PPC Cost Per Click & Clickthrough Rates Increase in Q2 But Total Clicks Are Down
Comparing the second quarter of 2016 to the first quarter of the year, Kantar Media's AdGooroo measured quarter over quarter progress on 6 key paid search advertising metrics for U.S. Google Desktop Text Ads in 14 different industry categories, including Retail (general), Apparel, Shoes, Beauty & Cosmetics, Consumer Electronics, Jewelry, Flowers & Gifts, Home Furnishings & Decor, Home Improvement, Travel Comparison Sites, Hotels & Resorts, Banking & Credit Cards, Universities and Online Education, and Automotive Manufacturers and Dealerships.
The following chart combines results across all 14 categories:
Advertisers Pay More Per Click
Among the findings, advertisers paid more for clicks to drive visitors to their site. Looking across all 14 categories, the average cost per click increased by 8% in Q2. In fact, the average CPC increased in Q2 in every category except Hotels & Resorts, where the average CPC dropped by 2%. The largest increases in cost per click came in three categories, Beauty & Cosmetics, Consumer Electronics and Universities & Online Education, which each saw a 14% increase in the average cost per click.
Clickthrough Rates Up, But Total Clicks & Impressions Down
Across all 14 categories, average clickthrough rates improved by 18%. Every category experienced an increase in the average CTR, except for the general Retail category, whose CTR remained flat quarter over quarter. Despite better-performing ads, however, the total number of clicks across all 14 categories actually decreased in Q2 by 3%. Every category saw a decrease in total clicks except for five: Home Improvement (+4%), Flowers & Gifts (+15%), Travel Comparison Sites (+29%), Hotels & Resorts (+60%) and Home Furnishings & Décor (0%).
The reason for less total clicks is less consumer eyeballs, as total impressions dropped by 19% across all 14 categories. The reason for less impressions may be due to Google dropping ads on the right rail toward the end of February and may be because consumers are searching elsewhere – the Paid Search Advertising Index currently measures Desktop Search and does not include Mobile Search.
Spend Up Slightly
Paid search ad spend increased by 4% across all categories, with significant increases seen in two travel categories, Hotels & Resorts (+56%) and Travel Comparison Sites (+33%), as well as the Flowers & Gifts category (+28%).
In what may be another result of Google dropping its right rail text ads, the total number of advertisers competing across all 14 categories dropped by 12% in Q2. In fact, every category experienced a decrease in total number of advertisers from quarter to quarter, with the Shoes and Flowers & Gifts categories each showing the largest drop, 18%.