SEARCH advertising is proving less lucrative as people use smartphones and tablets to browse the web, new research shows, in a blow to companies such as Google.
Data from advertising management firm Marin Software, seen by City A.M., show that the price search engines can charge companies in the UK for a mobile advert is under half what they charge on a desktop.
Google and other search engines charge on a per click basis, so each time a user selects an advert on search results, the advertiser pays out. The average amount a company pays in the UK for a desktop click is 32p, but on a mobile, search engines are only able to command an average of 15p. Tablet ads are worth around 28p per click.
This is a problem for search companies, due to the seismic shift away from computers as smartphone adoption rises.
Marin claims that 19 per cent of search clicks are now registered through smartphones and tablets, up from nine per cent at the start of the year. “We expect that to continue to grow,” Marin’s European commercial director Jon Myers said. He pointed out that the cheaper adverts on smartphones were “a real opportunity” for advertisers, but that “the conversion rate for mobiles has not historically been as good”.
Google has itself admitted that the shift to mobiles is a problem. In its third-quarter results, the search giant revealed that the average amount it charges per click had fallen 15 per cent year-on-year. This revelation, along with a fall in profits largely attributed to its acquisition of Motorola, sent Google’s shares down nine per cent.
The figures also revealed that the UK is ahead of its European counterparts in mobile web browsing. While 19 per cent of search ad clicks in the UK are via mobile, this figure is just 10 per cent in the Eurozone.