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Search advertising is the focus of the latest monthly Global Ad Trends report by WARC, compiled based on an analysis of WARC’s adspend data for 12 key markets – Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, United Kingdom and United States.
According to the report, search advertising spend will amount to $100.5bn in 2018, an increase of 11% from $90.5bn in 2017. This equates to one in five dollars spent on advertising worldwide this year.
Mobile search is expected to attract $62.7bn this year – 62.4% of total search spend within WARC’s 12 key markets. Mobile’s share of total search spend has near doubled since 2015, driving wider sector growth.
Across mobile and desktop, paid search’s share of global advertising spend has trebled over the last decade, rising to over a fifth this year. Search’s share is expected to reach 22% in the US this year, 26% in China, and near 30% in the UK. Most of these gains have been at the expense of display formats.
Analysis of company reports shows that the four largest providers – Google, Baidu, Yahoo and Microsoft’s Bing – made a combined $101bn from paid search in 2017, of which $10.5bn came from outside WARC’s 12 key markets. Google dominates the landscape, drawing an estimated $85.8bn in 2017 (up 20% from 2016). Baidu ($10bn), Yahoo ($3bn) and Microsoft ($1.8bn) follow some way behind, but all saw revenues grow.
Figures from April 2018 show that Google’s share dips closer to two-thirds (66.8%) in the more mature desktop market. Baidu controls a fifth (20.5%), Bing takes 7.7%, Yahoo 3.5%, and others 1.5%.
Data for 16 product categories show that paid search routinely outperforms online display advertising in terms of both conversion and click through (CTR) rates. On average, search ads recorded a CTR of 3.3% compared to just 0.57% for online display. With regard to conversion rates, search’s average is 4.32% compared to display’s 1.09%.
The stronger results from search advertising come at a cost for advertisers. On average, the cost per click (CPC) for search ads is over four times higher than for display, at $3.00.
Smartphones are driving voice search, with data showing that 47% of users utilise voice tech at least once a month on a global level. Of those that use voice tech at least once a week, the top six activities are search related, including online searches (60% of users), finding information on a product (53%), asking questions (50%), asking for directions (42%) and finding information on a brand or company (41%).
Neurological research shows that when people ask a question involving a brand name, their brain activity demonstrates a significantly stronger emotional response compared to people typing that same brand question. This emphasises the need for brands to craft the sound of their own voices.
Image search is also gaining momentum, with half (51%) of UK millennials having used the feature, while almost a fifth (17.6%) already do so regularly. Households with children also demonstrate similar adoption levels to millennials. However, brands looking to advertise against visual search queries may have to wait some time before digital platforms advance inventory beyond basic text-style search terms.
Global Ad Trends is part of WARC Data, which is available by subscription only.