Potential Contributing Factors of Mobile CPC

With tactics ranging from branding to online ROI focused, Mobile paid search goals can differ significantly across advertisers.  Due to mobile’s more limited ad real estate, with generally only a few ads being displayed, mobile CPCs in aggregate are also biased by the type of keywords that are most likely to achieve traffic, specifically, ads in high positions with high bids.

With that in mind, we wanted to catch a truer sense of Google mobile CPC compared to desktop by eliminating as many variables as possible that could influence the aggregate view.  The straightforward way to do this is by starting with search campaigns that are opted into showing ads on both desktop and mobile devices with full browsers.  The keywords in these campaigns have the same bids, copy and landing pages.  We also restricted the list of campaigns to those showing on Google.com only to eliminate skewing effects of the Search Network.

From there we looked only at keywords on exact match to eliminate broad matching effects and compared mobile CPCs to desktop CPCs for the same keywords.  We found that mobile CPCs are a median 41% lower than desktop CPCs for the same term with the same bid, copy, match type, network targeting and landing page.   These results were quite reliable across a sample of clients with the standard deviation at 5%.

Given that the directly computable value of mobile traffic to the advertiser is considerably lower than that of desktop, this was encouraging to see.  Even so, for advertisers steering their mobile efforts by directly measurable online ROI, this is not a large enough drop in CPC to keep mobile efficiency in line with desktop, given mobile sales per click rates of roughly 10-20% of that of desktop. 

Why are mobile CPCs so much lower than desktop with all else being equal?  There are a few potentially contributing factors:

• Lower competition:  Again, we are looking at cases where our mobile bid is the same as our desktop bid, but if other competitors in these auctions have lowered their mobile bids due to the lower online conversion rates seen for mobile, it would clearly drive down CPC.
• Higher Quality Scores:  According to Google, QS is calculated the same way for mobile and desktop so having a higher click through rate for mobile would seemingly drive down CPC.  But, we also hear that for keywords targeting both, they are not making a distinction between the two, so for this analysis, QS differences should not be a factor.  Supporting this, we do not see much if any correlation between mobile click through rate relative to desktop and mobile CPC relative to desktop.
• Speculative Reasons:  Google may not be applying the same minimum promoted bid threshold, which serves as an artificial competitor on desktop searches and drives up CPCs.  It’s also possible that Google is applying a form of smart pricing to mobile given its lower online conversion potential, but that is purely speculative.

As always, your results may vary and we can certainly imagine cases and verticals where the data is likely to look different.  Still, it appears that a mobile click is significantly less valuable to Google than the same desktop click.  With mobile growing very rapidly, expect a heavy push from the engines to consider alternative performance indicators for valuing mobile.  

Written By - Mark Ballard 
If you want to read the original post then Click on Google Mobile CPC: 41% Lower than Desktop

Posted in: SEO in Mobile