon
Product Ads
NexTag eBay
Commerce
Network
Shopzilla-
Bizrate
Other
2013-Q1 2014-Q1
PriceGrabber
$0.60
$0.50
$0.30
$0.10
Nextag Spend Share Nearly Gone, Down to 2%
of CSE Spend
The declining value of Nextag traffic
has further reduced spend share on
the engine, down from 13% in Q1
of last year to 2% in Q1 this year.
PriceGrabber and the eBay Commerce
Network both saw increases in spend
share year-over-year as their flexible
bidding systems allow advertisers
to adjust bids on low performing
products rather than exclude them
from their feed entirely.
Ad Spend Share by Engine40%
30%
20%
0%
10%
Amazon
Product Ads
NexTag eBay
Commerce
Network
Shopzilla-
Bizrate
Other PriceGrabber
2013-Q1 2014-Q1
Advertisers Getting Less Revenue out of
Nextag, Shopzilla Y/Y
While advertisers generated less
revenue from Shopzilla-Bizrate and
Nextag year over year, revenue from
the eBay Commerce Network grew
55%. The ECN continues to expand
by attracting new partners while
providing high value clicks.
PriceGrabber eBay
Commerce
Network
Shopzilla-
Bizrate
NexTag Amazon
Product Ads
80%
20%
0%
-80%
-40%
Y/Y Q1 Same Site Revenue Growth
21. COMPARISON SHOPPING ENGINES 21
Amazon Product Ads Average CPC 31% Higher
than Google PLAs
Average CPC for Amazon Product
Ads went from running 18% lower
than Google Product Listing Ads in
Q4 to 31% higher in Q1. PLA average
CPC decreased for most advertisers
post-holiday in response to declining
value and competition. Amazon’s rate
cards, on the other hand, remained
unchanged from quarter to quarter.
Amazon Product Ads
vs Google PLA CPC140%
80%
40%
0%
120%
100%
60%
20%
Google PLA Amazon
Product Ads
Revenue from Google PLAs Now More Than
Ten Times That of Amazon Product Ads
For advertisers using both, Amazon
Product Ads produced just 9% of
the revenue volume seen on Google
PLAs, down from 11% in Q4, as PLAs
saw relative traffic increases in Q1.
Relative revenue contribution varies
significantly by industry as a result
of Amazon’s restrictions on some
categories such as Apparel, as well
as PLAs being larger for retail sub-
industries like Home & Garden.
Amazon Product Ads
vs Google PLA Revenue
80%
40%
0%
120%
100%
60%
20%
Google PLA Amazon
Product Ads
23. DISPLAY ADVERTISING 23
GDN Accounts for 6% of Total Google Spending
For advertisers actively advertising on
the Google Display Network, GDN
spend is 6% of total Google spending
including AdWords text ads and PLAs.
The majority of GDN spend is allocated
to remarketing and placement ads,
while a small percentage goes to
contextual ads.
Google Text Ad Spend vs GDN
Google Text Ad & PLA
Spend
GDN
Spend
80%
40%
0%
120%
100%
60%
20%
Ad Spend on the Facebook Exchange Dropped
Significantly in Q1
Following the holiday season,
investment on the Facebook Ad
Exchange dropped over 40%. This
is due largely to seasonality within
the retail sector and decreased
competition as some advertisers who
invested in the space over the holidays
exited once demand died down.
Facebook Exchange Ad Spend & CPC Q/Q
Ad Spend CPC
80%
40%
0%
120%
100%
60%
20%
2013-Q4 2014-Q1
Advertisers Investing More Heavily in
Placements and Retargeting than Contextual
Ads on the GDN
Placementandretargetingadsaccount
for almost five times more spend on
the GDN than contextual ads. CPC is
also significantly higher for placement
and retargeting ads, as these clicks
typically carry greater value.
GDN Placements & Retargeting vs Contextual
Ad Spend CPC
80%
40%
0%
120%
100%
60%
20%
Placements & Retargeting Contextual
24. DISPLAY ADVERTISING 24
Lower Average CPC on FBX Remains Key
Performance Differentiator
While revenue per click is nearly
identical between Facebook
Exchange ads and other display ads,
CPC remains 33% lower on Facebook.
This has resulted in superior ROI on
the FBX platform, as there is still room
for competition to drive up the cost of
traffic.
Facebook Exchange vs Other Display
FBX Conversion Rate Higher, AOV Lower than
Other Display
While FBX ads offer a slightly higher
conversion rate than other display
ads, average order value on FBX is
12% lower. This may be indicative of
the demographic differences between
FBX traffic and clicks from other display
sources.
Facebook Exchange vs Other Display
Most Advertisers Continuing to Pursue Mixed
Prospecting, Retargeting Display Strategy
70% of RKG advertisers are targeting
both new and existing customers in
their display strategies, up from 63% in
Q4. Retargeting remains more popular
than prospecting among those not
using a mixed strategy.
Percentage of RKG Clients’ Display Goals
CPC Revenue Per Click
80%
40%
0%
120%
100%
60%
20%
Display Overall Facebook Exchange
Conversion Rate AOV
80%
40%
0%
120%
100%
60%
20%
Display Overall Facebook Exchange
70%
20%
10%
Prospect & Retargeting
Retargeting Only
Prospecting Only
26. MULTI-CHANNEL 26
Affiliate Share of Last Touch Revenue Up Y/Y,
Email Down
Last touch attribution models show
affiliates accounting for more than 15%
of revenue in Q1, up from 11% last year.
Email continues to show year-over-
year declines in last touch revenue
share, likely the result of mobile
email checking and the relegation of
marketing emails to a promotion tab
in Gmail’s tab system.
Revenue Share Among Marketing Channels
Last Touch Attribution Model
Affiliate CSEs Display Ad Email Organic
Search
Paid
Search
Social
2013-Q1 2014-Q1
Organic and Paid Search Revenue Share Higher
in First Touch Model
As search engines are frequently the
first stop in the conversion process
for consumers researching products,
organic and paid search account for
much higher shares of revenue using
a first touch model rather than last
touch. 45% less revenue is attributed
to affiliates using first touch instead of
last touch.
Change in Q1 Revenue Contribution Moving from
Last Touch to First Touch Attribution Model
Affiliate CSEs Display Ad Email Organic
Search
Paid
Search
Social
Online Customers Usually Interact with Just
One Channel
The average order now involves more
than four marketing touches, but
the vast majority of customers (76%)
interact with just a single channel.
Even the advertisers most likely to see
their customers interact with multiple
channels see about 60% of orders
placed after interaction with just one
channel.
Marketing Channels Per Order
One
Two
Three
Four
Five+
75.6%
18.6%
4.4%
1.1%
0.4%
25%
-50%
50%
0%
-25%
30%
0%
40%
20%
10%
27. RKG is a search and digital marketing agency that combines
superior marketing talent with leading-edge technology to
create the industry’s most effective data-driven digital marketing
solutions. RKG drives business to clients by maximizing a full range
of opportunities including paid search, SEO, product listing ads,
social media, display advertising and comparison shopping engine
management services.
Founded in 2003, RKG partners with clients such as Drugstore.com,
Express, Herman Miller, Jones Group and Urban Outfitters. In 2013,
Advertising Age ranked RKG the fastest growing search agency. A
privately held company, RKG is headquartered in Charlottesville,
VA with offices in San Francisco, CA, Bend, OR and Boston, MA.
For more information visit www.rimmkaufman.com or follow the
company on Twitter @rimmkaufman.
ABOUT RKG
METHODOLOGY
Figures are derived from samples of RKG clients who have worked
with RKG for each respective marketing channel. Where applicable,
these samples are restricted to those clients who 1) have maintained
active programs with RKG for at least 19 months, 2) have not
significantly changed their strategic objectives
or product offerings, and 3) meet a minimum ad
spend threshold. All trended figures presented in
this report represent same-site changes over the
given time period. Unless otherwise specified,
the data points in this report are derived from
the North American market region.
info@rimmkaufman.com
@rimmkaufman
rimmkaufman.com
rkgblog.com
