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No Free Ride for Merchants as Google Monetizes Mobile

Mobile ecommerce continues to see vigorous activity, something that online sellers need to understand and embrace. But new research shows that as Google monetizes mobile search, it’s impacting traffic from organic (non-paid) search.

In the first quarter of 2016, Google saw a paradox with its advertising business. The halcyon days of organic search results and desktop computer dominance have receded. Average costs per click and visits from organic search yield to the rolling tide of mobile advertising.

And according to recent research from Merkle it couldn’t be better for Google. The Merkle Q1 Digital Marketing Report said the increase in mobile ad volume “is ultimately propelling Google search spending to a six-quarter high.”

By the numbers, Merkle found spending on Google paid search up by 25 percent year over year for the quarter. Clicks rose 33 percent while costs per click dropped 6 percent. For Google PLAs, Merkle said these accounted for 43 percent of search ad clicks within the retail vertical.

The fall of organic search, particularly on the mobile side, can be tied to Google’s dramatic tacking into the winds of mobile search around this time a year ago. This startling Mobilegeddon at Google found the company working to dominate mobile advertising.

Merkle noted how, in the history of their Digital Marketing Report, organic search visits from phones dropped year over year in Q1 2016 for the very first time.Merkle said these organic traffic level fell as Google moved to monetize mobile search results.

Elsewhere in advertising, Merkle found Connexity and the eBay Commerce Network taking 96 percent of comparison shopping engine spending for the quarter. They partly attributed this to the late 2015 closing of Amazon Product Ads.

Here’s what Merckle found:

“Connexity and the eBay Commerce Network drove just 8% and 5% as much revenue for advertisers as Google Shopping Ads (PLAs) did in Q1, among brands advertising through all three platforms. While this is in large part due to Google Shopping Ads’ greater traffic volume, Shopping Ads also convert at roughly twice the rate of ECN ads and four times the rate of Connexity ads. While Google is not a true CSE, it is the largest opportunity for feed-based advertising.”

In social media, Facebook took 62 percent of such visits in the quarter, trailed by Pinterest with 21 percent while Twitter and Reddit each took about 2 percent of social media visits.

You can download a copy of the report on the Merckle website – required reading if you advertise your products online, and fascinating even if you don’t!

David A Utter on LinkedinDavid A Utter on Twitter
David A Utter
David A Utter
David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. You can find him on Twitter @davidautter and on LinkedIn.