There’s no doubt about the increasing proliferation of mobile devices in the UK. In October 2012, Comscore reported that smartphones had a 62% penetration in the UK. YouGov also reported that there will be a staggering 10 million tablet users in the UK by August 2013, nearly one-sixth of the population. However, as gadget obsessed British consumers spend an increasing amount of time on their mobile devices, what impact does that have for advertisers? Well, Marin decided to take a look into this, and published our findings in our report, “Mobile Search around the Globe”.
The UK has the highest share of mobile clicks globally
In the UK, 24.4% of paid search clicks came from mobile devices, compared to 23.4% in the US, 22.5% in Singapore, 21% in Australia, 16.2% in Japan. The UK’s closest neighbours in the Eurozone saw 14.5% of paid search clicks coming from mobile. With the high penetration of mobile devices in the UK, consumers are increasingly conducting searches and clicking ads on mobile devices. But how are advertisers reacting?
While consumers lead the way, advertisers still lag
Despite consumers in the UK having the highest percentage of mobile clicks globally, UK advertisers are second behind their Singaporean counterparts in terms of budget allocation. Advertisers in Singapore allocate 20% of search budgets to mobile devices, while those in the UK allocate 19.3%. This still puts the UK ahead of the US with 18.4%, and the Eurozone with 11.8%. However, what is preventing UK advertisers from aligning their mobile search budgets with consumer behavior?
Advertisers struggle to track smartphone conversions
Whilst UK advertisers see impressive click-through rates on smartphones (5.87%) and tablets (3.93%) compared to desktop computers (2.29%), the Cost-per-click (CPC) suggest that advertisers aren’t investing as much in smartphones. CPC, which is a good indicator of how competitive the marketplace is, show that tablet searches are as competitive as desktop searches with average CPCs of £0.28 and £0.30, respectively. However, smartphone searches have fallen behind with an average CPC of £0.15.
The reason behind this is that advertisers believe conversion rates are lower on smartphones relative to computers and tablets. Despite efforts by advertisers to improve the mobile user experience, conversion rates remain slightly lower on tablets (2.6%) and smartphones (1.6%) compared to computers (4.1%).
Consumer “Showroom” to find the best deals
With smartphones performing worse in terms of conversion rate, advertisers are reluctant to increase their investment in these devices at the same rate as they are for tablets. However, there is another challenge that advertisers need to address—the growing trend in the UK, termed “Showrooming”, where consumers compare prices and research products on their smartphone while in a bricks and mortar store. This often results in consumers making purchases offline despite having researched those products on their smartphone. In 2013, we anticipate that many UK advertisers will look to address this challenge by utilizing voucher codes within smartphone search ads that consumers can redeem offline.
What should we expect in 2013?
The global adoption of mobile devices is dramatically changing the paid search landscape. This is especially true for tablets. Marin’s findings note that tablets will continue driving a larger share of paid search ad clicks in 2013. And with consumers increasing their use of tablets to research goods and services, and make purchases, Marin predicts that tablet conversion rates will surpass those of desktop computers by the end of 2013.