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Performics Mobile Paid Search Benchmarks & Trends (Q1 2012)

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Mobile paid search spend is now 17.8% of all paid search spend

Many advertisers “warmed up” to mobile and increased investment to catch trends

Mobile spend volume is close to 5X higher YoY

Tablets are 32.1% of mobile spend

Mobile Paid Search Spend Surges in March

* Based on Performics’ aggregate client base; Google AdWords (Content & Search Partners excluded) (April 2012)

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Driven by an increase in tablet impressions,mobile impression share isnow at an all-timehigh

Mobile Impression Share Peaks in March at 18.6%

* Based on Performics’ aggregate client base; Google AdWords (Content & Search Partners excluded) (April 2012)

Tablets are now 39.6%of all

impressions

This is a 12.1% M/M increase

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Tablet and smartphone users differ, motivating advertisers to segment by device in terms of strategy (day-parting, messages) & budget allocation

Smartphones: your constant companion– shopping/errands– looking for store location, phone; click-to-call– product reviews/comparisons in store– geo check-in

Tablets: your couch companion– entertainment with families– watching TV– in bed

What’s Driving Advertiser Interest in Tablets?

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Mobile Click Share Also Reaches All-Time High

* Based on Performics’ aggregate client base; Google AdWords (Content & Search Partners excluded) (April 2012)

Breaking records set overholiday, mobile paid clicks are now 24.6% of all clicks

In terms of mobile clickvolume, Mar. 2012 is onlybehind Dec. 2011

Tablets are now 36.5% of all clicks

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Mobile is exploding, but not at the expense of desktop

We see desktop search volume growing, just not nearly at the pace of mobile

This is a function of the always-connected searcher:– Searchers aren’t abandoning their desktops in favor of mobile– They search on their desktops at work, smartphones on the way home, and

tablets at night in front of the TV

But, given the similarities in experience and that most tablet users are tethered to Wi-Fi, tablets and laptops are sharing some territory

Where is This Growth Coming From? Is Mobile Cannibalizing Desktop?

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Searchers are de-tethering from the office/home/desktop

People are searching in entirely new places, in the middle of new exchanges and processes and with entirely new needs

Device will become merely a signal. What's increasingly important is understanding the context, the specific audience and its intent.

Over Time, Device Will Be Just a Signal

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Tablets CPCs are 85% ofdesktop CPCs

Smartphone CPCs are 55%of desktop CPCs

With Low CPCs, Mobile Is Still a Buying Opportunity

* Based on Performics’ aggregate client base; Google AdWords (Content & Search Partners excluded) (April 2012)

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Mobile search continues to take a larger piece of the search pie (especially due to localization)

Mobile CPCs remain lower than desktop

Therefore, overall (desktop + mobile) Google CPCs dropped in Q4 and Q1, causing concern for Google investors

But the better indicator of Google’s health is click volume. Even if CPCs drop, click growth results in higher revenue for Google.

Plus, lower CPCs give advertisers more opportunity for efficiency

Is Mobile’s Growth (with its Low CPCs) Hurting Google’s Bottom Line?

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Mobile CTRs increased9.8% M/M and 25.2%Y/Y

March’s mobile CTR increase was driven bymobile devices (i.e.smartphones) ratherthan tablets– Mobile device CTRs

increased 18.2% M/M– Tablets decreased 2.1%

Mobile CTRs Continue to Outpace Desktop

* Based on Performics’ aggregate client base; Google AdWords (Content & Search Partners excluded) (April 2012)

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In March, mobile CTRs were driven by smartphones

Google is increasingly providing advertisers with more opportunities for enhanced listings on smartphones:

On the smaller smartphone SERP, enhancements occupy more space (not to mention, users don’t scroll like on desktop and tablets). Thus, CTRs rise.

What’s Driving Mobile CTRs Above Desktop?

Sitelinks Click to Call Product Ads Location Extensions Offer Ads Click to Download