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MOBILE SEARCH TRENDS Dominating SERPs While Venturing into Apps and Anticipatory Search NOVEMBER 2014 Cathy Boyle Contributors: Rimma Kats, Chris Keating Read this on eMarketer for iPad
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Page 1: MOBILE SEARCH TRENDS · MOBILE SEARCH TRENDS: DOMINATING SERPS WHILE VENTURING INTO APPS AND ANTICIPATORY SEARCH ©2014 EMARKETER INC. ALL RIGHTS RESERVED 3 THE AUDIENCE OF MOBILE

MOBILE SEARCH TRENDSDominating SERPs While Venturing into Apps and Anticipatory Search

NOVEMBER 2014

Cathy Boyle

Contributors: Rimma Kats, Chris Keating

Read this on eMarketer for iPad

Page 2: MOBILE SEARCH TRENDS · MOBILE SEARCH TRENDS: DOMINATING SERPS WHILE VENTURING INTO APPS AND ANTICIPATORY SEARCH ©2014 EMARKETER INC. ALL RIGHTS RESERVED 3 THE AUDIENCE OF MOBILE

MOBILE SEARCH TRENDS: DOMINATING SERPS WHILE VENTURING INTO APPS AND ANTICIPATORY SEARCH ©2014 EMARKETER INC. ALL RIGHTS RESERVED 2

CONTENTS2 Executive Summary

3 The Audience of Mobile Searchers

4 Mobile Search Benchmarks

9 Search in an App-Centric World

11 Looking Ahead: The Shift from Search to Service

12 eMarketer Interviews

13 Related eMarketer Reports

14 Related Links

14 Editorial and Production Contributors

EXECUTIVE SUMMARY

The growing population of mobile searchers,

coupled with changes made to algorithms and

advertising platforms, have forced marketers to

include mobile-specific tactics in their search engine

optimization (SEO) and search engine marketing

(SEM) strategies. But marketers need to brace

themselves for another wave of change: Consumers

are increasingly conducting vertical searches in

category-specific apps, not mobile search engines.

Several trends noted in an earlier eMarketer report, “State of Mobile Search 2013: Key Trends in Mobile SEO and SEM,” continue to hold true. For example, the mobile share of organic search traffic and paid clicks continues to tick upward. Also, the amount spent on mobile search advertising continues to grow at double-digit levels. Given these growth rates, 2015 will be the year mobile search reaches the tipping point—the stage at which the majority of spend, organic traffic and paid clicks comes from smartphones and tablets.

This report provides a consolidated view of US mobile search benchmarks. It includes data and insights on how consumers’ penchant for apps and adoption of anticipatory search services like Google Now are motivating marketers to focus on more than just their position in search engine results pages (SERPs).

KEY QUESTIONS ■ What percentage of organic search traffic and paid

clicks comes from mobile phones?

■ How have mobile cost-per-click (CPC) rates changed

over the past year?

■ How effective are mobile paid search ads?

■ In what ways does app usage affect mobile

search marketing?

millions

US Search Users and Mobile Phone Search Users, 2014 & 2018

2014

212.4

129.9

2018

228.3

201.1

Search users Mobile phone search users

Note: search users are not mutually exclusive; there is overlap betweengroupsSource: eMarketer, Aug 2014178227 www.eMarketer.com

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MOBILE SEARCH TRENDS: DOMINATING SERPS WHILE VENTURING INTO APPS AND ANTICIPATORY SEARCH ©2014 EMARKETER INC. ALL RIGHTS RESERVED 3

THE AUDIENCE OF MOBILE SEARCHERS

eMarketer estimates that 129.9 million US

consumers—40.7% of the US population—will use a

mobile phone to search the internet at least once per

month in 2014.

Several points help put these figures into perspective:

■ eMarketer projects that by the end of 2014, the

mobile phone search audience will represent 61% of

the total search audience in the US.

■ The number of US mobile phone searchers in 2014

will exceed the number of mobile Facebook users

by nearly 16%.

■ Two-and-a-half times as many people will conduct

a search on a mobile phone than use Twitter on

any device.

US Mobile Phone Search Users and Penetration, 2013-2018

Mobile phone search users (millions)

—% change

—% of mobile phone users

—% of population

2013

107.8

31.7%

43.6%

34.1%

2014

129.9

20.7%

51.4%

40.7%

2015

153.3

18.2%

59.6%

47.7%

2016

171.7

12.1%

65.7%

53.0%

2017

190.7

11.1%

72.1%

58.4%

2018

201.1

5.5%

75.0%

61.1%

Note: mobile phone users of any age who search on mobile phones at leastonce per month via mobile browser or applicationSource: eMarketer, Aug 2014178228 www.eMarketer.com

Including tablets in the mix increases the size of the mobile search audience further and diminishes the importance of desktop search going forward. eMarketer has yet to break out the number of US tablet searchers from the total US search user population, but survey data indicates search is a popular activity among tablet users. For example, of the 2,000 US tablet users Deloitte surveyed in July 2013, 45% used search engines on their device. In another poll conducted by the Donald W. Reynolds Journalism Institute (RJI) in Q1 2014, more than half of US tablet users spent 20 minutes or more browsing/searching the web with a tablet on a daily basis.

% of respondents in each group

Daily Time Spent with Mobile Content ActivitiesAccording to US Tablet Users, by Age, Q1 2014

18-34 35-54 55+

Browsed/searched the web

<5 minutes 1% 2% 7%

5-20 minutes 30% 45% 35%

20+ minutes 69% 53% 58%

Interacted with social media

<5 minutes 3% 9% 10%

5-20 minutes 29% 41% 44%

20+ minutes 68% 50% 46%

Watched movies, TV programs or other video

<5 minutes 0% 10% 8%

5-20 minutes 15% 31% 30%

20+ minutes 85% 59% 62%

Played games

<5 minutes 2% 11% 0%

5-20 minutes 30% 39% 26%

20+ minutes 67% 50% 74%

Total

3%

38%

59%

7%

38%

55%

6%

25%

69%

5%

32%

63%

Note: large tablets only, excludes mini tablets; of those who conductedeach activity within the past 7 days, time spent on a typical daySource: Donald W. Reynolds Journalism Institute (RJI), "Mobile Media NewsConsumption Survey," July 17, 2014177872 www.eMarketer.com

Conservatively speaking, assuming half of the 147.1 million US adult tablet users regularly conduct searches on their device, the tablet searcher population would comprise 73.6 million US consumers.

Taken together with the number of mobile phone searchers, the total audience of mobile searchers is too big to ignore. It’s critical for marketers to move beyond the test-and-learn phase of mobile search. Those delaying investments are leaving themselves vulnerable to competitors with sophisticated mobile initiatives already in place.

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MOBILE SEARCH BENCHMARKS

Research indicates the mobile tipping point for search

marketing will occur in 2015. Mobile will come to

dominate nearly all key search metrics—share of

organic traffic, paid clicks and search ad spending.

Return on investment (ROI) is the one exception.

Mobile is gaining ground in this area, but not as

quickly as many marketers would like.

One-third of US internet traffic in Q3 2014 came from mobile devices, up from roughly 21% a year earlier, according to StatCounter. US ecommerce sites analyzed by predictive analytics platform provider Custora in early 2014 had an even higher mobile share, at 37%. And locally-focused businesses like YP (the new yellowpages.com) are quickly approaching the mobile tipping point. “Mobile is in the process of passing the 50% mark of total usage of YP,” said David Lebow, chief revenue officer at local marketing solutions provider YP.

Hand-in-hand with this growth, organic and paid search grew increasingly “mobile” over the past year. The data that follows show just how large a role smartphones and tablets are playing in search as a whole, and where mobile search is headed in 2015.

ORGANIC SEARCH (SEO) By the end of Q3 2014, roughly one in three organic searches came through a smartphone or tablet. This milestone was noted by multiple search marketing agencies that track and analyze search data among their clients.

■ RKG reported smartphones and tablets generated

38% of organic search traffic in the US in Q3 2014,

up from 27% a year prior.

■ BrightEdge found that 23% of organic searches

worldwide in April 2014 came from smartphones, up

from roughly 10% a year earlier. Meanwhile, tablets

comprised 12% of the search volume, bringing

mobile’s total to 35% for the month.

■ And according to Covario’s SEO manager Michael

Martin, mobile’s share of organic search had grown

to 40% for most of the agency’s US clients. Some,

particularly those in the retail and financial services

sectors, were already seeing a 50-50 split between

mobile and desktop.

Holding true to the past, Apple and Google have continued to play key—albeit differing—roles in mobile search. Apple’s mobile devices generated a majority share of organic traffic in 2014, as they have in previous years. For example, RKG reported two-thirds of its clients’ organic mobile traffic in Q3 came from iPhones and iPads. And according to Adobe’s “US Mobile Benchmarks” report, Apple’s Safari browser drove more mobile internet traffic between December 2013 and April 2014 than all other mobile browsers combined. Chrome chipped away at Safari’s share over the period but Apple’s browser still drove the majority of traffic (59.1%).

As for Google, it has remained unchallenged as the leading mobile search engine. Three years’ worth of data from analytics service StatCounter, which tracks more than 15 billion hits per month on its 3 million member sites, underscores that point. Google has generated at least 85% of mobile referrals since 2011. Time and consumers’ growing interest in Yahoo and Bing have whittled away at Google’s share, but not substantially.

% of total mobile search referralsUS Mobile Search Referral Share, Q1 2011-Q3 2014

Google Yahoo Bing Other*

Q1 2011 95.3% 3.1% 1.3% 0.3%

Q2 2011 95.4% 3.3% 1.2% 0.2%

Q3 2011 95.2% 3.3% 1.3% 0.2%

Q4 2011 94.9% 3.5% 1.5% 0.2%

Q1 2012 94.4% 3.9% 1.5% 0.3%

Q2 2012 93.9% 4.3% 1.5% 0.3%

Q3 2012 93.8% 4.4% 1.6% 0.3%

Q4 2012 91.0% 6.4% 2.3% 0.3%

Q1 2013 88.4% 8.6% 2.7% 0.3%

Q2 2013 84.5% 10.8% 4.4% 0.3%

Q3 2013 86.5% 9.3% 4.0% 0.3%

Q4 2013 88.5% 7.8% 3.3% 0.3%

Q1 2014 88.7% 7.7% 3.4% 0.3%

Q2 2014 87.8% 8.2% 3.6% 0.4%

Q3 2014 85.6% 9.7% 4.3% 0.3%

Note: excludes tablets; numbers may not add up to 100% due to rounding;*Ask.com, WebCrawler, DuckDuckGo, Baidu, etc.Source: StatCounter, "Global Stats"; eMarketer calculations, Oct 2014155357 www.eMarketer.com

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Bing is posed to get a bump in share going forward as Apple now uses Microsoft’s search functionality for Siri and Spotlight search in iOS 8. But since Safari commands such a significant lead among mobile browsers and Google is its default search function, the largest volume of organic traffic will continue to come from Google.

Just as Google continues to be the dominant search engine, text-based queries continue to be the most common search method, despite consumer interest in voice search features on their mobile devices. In an October 2014 survey conducted by mobile advertising platform provider Supersonic, 57.5% of US smartphone app users, the bulk of whom were younger than 35, said they used a voice search service like Siri at least once per week.

Consulting firm Northstar conducted a similar poll in September 2014 on behalf of Google and found the use of voice services was even more prevalent: 41% of the US adults and 55% of the teens said they used voice search services like Siri more than once per day. However, Northstar’s survey showed the most common use cases among adults involved asking for directions, dictating texts and calling someone. Such uses are not generating a significant volume of search queries as a result.

PAID SEARCH (SEM) The key trends in mobile paid search boil down to increases in three areas: adoption, competition and performance.

Over the past 18 months, consumers have grown more comfortable with using smartphones and tablets for search, and so too have advertisers. The launch of Google’s Enhanced Campaigns in July 2013 forced all advertisers to serve ads to tablets as they are included in the desktop bid. It also compelled advertisers to at least consider extending campaigns to mobile phones by setting a mobile bid adjustment, which enables advertisers to bid more or less competitively for searches that occur on mobile phones. Campaign results have been mixed as advertisers new to mobile gained experience and those who had ventured into mobile prior to Enhanced Campaigns learned to navigate the new platform. But taken as a whole, performance has steadily improved.

Following are estimates and observations from multiple search marketing firms that attest to the growth in mobile paid search across three key areas.

Click and Spend Share: Passed 30%, Headed to 50% It’s not often that data from multiple sources aligns closely, but in the case of mobile’s click and spend share, search marketing agencies and ad management platforms reported similar figures. Unless otherwise noted, the figures below represent mobile click share and mobile spend share among the source’s US clients.

Mobile Click Share

Kenshoo: 36% of clicks in Q3 2014 came from smartphones and tablets, up from 26% in Q3 2013.

The Search Agency: 32.2% of total paid search clicks on Google came from smartphones and tablets in Q2 2014, and in Q3, 58% of clicks on Google Shopping ads—formerly known as Product Listing Ads (PLAs)—came from smartphones and tablets. The latter is a sign consumers are growing more comfortable with shopping on mobile devices.

RKG: In Q3 2014, 38% of paid clicks in North America came from smartphones and tablets, with the two devices comprising a near equal share, at 20% and 18%, respectively.

Marin Software: Smartphone and tablet users generated 37.7% of paid clicks worldwide in Q3 2014. According to Brian Lee, market research analyst at Marin Software, that share is expected to increase to 42% by the end of this year.

Given the pace at which the mobile click share is expanding, Lee projects smartphones and tablets will account for 50% of all paid search clicks in 2015.

Mobile Spend Share

Marin Software: 42.5% of search budgets worldwide in Q3 2014 was spent on smartphone and tablet ads, up 7.6% compared with Q3 2013.

Kenshoo: 32% of total search dollars was spent on mobile devices in Q3 2014, up 9 percentage points from the prior year.

RKG: 28% of paid search budgets in North America was allocated to smartphone and tablet ads in Q3. Tablets garnered roughly two-thirds of the mobile spend as tablet conversion rates continued to outpace smartphone rates.

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The Search Agency: 29% of search spending in Q2 2014 was allocated to mobile devices with 15.5% spent on smartphones and 13.5% on tablets.

Adobe: 29.6% was spent on smartphones and tablets in June 2014, up from 22.9% in August 2013.

IgnitionOne: 33% of total paid search was spent on smartphones and tablets by the end of Q3 2014, up from 18.5% the previous quarter.

Taking the entire US market into account, eMarketer estimates mobile will comprise 38.1% of all digital search ad spending this year. That percentage is expected to top the 50% mark in 2015, at which point mobile search spending will total $12.85 billion and exceed desktop search spending for the first time.

billions and % of digital search ad spending*US Mobile Search Ad Spending, 2013-2018

2013

$4.92

24.7%

2014

$8.72

38.1%

2015

$12.85

50.1%

2016

$17.87

62.9%

2017

$21.73

70.5%

2018

$25.69

76.7%

Mobile search ad spending % of digital search ad spending*

Note: includes advertising on search engines, search applications andcarrier portals; ad spending on tablets is included; *includes contextualtext links, paid inclusion, paid listings (paid search) and SEOSource: eMarketer, Sep 2014178477 www.eMarketer.com

Cost Per Click: Mobile CPCs Continue to Fluctuate, Still Trail Desktop The launch of Google’s Enhanced Campaigns had many worried CPCs would skyrocket. Yet, with a year of Enhanced Campaigns under advertisers’ belts, the consensus is the concern was unwarranted.

“I won’t lie, I had a blog post written up about how Enhanced Campaigns was a transparent ploy to increase mobile CPCs, and as soon as that spike hit, I was going to hit ‘post,’” said Jeremy Hull, director of bought media at digital marketing agency iProspect. “But that spike never came.”

Multiple sources reported mobile CPCs either held steady or dropped between 2013 and 2014.

For example, Kenshoo’s year-over-year comparison of CPCs from Q3 2013 and Q3 2014 showed little change in the rates US marketers paid for clicks on smartphones and tablets. As one would expect, the rates fluctuated quarter by quarter, with tablet CPCs generally trending higher than smartphone CPCs. However, it’s worth noting that smartphone rates surpassed those on tablets in Q3 2013 and they were near equal in Q3 2014, which Kenshoo contends is a sign marketers are getting more knowledgeable about setting goals for mobile phones and measuring performance against those goals.

In Q2, RKG found smartphone CPCs in North America were 12% lower compared with the same quarter in the prior year. They were 59% lower than desktop rates in Q3 2014.

IgnitionOne also found that CPCs for smartphone and tablet ads served through its platform in the US in 2014 were 9% and 3% lower, respectively, compared with 2013 rates.

Raj Kapoor, senior director of mobile and local search monetization at Microsoft, reported a slight decline as well: Mobile CPCs across the Bing ad marketplace declined roughly 5% over the course of the year, he said.

The obvious yet most significant factor driving CPCs down is rooted in the theory of supply and demand. “The supply of mobile searches is outpacing demand on the marketing side right now, so we’ve seen our CPCs decline year over year,” said Ryan Fitzgerald, co-founder of digital marketing firm Net Conversion.

Advertisers “playing it safe” with Enhanced Campaigns served as another downward force on click rates, according to iPropect’s Hull. “The folks that were not active in mobile last year were caught by surprise with Enhanced Campaigns and they tended to opt out of mobile,” he said. “The folks that were familiar with mobile were worried that the increased competition [created by Enhanced Campaigns] would drive CPCs up, so they bid conservatively.”

Mobile CPC rates dipped over the holidays as a result, Hull added. But since then they’ve ticked steadily upward. “Brands are learning how to strategically speak to their mobile consumer and they’re getting better at measuring their success. So the competition is picking up,” he said.

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Viji Davis, vice president of marketing at digital marketing agency Resolution Media, agreed. “Mobile CPCs have been fluctuating, but in the past six months they’ve been on the rise. There’s more ad types on mobile, there’s more consumption on mobile and more people competing to have ads in top spots now,” she said.

Q3 2014 data from The Search Agency shows the effect increased competition is having on mobile CPCs. Smartphone and tablet CPCs increased 6% and 4%, respectively, compared with the same quarter in the prior year.

Competition can be particularly fierce in the mobile local search advertising arena. Within that space, mobile rates have been on the rise as well. YP’s Lebow said that his company has seen steady month-over-month increases in mobile rates this year.

One reason is digital agencies like DAC Group often see higher conversion rates for mobile local search ads compared with the desktop. “We’re maxing out the mobile space before we max out the desktop space because we see higher conversion rates on mobile, especially call conversions,” said Scott Ensign, vice president of search marketing at DAC Group. Such a strategy is fuel for increasing mobile bids and ultimately CPCs.

Whether slightly up or down, mobile CPCs as a whole remain below desktop averages. Data from Marin Software showed smartphone CPCs in the US in 2013 averaged 58 cents, 30% less than desktop’s average of 83 cents. Tablet rates were also below desktop norms, but not by much: Tablet CPCs averaged 76 cents last year, 8% below the desktop average. Marin’s Lee confirmed that while the CPC rates changed somewhat in 2014, the relationship between mobile and desktop rates has not shifted dramatically.

Microsoft’s Kapoor agreed: “Although CPCs can vary quite a bit by category, CPCs for tablets tend to be closer to PC CPCs, and smartphone CPCs are 30% lower than PC CPCs.”

Performance: Improving, but Measurement Is Still Murky Evaluating the performance of mobile search ads is a tricky endeavor as it’s heavily influenced by the metric used. For example, CTRs and conversion rates tell two very different stories.

On the surface, consumers appear to click on search ads at a higher rate when they’re using a smartphone vs. a tablet or traditional computer. According to Marin Software’s analysis, smartphone CTRs in 2013 averaged nearly 3.8% compared with 2.7% for tablets and 2.3% for desktop.

US Paid Search Metrics, by Device, 2013

Smartphone Tablet Computer

Clickthrough rate 3.75% 2.70% 2.29%

Cost per click $0.58 $0.76 $0.83

Cost per click change* 20.8% 22.6% 10.7%

Conversion rate 4.4% 5.5% 5.3%

Note: represents activity on Marin Software's network, broader industrymetrics may vary; *vs. prior yearSource: Marin Software, "Mobile Search Advertising Around The Globe:2014 Annual Report," March 19, 2014171611 www.eMarketer.com

However, smartphones have an inherent advantage when it comes to CTRs. Up to five highly visible ads are typically served to phones, whereas tablets and traditional computers can have far more ads, many of which are hidden below the fold.

Therefore, it’s worth looking at how CTRs across devices compared by ad position. Marin Software found ads served in the first or second position performed equally as well across all devices—5.2% CTR for smartphones, 5.1% for tablets and 5.0% for traditional computers. Moving down the line, the differences between device CTRs were not substantial in any one ad slot, which indicates ad position and not the device type has a greater influence on performance.

Ultimately, what matters to search marketers is conversion, which for many equates to sales. Using this lens, ads served to tablets in 2013 performed just as well as those on the desktop—5.5% conversion on tablets, 5.3% conversion on desktop—according to Marin Software’s analysis. Conversion rates of 4.4% for smartphone ads paled in comparison. However, that average was a 57% increase from the prior year, a signal that businesses are creating mobile experiences that better enable consumers to complete the action they are prompted to start by clicking on a search ad.

RKG’s Q3 analysis of data and estimates from Google’s conversion tracking tool showed the new cross-device tracking capabilities attributed 17% more conversions to smartphone search ads specifically. In the absence of this tracking capability, these conversions would have been attributed to investments in other media.

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Although tools like these help marketers measure the digital ROI of mobile search, most are still concerned about their inability to accurately measure the percentage of in-store sales that are driven by smartphone search ads.

Another annoyance lies in the inability to optimize campaigns for tablet users. RKG found that tablet ads contributed just 73% of the revenue of desktop ads in Q3 2014. The agency contends Android tablets are weighing down overall revenues for tablets. The revenue-per-click (RPC) for the best-performing Android tablets in Q3 was 44% of desktop ads, according to RKG. Meanwhile, iPad RPC was 91% relative to desktop.

Such findings fuel marketers’ frustrations with the limitations of Google’s Enhanced Campaigns. Google’s analytics tool enables advertisers to understand how tablet performance compares with desktop, but marketers are unable to adjust their tablet spending.

That’s not the case on Microsoft’s Bing. “Advertisers can lower their tablet bids by up to 20% if they are underperforming,” Kapoor said. Alternatively, “we allow bid modifiers up to plus-300% so advertisers can really create a campaign that is much more optimized for tablets.”

On the whole, CTRs are strong and conversion rates are improving, particularly for smartphones. But the challenges marketers face in gauging the ROI of mobile search are still significant. In light of these obstacles, it’s not surprising that nearly two-thirds of global marketers polled by Kenshoo in Q2 2014 said mobile search underperformed compared with desktop search campaigns. Such opinions are not likely to change until mobile performance measurement, particularly in relation to the impact on sales in physical stores, gets more precise.

% of respondents

Performance of Mobile vs. Desktop Paid SearchAccording to Search Marketers Worldwide, Q2 2014

Mobile performs muchbetter than desktop

2%

Mobile performs slightly better than desktop20%

Mobile performs aboutthe same as desktop

14%

Mobile performs slightly worse than desktop27%

Mobile performs much worse than desktop37%

Note: n=85Source: Kenshoo, "Enhanced Campaigns: One Year Later," July 22, 2014177182 www.eMarketer.com

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SEARCH IN AN APP-CENTRIC WORLD

App usage is altering consumer search patterns and

in some ways diminishing the need for consumers

to search at all. So, keeping pace requires marketers

to look beyond search engines to the places mobile

users conduct the majority of mobile activities—

in apps.

It’s easy to point to the exorbitant amount of time consumers spend in apps as a reason why search marketers should look beyond search engines. comScore reported that in June 2014, smartphone users polled spent 88% of their time using mobile apps compared with 12% of time using mobile browsers. Tablets saw a similar breakdown of time spent: 82% for apps and 18% for browsers.

Smartphone Tablet

% of total

Share of Time Spent with Mobile Apps vs. Mobile WebAmong US Smartphone and Tablet Users, June 2014

App88%

Browser12%

App82%

Browser18%

Note: ages 18+Source: comScore, "The US Mobile App Report," Aug 21, 2014178864 www.eMarketer.com

For search marketers, this data is not terribly motivating because search engine apps are accounted for in the app time total. Also, the app share is skewed heavily by the time consumers spend with a handful of leading apps, namely Facebook, Pandora and YouTube.

The most compelling insight for search marketers comes from three consumer studies. First, in Supersonic’s October 2014 survey, one-third of the US smartphone app users said they preferred to search in a specific app like Yelp or KAYAK than use a mobile browser.

Second, a November 2013 survey conducted by Nielsen on behalf of Google found that one in four US smartphone owners began searching for product information in a branded app as opposed to a search engine.

% of respondents

Types of Mobile Sites or Apps on Which USSmartphone Owners Begin Researching Products,Nov 2013

Search engines 48%

Branded websites 33%

Branded apps 26%

Note: ages 18+Source: Google, "Mobile Path to Purchase" conducted by Nielsen, Nov 2,2013168295 www.eMarketer.com

Third, Q3 2013 polling from BIA/Kelsey found that 16.7% of US non-Hispanic internet users said they used apps as often as search engines for local shopping and 9.4% mostly used apps. The percentage that mostly used apps was even higher among Hispanic internet users (16.5%).

Hispanic Non-Hispanic

% of respondents

Search Engine vs. App Usage for Local Shopping by USHispanic and Non-Hispanic Internet Users, Q3 2013

Mostly use search engines60.5%

Mostly use apps 16.5%

Bothequally16.4%

Not sure6.6%

Mostly use search engines68.6%

Mostly use apps9.4%

Bothequally16.7%

Not sure5.3%

Source: BIA/Kelsey, "Consumer Commerce Monitor (CCM): HispanicConsumers Buy into Digital for Local Shopping," Feb 25, 2014170024 www.eMarketer.com

The app findings in all three surveys paled in comparison to the search engine shares, but any research that suggests 10% to 33% of mobile users are searching in apps first, or in apps only, should be a wake-up call for many marketers.

With the importance of apps growing, search marketers are adding tasks to their to-do lists, including app store search optimization on the organic side, and in-app vertical search advertising on the paid side.

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APP STORE SEARCH OPTIMIZATION (ASO) In Adobe’s 2014 “US Mobile Benchmark” report, half of the companies surveyed said they had between one and 10 apps available for download. With a significant number of businesses investing to build native apps and the total number of apps in Google Play and the Apple App Store ballooning over the past year, a growing number of search marketers are employing app store search optimization techniques to increase the likelihood of their apps being found organically.

App store optimization (ASO) is a relatively new, fairly basic technique designed to lift an app’s position in app store rankings and search results. The following areas hold sway over search results within the App Store and Google Play:

Apple App Store

■ Title field

■ Keyword field

■ Review ratings

Google Play

■ Title field

■ Keyword field

■ Description

■ Review rating

■ Review language

■ Rank on Google’s mobile SERP

■ Google+ standing

“It’s a lot of block-and-tackle-type stuff,” said Dave McAnally, director of content solutions at Resolution Media. “I liken it to the way optimization worked six years ago on web search.”

Although techniques are basic, there are pitfalls to avoid. One mistake businesses make, McAnally said, is launching an app and then letting it sit for six months or more without an update. “Both app stores show you what apps have had updates since you last visited, so a quick way to keep your brand top of mind is to have a routine update schedule.”

Another pitfall to avoid is including just one screen shot with the app description when the app store allows for more. “If you put one screen shot of your app when you can actually have four in there, that’s just real estate you’re leaving on the table,” he said.

VERTICAL SEARCH ADVERTISING A March 2014 survey by Forrester Consulting found that significant numbers of smartphone owners used apps in categories that have historically generated a high volume of search engine queries. Close to half of those polled used apps for navigation/mapping (47%) and for finance and banking purposes (42%). One-third used retail apps, one-fourth used apps for comparison shopping and 15% used travel apps.

With category-specific apps on deck, the vertical search behavior that has long been a part of the desktop world has moved to mobile in app form. “It’s a world of generalists and specialists,” YP’s Lebow said. “Our belief is that consumers want both. People are going to go to multiple sources to search—a specialist and a generalist.”

So, when search marketers and agencies are looking to gain as much visibility as possible, they not only optimize for—and advertise on—the leading search engines, they invest in search ads offered by category-specific apps as well.

“When we’re working with brands that are looking to conquest as much as possible with regard to visibility, we look across vertical search engines in apps—the Trip Advisors, the Yelps. We even look at what makes a certain hotel rank within Expedia when somebody does a search there,” said Doug Platts, vice president of search strategy at iCrossing. “It’s becoming an important aspect [of mobile search].”

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The primary challenge around employing such vertical search tactics is the highly fragmented and transient nature of app usage. “Brands are having a hard time figuring out what to do with apps because people download them, but a high percentage of apps are only opened once,” iProspect’s Hull said. “There’s value there but outside of the core leaders, there’s nothing that’s really huge [in terms of audience size]. The space is still very fragmented.”

Taken as a whole, however, eMarketer sees the pattern of search spending in category-specific apps chipping away at Google’s share of mobile search revenue. eMarketer projects almost 25% of US mobile search revenue in 2014 will be generated by companies in the “other” category, which includes many category-specific apps. In 2016, the revenue share for this group will near 30%.

% change and % of total mobile search ad spending

Net US Mobile Internet Search Ad Revenues, byCompany, 2013-2016

2013 2014 2015 2016

% change

Yelp 311.0% 104.9% 85.8% 62.3%

Google 82.5% 75.0% 44.1% 34.0%

YP 50.0% 35.0% 25.0% 20.0%

Other 525.4% 95.7% 59.6% 53.8%

Total 114.1% 77.2% 47.4% 39.1%

% of total mobile search ad spending

Google 68.9% 68.0% 66.5% 64.1%

YP 7.7% 5.9% 5.0% 4.3%

Yelp 1.0% 1.4% 1.8% 2.1%

Other 22.4% 24.7% 26.8% 29.6%

Note: net ad revenues after companies pay traffic acquisition costs (TAC);includes advertising on search engines, search applications and carrierportals; ad spending on tablets is included; excludes SMS, MMS and P2Pmessaging-based advertisingSource: company reports; eMarketer, Sep 2014178491 www.eMarketer.com

LOOKING AHEAD: THE SHIFT FROM SEARCH TO SERVICE

Another significant shift is under way. The cause:

Consumers growing accustomed to apps anticipating

their needs and pushing information that is

personally and contextually relevant. The effect: The

need to proactively search diminishes—somewhat.

Targeted searches will never go away and neither will search engines. However, as the knowledge graph gets more intelligent, mobile app capabilities improve, smartphones get smarter with a wider array of sensors and wearable device adoption takes off, more information will be served up rather than sought after. In fact, signs of this change are already apparent.

Take local searches for example: YP’s app automatically serves up local businesses and coupons users might like based on their location and preferences. Google Now offers a similar service with its Places card and Microsoft’s Cortana alerts users to events (and more) within their immediate vicinity.

Listings like these are not produced as a result of a query but rather knowledge of a device’s location and users’ inferred interests based on a number of signals, including preferences set by individual users and their previous search history.

Without keyword-infused queries to serve ads against, little opportunity currently exists for paid search advertising in such anticipatory search services. “Google Now and Cortana are still trying to get their heads around what the paid opportunity should be there,” Hull said.

The big opportunity lies on the organic side. “This is one of the most exciting things about mobile search optimization, because it really allows businesses to think about what makes sense for their users,” said Bryson Meunier, SEO director for online ticket marketplace Vivid Seats. “If you’re a local business, you can really start to optimize in a way that you have never been able to optimize before.”

There are a number of things a business can do to increase its visibility organically in anticipatory search channels.

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Using Google Now as an example, Meunier pointed out that a local business can increase the volume of searches that are conducted within its brick-and-mortar location to let Google know its business is popular with locals and worthy of listing. One approach Meunier offered is for the business to add signage with a QR code that will link the mobile user to a search results page to increase search traffic from inside the store.

Google Now’s listings, according to DAC Group’s Ensign, are also based on the confidence the algorithm has in the information it’s finding. “A halo of local content and reviews are going to help. If there’s a lot of chatter on the internet about this place and what’s going on there, that’s going to increase your chances of showing up in Google Now,” Ensign said.

There are technical considerations as well. “The way Google is going with search in general, it’s about things, not just strings,” Ensign said. In other words, the search engines for Google Now are looking for micro-data that puts the content on a webpage into real-world context. Take an event page for example: SEOs can use schema markup (micro-data) to inform Google Now the event page is also related to a physical location and perhaps other events that have taken place in that location. Doing so can increase the page’s visibility in Google Now.

The problem—or opportunity—is most SEOs are not thinking about optimizing for anticipatory search yet. “But that’s the best reason to do it,” Meunier said. “You can be an early adopter and get in on the ground floor. Waiting until next year might be too late, especially for local businesses.”

However, as iCrossing’s Platts pointed out, it’s difficult for businesses to pursue the shiny new thing when significant opportunities still exist in organic and paid mobile search. Still, he said, “It’s important for brands to think ahead, be innovative and be willing to try—and possibly fail—in order to learn and succeed the next time.”

EMARKETER INTERVIEWS

In-Store Mobile Search: Your Web Search Strategy and Tactics Won’t Cut It

Pete Coleman Executive Vice President and General Manager for StoreMode Solution

Point Inside

Interview conducted on September 15, 2014

Yellow Pages Brands Itself as Mobile-First

David Lebow Chief Revenue Officer

YP Interview conducted on October, 1, 2014

Google on the Challenges of Search and the Always-On Consumer

Jason Spero Vice President, Performance Media

Google Interview conducted on October 17, 2014

Viji Davis Vice President, Marketing

Resolution Media Interview conducted on October 9, 2014

Mark Elfenbein President, CEO and Board Member

Slyce Interview conducted on August 1, 2014

Scott Ensign Vice President, Search Marketing

DAC Group Interview conducted on October 3, 2014

Ryan Fitzgerald Co-Founder

Net Conversion Interview conducted on October 1, 2014

Brad Folkens Co-Founder and Chief Technology Officer

Image Searcher Interview conducted on July 28, 2014

Brent Hieggelke CMO

Urban Airship Interview conducted on September 5, 2014

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Jeremy Hull Director, Bought Media

iProspect Interview conducted on September 24, 2014

Brian Lee Market Research Analyst

Marin Software Interview conducted on October 10, 2014

Michael Martin SEO Manager

Covario Interview conducted on October 2, 2014

Dominik Mazur Co-Founder and CEO

Image Searcher Interview conducted on July 28, 2014

Dave McAnally Director, Content Solutions

Resolution Media Interview conducted on October 9, 2014

Bryson Meunier SEO Director

VividSeats Interview conducted on October 2, 2014

John Milinovich CEO

URX Interview conducted on September 5, 2014

Doug Platts Vice President, Search Strategy

iCrossing Interview conducted on October 3, 2014

Marcos Sanchez Vice President, Global Corporate Communications

App Annie Interview conducted on October 1, 2015

Marcus Tober Founder and Chief Technology Officer

Searchmetrics Interview conducted on September 25, 2014

Frank Vertolli Co-Founder

Net Conversion Interview conducted on October 1, 2014

Roy Chomko President

Adage Technologies Interview conducted on September 26, 2014

Corey Gault Director, Communications

Urban Airship Interview conducted on September 5, 2014

Raj Kapoor Senior Director, Mobile and Local Search Monetization

Microsoft Interview conducted on October 15, 2014

Greg Kunkel Director, Corporate Communications

Marin Software Interview conducted on October 10, 2014

Gil Shoham Co-Founder and CEO

Supersonic Interview conducted on September 22, 2014

Jim Yu CEO and Founder

BrightEdge Interview conducted on September 5, 2014

RELATED EMARKETER REPORTS

Desktop Search 2014: Marketers Find a Balance with Mobile

Product Listing Ads: Google Dives into Comparison Shopping

State of Mobile Search 2013: Key Trends in Mobile SEO and SEM

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RELATED LINKS

Adobe

BrightEdge

BIA/Kelsey

comScore

Custora

Deloitte

Donald W. Reynolds Journalism Institute (RJI)

Forrester Research

Google

IgnitionOne

Kenshoo

Marin Software

Nielsen

RKG

StatCounter

Supersonic

The Search Agency

EDITORIAL AND PRODUCTION CONTRIBUTORS

Cliff Annicelli Managing Editor, ReportsBen Clague Chart Data SpecialistJoanne DiCamillo Senior Production ArtistNoah Elkin Executive EditorStephanie Meyer Senior Production ArtistDana Hill Director of ProductionKris Oser Deputy Editorial DirectorEzra Palmer Editorial DirectorHeather Price Senior Copy EditorKatharine Ulrich Copy Editor

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