Performance Marketing Benchmark Report Holiday 2014: Mobile Has Arrived

The holidays are done. The presents have been given and returned. The food has been feasted upon. And the marketing budgets for the holiday season have swelled and been spent.

This means it’s that time of year again where we look back at the Marin Global Online Advertising Index (put together by my employer) — consisting primarily of large marketers who spend $1 million+ annually across search, display, social, and mobile — to understand device and platform performance over the past quarter. (For more, you may download the full Performance Marketer’s Benchmark Report — registration required.)

Key Takeaways

1. Understanding and using search intent data can lead to cost efficiencies.
2. Conversion attribution on mobile devices continues to be a sticking point for advertisers.
3. Mobile marketing performance metrics are close to reaching parity with desktop performance.

The inexorable march toward a smartphone-dominant world continues as, once again, smartphone usage increased quarter-over-quarter across all channels. Consumers are now buying and using mobile devices more than ever. The numbers speak for themselves:

• Mobile drives over 50% of all social activity.
• Mobile has surpassed desktop in Internet usage, with smartphones and tablets accounting for 60% of consumers’ time spent online.
• The shift toward mobile is largely driven by a younger demographic. A September 2014 report by Millennial Media revealed that 70% of adults aged 18 to 24 viewed retail content from a mobile device.

Taken together, these data points highlight the shift in consumer behavior from desktops to smartphones and tablets, and further underline the importance of an effective cross-device strategy.

Did The Continuing Shift Toward Mobile Affect Advertisers’ Strategies?

Mobile device share of spending has increased significantly over the past year. Advertisers spent nearly 50% of their search budget on mobile devices, yet mobile conversions made up only 30% of all search conversions. This suggests that advertisers believe in the power of mobile even though it tends to drive comparatively fewer conversions than desktop.

If you think about it, this strategy makes sense. The “mobile” quality of mobile devices allows for successes up and down the conversion funnel, depending on when and where the consumer is engaging.

Take a typical store visit, for example. A mobile search can act as a top-funnel touch point if a consumer searches for a particular brand, or as a mid-tunnel touch point if they search for product or brand reviews. It can even act as a low-funnel touch point — for instance, if the user searches for price comparisons on a specific product.

Beyond search, we noticed similar trends across display and social channels. In particular, advertisers have placed a heavy mobile focus on display advertising. We expect this trend will grow even stronger as companies like Google, Twitter and Facebook increase their mobile footprint and inventory options.

How Did These Trends Affect Advertisers’ Bottom Lines?

Looking at performance by channel, search remained the clear leader in click-through rates, with social and display lagging sharply behind. This finding is in line with historic trends, yet as social and display channels become more significant parts of the marketing mix, advertisers will need to adapt accordingly.

This means going beyond last-click attribution and, at the very least, adopting view-through conversions as a key performance indicator.

In terms of performance by device, we found that click-through rates were consistently highest on mobile, showing how good these devices are at capturing consumer attention and enticing engagement.

On the other hand, desktop continued the trend of achieving significantly higher conversion rates relative to mobile. This shouldn’t come as a surprise; consumers have historically been more willing to complete purchases on a desktop PC rather than a mobile device.

However, the true conversion value of mobile is likely underestimated due to marketers still relying on last-click attribution methodologies.

As advertisers move away from last-click attribution models and adopt cross-device solutions that connect mobile view-throughs to desktop conversions, we’ll likely gain a much better understanding of these numbers, and the conversion impact of mobile is likely to rise.

We also examined cost-per-click trends, which closely mirrored the conversion rate behavior above. Desktop CPCs were significantly higher compared to smartphone and tablet CPCs. These numbers can largely be attributed to desktop’s proven ability to drive eyeballs and conversions, as well as the increased competition within the channel.

Conclusions

While desktop has kept its crown as the king of conversions, it’s clear that mobile devices are at the forefront of consumer and advertiser attention, with huge portions of ad spend and consumer time moving away from desktops toward smartphones and tablets.

Consumer behavior varies drastically by platform, and so marketers that understand the intersection between channel and device will have the edge when it comes to reaching and converting audiences.

It’s also becoming increasingly important for marketers to develop a broader approach to measuring conversions, particularly one that takes into account the “assistive” nature of social, display, and mobile advertising, in order to properly attribute conversions and get an accurate picture of the ROI for each channel.

The ability to discern where conversions are truly coming from will not only help correct the disparity in mobile spend versus conversion share, but will also help advertisers know how to allocate spend for the greatest return.

As online advertising continues to shift across both channels and devices, and as the global marketplace becomes more saturated with smartphones and tablets, the best thing marketers can do is understand how consumers are interacting across devices.

With tools to help advertisers analyze cross-channel and device performance, it becomes easier to find crucial opportunities in this ever-changing space to reach and engage audiences.