2016 Q4 Benchmark Report US

8/18/2019 2016 Q4 Benchmark Report US

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I N S I GS E R I E S

The Q4 2015 PerformanceMarketer’s Benchmark Report

Vital Search, Social, and Display

Performance Data by Device


http://slidepdf.com/reader/full/2016-q4-benchmark-report-us 2/102 INSIGHT SERIES The Q3 2015 Performance Marketer’s Benchmark Report marinsoftware.com

Introduction

Q4 is always a huge quarter for many marketers – it’s the pivotal period every year

for retail and several other verticals – and 2015 was no different. We took a look

at the Marin Global Online Advertising Index to understand device and platform

performance for this season.

Methodology

We sampled the Marin Global Online Advertising Index, which looks at over $7.2

billion worth of spend in the Marin platform. The Index primarily consists of enter-

prise-class marketers – larger advertisers and agencies that spend in excess of

$1 Million annually on paid-search, display, social, and mobile. As such, our data

sample and findings skew towards the behavior of larger organizations and moresophisticated advertisers.

We kept the study longitudinal by focusing on a representative set of global adver-

tisers who have been active on Marin for the previous five quarters, and measur-

ing key performance indicators (KPIs) on a year over year (YoY) and quarter of

quarter (QoQ) basis. This could result in slight variations in prior quarter data that

we’ve reported previously, but will make the analysis and findings more represen-

tative as we move forward.

Findings

Above all else – mobile helped make Q4 2015 a hugely successful shopping sea-

son for advertisers. eMarketer predicted that 52% of all digital ad spend would be

spent on mobile advertising. This came very close to reality when accounting for

mobile ad spend across all channels.

As of late 2015, desktop no longer has the majority for ad spend. eMarketer also

recently found that display advertising is the fastest growing segment of mobile

advertising1, and our findings corroborate this, with huge growth numbers in the

display ad market.

Search advertising remains the top channel for desktop ads, but throughout 2015,

this lead slowly thinned.

1. http://www.fool.com/investing/general/2015/09/22/where-have-all-the-ad-dollars-gone.aspx


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Search

For search advertising, desktops maintained a small margin on mobile across

most metrics. Smartphones continued to dominate YoY growth. While we saw both

smartphone and tablet growth at this point last year, desktops and tablets lost

ground in Q4.

This was the first quarter where click-share shifted to a mobile majority, with a

51–49 split for mobile devices. With current trends, it looks as if spend won’t be

far behind, and in 2016, mobile will continue to become the definitive device of

choice for both consumers and advertisers. This comes largely through consumer

and advertiser adoption of smartphones, rather than moving away from desktopand tablet, which have been relatively flat in growth.

US mobile ad spending, 2014–2019

2014 2015 2016 2017 2018 2019

Mobile ad spending (billions) $19.15 $30.45 $42.01 $50.84 $57.95 $65.49

—% change 79.5% 59.0% 38.0% 21.0% 14.0% 13.0%

—% of digital ad spending 38.5% 52.4% 62.6% 67.4% 68.6% 69.9%

—% of total media ad spending 10.9% 16.6% 21.6% 24.9% 26.9% 28.9%

Note: includes classified, display (banners and other, rich media and video), email, leadgeneration, messaging-based and search advertising; ad spending on tablets is included.Source: eMarketer, Sep 2015

Impressions Clicks Spend

SmartphoneDesktop Tablet

Conversions

61.46% 11.33% 27.21% 49.27% 10.58% 40.15% 56.74% 10.64% 32.62% 55.60% 11.21% 33.19%

Desktop Leads Search in Q4 2015



Display

Display was once again much more mobile-focused than search, with smart-

phones being the major driving force for this channel. With multiple quartersreporting a majority device share for smartphones, mobile display ads are the

most important for display advertisers.

While the YoY shift is not as large as it was in Q3, it’s still mostly in the double

digits away from desktop and tablet toward smartphone usage. Most interesting

is how heavily display conversions are skewed towards mobile devices, with over

60% of display conversions being on a smartphone. No other channel showed this

conversion behavior. The disparity between mobile click share and spend share is

shrinking from quarter to quarter, although there is still room to grow.


TabletDesktop Smartphone

Conversions

–5.48% –2.55% 8.04% –10.19% –3.16% 13.34% –8.19% -2.34% 10.53% –11.06% –1.93% 12.99%

Search YoY Change





Conversions

52.56% 9.01% 38.43% 38.83% 9.54% 56.63% 44.45% 15.31% 40.24% 27.35% 12.29% 60.36%

Smartphone Display Ads Lead to Clicks and Conversions



Conversions

–6.34% –5.33% 11.67% –10.84% –7.35% 18.19% –4.11% –1.23% 5.34% –25.31% –5.08% 30.39%

Display YoY Change



Social2

Social remained the most mobile of all channels and had the least YoY change of

all three. While consumer attention and advertiser spend was largely mobile on

this channel, conversions were still very close to even. Desktop had a slight edge,

with 55% of all social conversions.

However, with new ad formats and constant improvements to targeting, social

mobile ads made some real ground in the past year. By the end of 2016, social

conversions should become a largely mobile metric.


35.42% 64.58% 25.99% 74.01% 29.13% 70.87%

MobileDesktop

Conversions

54.67% 45.33%

Social Stays Mobile

2. Due to the way the data are currently structured, smartphone and tablet figures for social arecombined.



Customer Engagement and Interaction

We also benchmarked consumer engagement and interaction during last quarter,

looking at click-through rates (CTR) and cost-per-click (CPC) for significant year-

over-year change.


MobileDesktop

Conversions

–3.77% 3.77% –3.81% 3.81% –1.12% 1.12% –5.30% 5.30%

Social YoY Change

Search Display Social

2.02% 2.35% 3.72%


0.26% 0.43% 0.60% 0.73% 1.14%

Search Intent Means Higher CTR



Click-through-rates in Q4 2015 were in line with what we saw for the rest of the

year. Desktops had the lowest click-through rates, and smartphones led the pack

across all channels, showing that mobile devices are still leaders in customer

engagement and attention. Once again search is the channel with the highest

CTR, due to its inherent intent.

Cost-per-click had some interesting behavior during Q4. Smartphone search CPC

is usually close to desktop search CPC – this quarter, however, in a rare shift, it

fell behind tablet search CPC. This may be due to the value of desktop clicks dur-

ing the holiday season and the increase in the likelihood of conversion on desktop

during crucial periods at the end of Q4. The gap narrowed across the other chan-

nels, particularly the one between display desktop and tablet CPC.

ConversionsMuch of the odd CPC behavior became clear when we looked at conversion rates.

Conversion rates were significantly higher in Q4 than in Q3, especially for search.

This can also be attributed to the holiday season, with desktop once again being a

particularly important channel for search conversions in Q4. There were also

higher than normal conversion rates on display and slightly higher rates for

social.


100 87 71


25 31 17 1415

Tablets Beat Desktop in Search CPC



Since Q3, smartphone and tablet have overtaken desktop conversion for display

channels, and this trend continued in Q4. Across all metrics, smartphone display

advertising has really taken off, and has served cross-channel marketers well as a

high-converting and effective tool.

Conclusions and Recommendations

No Big Shake-ups in Q4 2015

Advertiser and consumer behavior largely acted as expected this Q4. Digital

advertising crept ever more mobile to keep pace with an ever more mobile and

interconnected world, and properly leveraging channel and device is crucial for

the smart marketer to reach audiences and encourage conversion.

The 2015 holiday season saw a continuation of consumer and advertiser behavior

exhibited in Q3. While conversion rates and click-through rates were higher in Q4

than in Q3, this can be attributed to the holidays and the nature of the shopping

season, with its many sales and specials.


15.37% 14.43% 11.26%


4.17% 6.75% 1.47% 0.43%5.51%

Conversion Rate Boom


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Search for Last-Click, But Social and Display for Better ROI

Social platforms remain important for mobile reach and engagement, while

search is still the main pathway for last-click conversion. For a search advertiser

who’s seeing diminishing returns on their search campaigns, it makes sense to

shift funds away towards either social or display platforms, where their spend

can be utilized to greater effect – especially the recent growth in display mobile

conversion rates is taken into account – and while costs are still relatively low.

The Importance of Mobile Attribution

Advertisers also must closely examine their mobile campaigns in order to improve

their conversion tracking to truly understand how these campaigns influence their

bottom line. Mobile clicks can translate into multiple paths to conversion that are

not captured online.

If an advertiser cannot properly attribute these conversions back to the initial

mobile click or view, complete understanding of mobile influence on marketing

campaigns can’t be attained, which will influence future spending when budget

decisions are made.

Mobile marketing has become the device of choice for consumers, and advertisers

must redirect spend and attention to account for this paradigm shift. With tools

like Marin Software to help advertisers understand cross-channel and device

performance, it becomes easier for advertisers to find crucial opportunities inthis ever-changing space to reach and engage their audience wherever they may

be looking.

About Marin Software

Marin Software Incorporated (NYSE: MRIN) provides a leading Revenue Acquisi-

tion Management platform used by advertisers and agencies to measure, manage

and optimize more than $7 billion in annualized ad spend. Offering an integrated

platform for search, social and display advertising, Marin helps advertisers and

agencies improve financial performance, save time, and make better decisions.

Marin’s technology powers marketing campaigns in more than 160 countries.

For more information about Marin’s products, please visit:

http://www.marinsoftware.com/solutions/overview.

2016 Q4 Benchmark Report US

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