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 desktop and tablet, which have been relatively flat in growth.

[Download PDF to see Graphs]

Display

Display was once again much more mobile-focused than search, with smartphones being the major driving force for this channel. With multiple quarters reporting 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

[Download PDF to see Graphs]

Social

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.

[Download PDF to see Graphs]

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 yearover-year change.

[Download PDF to see Graph]

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.

[Download PDF to see Graph]

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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 during 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 channels, particularly the one between display desktop and tablet CPC.

Conversions

Much 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.

[Download PDF to see Graph]

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.

Search for Last-Click, But Socia land 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 in this ever-changing space to reach and engage their audience wherever they may be looking.