Invest in search now while prices are low

This week saw the publication of two important pieces of news that should prompt marketers to shift more of their digital spend towards search in the short term, as costs are currently low but returns are likely to be high.

Lara O'Reilly

Adobe told brands they were “under-investing” in mobile and tablet search advertising and that marketers have just a “six month window” before prices significantly rise from their relatively cheap cost per click (CPC), compared to desktop ads.

In the first quarter of 2012, tablet CPC was 20% less and mobile about half as much as traditional desktop search.

While mobile and tablet ads’ actual conversion rates were about 25% less than desktop in the period, when you factor in cost and tablets’ average order values, investment in search on these devices is likely to offer a better return than desktop.

And this comes as search behemoth Google revealed that even its CPC is currently bargain price. Google’s CPC dropped 6% on the previous quarter in the three months to 31 March – down 12% year on year.

Analysts questioned the drop in value of its CPC, wondering whether this could dent future revenues – but considering Google reported a 24% increase in revenue to a whopping $10.65bn (£6.7bn) year on year and a 60% profit uplift in the period, it seems advertiser demand is still very high.

Larry Page, Google’s CEO, told analysts: “If anything, lower CPCs give better return on advertising spend: it’s a lower cost so a better return on investment for advertisers.”

Of course, rushing to invest in something, anything, just because it’s cheap usually turns out to be in a disaster (just look at how many people have owned Portsmouth Football Club in recent years). That said in an inflationary, auction-based environment, time is of the essence if brands are going to make the most of the recent dip in CPC in the next few months, as increased demand will no doubt push prices up.

Click volumes are actually increasing at twice the rate that CPC is declining, according to Marin Software, meaning that advertisers are serving an audience that demands such marketing to help them make more informed decisions.

Around half of internet users have researched and compared products online, while 40% of offline buyers have conducted online research prior to purchase, according to a European study by GfK and Google across five sectors, including clothing and banking.

It’s clear that search is one of the easiest ways for marketing to act as a service, rather than blurting out a message to deaf ears.

Search may not be sexy, or creative, and it’s less likely than a TV campaign to win any coveted trade awards, but it is the ideal medium to speak to an audience that is actively seeking further information – often ahead of a purchase. It can also act as the thread that links marketing activity from the offline world, such as an outdoor campaign, to the digital, by signposting users towards websites or social media pages.

Search is currently the marketing hot cake, make sure you grab it while it’s hot – and relatively cheap.

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