Google set to generate billions in search ad revenue from tablets in 2013

by David Needle

February 12 2013

Report says tablet search ad conversion rates are set to eclipse desktops in 2013. (Graphic: Marin Software)
Report says tablet search ad conversion rates are set to eclipse desktops in 2013. (Graphic: Marin Software)

Google could achieve record-breaking ad revenue this year from paid search ads sent to tablet users.

That’s the assertion in a new report by Marin Software, a company that helps advertisers buy Web-search ads.

Marin says tablets will drive 20% of Google’s paid search ad clicks in the U.S. by December, 2013, up from 10.7% in December, 2012. The report cites a Cowen and Company estimate that Google will realize $9.9 billion in mobile ad revenue in 2013 (up from $5.8 billion last year).

The main reason for the growth is consumer’s increasing use of tablets to buy products and services online as well as research items they’re thinking of buying.

Marin predicts the conversion rate of search ads originating from tablets will pass those of desktops before the end of this year.

Google announced a change to its ad system last week, now requiring advertisers to pay for ads on tablets even if they just want to reach personal computer users. In a blog post announcing the change Google said it made the move because “... as devices converge, consumer behaviors on tablets and desktops are becoming very similar.”

The forecast follows what Marin already estimates was solid growth. For 2012, the company estimates the share of overall paid search clicks served by Google on tablets increased from 6% to 10.7%.  Now it’s projecting tablet’s share will double by the end of this year.

Conversely, Marin Software says that while conversion rates on search clicks originating from tablets increased dramatically in 2012, up 31%, the conversion rate on smartphones increased just 9% and desktops just 7%.

“While the rise of tablets is no secret, what’s interesting is tablet users are engaging with search ads and converting in ways that closely resemble desktop usage,” said Matt Lawson, VP of Marketing and Partnerships at Marin Software in a release. “Solid user engagement combined with favorable performance characteristics make search ads on tablets hard to resist for advertisers.”

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