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By Nate Gawel Jan 10 2013 Blog

Paid Search: Leading the Mobile Revolution

Yes, “mobile” is no longer a thing of the future.  It is here and it is prominent, but still struggles to get its share of the advertising dollars.

According to an AdAge White Paper, consumers’ media consumption time on mobile is up to 10 percent, while marketers’ share of advertising budgets is only 1 percent – this is a large gap.

On top of that, mobile usage is only picking up steam. Some studies predict that the usage of mobile devices for search will surpass desktop in 2014, and others believe local search volume will surpass desktops in 2015.

Whichever proves to be more accurate, it doesn’t matter as the fact remains the same: Your customers will be on their mobile device more than their desktops…yet we spend only 1 percent of our advertising budgets in the space.

Just as paid search blazed a trail on “audience buying” and “RTB,” it’s leading the way on mobile advertising, as well. According to a Marin Software study, smart mobile devices will account for 25 percent of all paid search ad clicks in Google’s network by end of year and were about 12 percent of total search budgets in 2012, according to a Yahoo!/Bing Study.

The share of the budget that mobile search gets is a smaller percentage than the click share because mobile CPCs are less expensive. As competition picks up, CPCs will pick up, ultimately lifting the share of budgets at a faster rate.  However, that gap is much smaller than the industry as a whole (see above: 10 to 1).

Here at Centro, we see a little over 15 percent of our advertising budgets in paid search going toward mobile.  While search marketing continued to be the biggest contributor to online advertising in 2012 at 46 percent, according to eMarketer, it is often overlooked as media of the future. Well, look no further.

As the interactive community becomes more favorable to performance and results-based media, paid search will continue to provide high ROI and large budgets.  According to Adobe, tablets and mobile phones have the highest ROI and tablets have the highest conversion rates when compared to desktops.

With growth in impression inventory estimates up to 120 percent year-over-year, look for advertisers to become more aware of the Mobile Paid Search opportunity and begin asking the question “how can I spend more in mobile?”