Mobile Will Be 22 Percent Of Search Revs Next Year — Report

Efficient Frontier (EFF) and Macquarie Capital have released a new report containing a metric that should get everyone’s attention: the firm is projecting US mobile paid search spending (including tablets) could account for up to 22 percent of total search revenues by the end of 2012. The firm’s report also contains a “less aggressive” projection that puts mobile search revenues at roughly 16 percent of the total market.

EMarketer has forecast that total US search ad revenues will reach just over $17 billion in 2012. If we do the simple math, and assume that mobile spending doesn’t add anything more to overall revenue growth, here’s what we get under EFF’s two mobile scenarios:

  • 22 percent: $3.7 billion
  • 16 percent: $2.7 billion

It’s worth noting that tablets already account for a significant portion of mobile search ad spending, as well as mobile clicks:

Efficient Frontier is seeing a sharp ramp in its search spend on Tablet devices. Over the past three months (Aug 2011 – Oct 2011), Tablets accounted for 43% of Efficient Frontier’s mobile search spend, and 50% of click share.

Google stands to be the beneficiary of mobile search revenue growth, at a disproportionate level vs rivals. Among EFF’s client base more than 95 percent of mobile search ad spending goes to Google.

This is commensurate with and a direct result of Google dominating mobile search. According to StatCounter Google controls about 95 percent of browser-based mobile search in North America.

Summarizing EFF’s lengthy discussion of mobile paid-search performance, mobile ads have higher CPCs and better CTRs but mobile ROI is less because of lower conversion levels:

  • Across its advertiser clients, Efficient Frontier found that the average CPC on mobile phone search campaigns was actually slightly above (8% higher) than CPCs for desktop search campaigns.
  • Mobile phone and tablet click-through rates for Efficient Frontier’s search advertisers are higher than for its desktop search campaigns, at 166% and 137%, respectively, of CTRs in desktop search.
  • Lower conversions for mobile search campaigns result in ROI that is only 50% of the ROI for desktop campaigns according to Efficient Frontier’s data. Notably, 50% represents a significant improvement for this metric compared with mid-2010, when mobile ROI was only ~10% of desktop levels.

There’s a major caveat here however. ROI on mobile campaigns is being measured by traditional “conversion” metrics used on PC campaigns. EFF points out that a broader and more mobile-specific set of conversion metrics needs to be developed to evaluate the true efficacy of mobile search ads:

Until advertisers can more accurately attribute a wider range of “success” events such as offline store visits, offline and (delayed) online (desktop) sales, and phone calls to a mobile ad campaign, marketers using a traditional ROI-based approach to make campaign budget decisions will be less willing to increase mobile ad budgets. In the meantime, we expect “early adopter” mobile marketers will continue to test mobile as both a performance-based and branding ad medium.

EFF also compared query length on the PC, tablets and mobile devices. As was somewhat predictable, EFF found that PC queries are the longest, followed by tablets and mobile handsets in that order. It’s possible, however, that voice search may create longer and more specific mobile query strings in the future.

Related Topics: Channel: Mobile | Google: Mobile | Stats: Search Behavior | Stats: Spend Projections | Top News


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

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  • SFM

    I don’t even get sponsored listings when I use google on my smartphone.

  • Miles B

    the link to the original report seems to be dead – does anyone have a copy of the eFrontier report that they could share? Thanks!

  • Jon

    Looks like it’s available via white paper download at

  • harvey bennett

    interesting average query length/average character length. average mobile query is 1.18 (call it 1) words and average character length is 18.12 (call it 18).

    sure its an average so lets say that some are 18…

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