RKG Q2 Report: US Search Ad Spend Up 23 Percent YoY, Both Google And Bing Ad Spend Rise

After slowing down after the holiday season, U.S. paid search performance metrics are up both year-over-year and quarter-over-quarter in Q2 2014 according to RKG’s quarterly report. Ad spend rose 23 percent year-over-year among RKG’s retail-heavy client base. Both Google and Bing saw spend increases.

Q2 2014 US Paid Search Trends - RKGNon-Brand Search Trends

Overall spend on Google rose 24 percent year-over-year. PLAs continued to be a key driver in Google’s non-brand performance. CPCs for PLAs jumped nearly 35 percent, compared to 12 percent for non-brand text ads year-over-year. Overall CPCs rose by 29 percent compared to a year ago.

Google Non-Brand PPC Q2 2104 - RKG

Ad spend on Bing rose 19 percent overall. Bing non-brand spend also increased by 19 percent, nearing Q4 levels, and click volume rose by 26 percent. With mobile traffic share increasing, CPCs fell 6 percent year-over-year.

BIng US Non-Brand PPC Q2 2014 - RKG

Product Ads & PLAs

Spending on image-based product ads increased by 72 percent year-over-year in Q2. Click share rose by 28 percent and CPCs bumped up 35 percent. In contrast, text ad spending rose by just 11 percent year-over-year.

PLA vs Text Ads US PPC Q2 2014 - RKGGoogle PLAs generated 26 percent of Google PPC clicks overall and 50 percent of non-brand clicks among advertisers running both PLA and text ads. Click share remained flat from the previous quarter.

Bing Product Ads which launched in beta last fall, and became available to all advertisers at the end of March, drove 8 percent of Bing Ads non-brand clicks and spend.

Bing Product Ads generated 48 percent higher revenue per click (RPC) than non-brand text ads — far outpacing Google’s 17 percent spread between PLAs and non-brand text ad RPC. CPCs were 8 percent lower and CTRs were 19 percent better.

Bing Product Ads Performance vs Text AdsQ2 2014 - RKG

Google vs. Bing

Google gained close to a percentage point in paid search spend share in Q2 year-over-year to 82.8 percent, driven by rising PLA cost-per-click. Bing gained just over one point in click share from the previous year, rising from 17.4 percent to 18.5 percent of click volume.

Google’s non-brand conversion rate was 52 percent higher than Bing’s over the quarter. As a result, Google commanded 48 percent higher CPCs on non-brand clicks than Bing. Here again, Google benefitted from its PLA program, with PLAs producing a 37 percent higher conversion rate than non-brand text ads.

Google PPC vs Bing Ads Q2 2014 - RKGAverage order value between the two engines was nearly equal on non-brand ads, and the ROI spread was just 9 percent, in favor of Google.

Mobile Gains

This quarter marks the first time smartphone PPC click share has surpassed tablet. Tablet share of clicks remained flat at 18 percent compared to Q1 2014 Smartphone click share ticked up a point to 19 percent, up from 14 percent a year ago.

Tablet spend share fell a point this quarter to 19 percent, while smartphone spend rose by two points to 9 percent. Overall, mobile spend share hit 27.7 percent, up from 26.9 percent in Q1 and 24.1 percent a year-over-year.

Smartphones generated 25 percent of cross-device conversions and 12 percent of single-device conversions. RKG found Google’s cross-device estimates surfaced 7 percent more conversions overall and 14 percent more smartphone orders.

Cross-device conversions breakout Q2 2014 - RKGFor many more insights, including organic and social trends, download the full report here.