Mobile ads worth ‘less than half’ desktop ones, says new study

But pay-per-click is still a soaring business

New research from San Francisco startup Marin Software suggests search advertising is proving less profitable as people increasingly use smartphones and tablets to browse the web. Marin’s data indicates the price firms like Google can charge companies in the UK for mobile promotions is less than half that for a desktop ad. On average a desktop click commands 32 pence but on a mobile it falls to around 15 pence. Tablet ads are worth roughly 28 pence per click.
Marin contends that nearly a fifth of search clicks are now registered through smartphones and tablets, up from nine per cent at the start of 2012.
Google has itself acknowledged the shift to mobiles is a problem, with its third-quarter results revealing that the average amount it charges per click had fallen 15 per cent year-on-year. It’s a development, along with the cost of acquiring Motorola, that has seen Google’s shares fall by nine per cent in recent months.
But on a brighter note Marin reveals how Britain is ahead of its European counterparts in mobile web browsing where 19 per cent of search ad clicks emanates from mobiles compared to just 10 per cent in the EU.
Every day Marin monitors more than 3 billion keywords for some 1,800 clients, determining when to bid higher or when to back off in order to maximise their revenues.
Since its founding in 2006 it has reaped the benefits of the growing online advertising industry where, this year alone, advertisers are expected to spend $90 billion on online ads – with that figure calculated to be growing at a rate of 15 per cent to 20 per cent annually.
Marin’s own clients already represent more than $4 billion in annual online ad spending with the company reporting revenue of $36 million last year and on track for over $50 million in 2012.
The company also has plans to float in 2013.