Merkle (merkleinc.com), a leading technology-enabled, data-driven performance marketing agency, announced the release of its Q1 2016 Digital Marketing Report today. The report includes insights on how Google search advertisements, including Product Listing Ads (PLAs), continue to deliver strong performance; observations around the fall in ad spending on Yahoo’s Gemini and Bing Ad platforms; and reporting on the impact of Google’s recent ad layout changes.

The report analyzes trends in paid search, SEO, social media, product ads, programmatic and display advertising, comparison shopping engines, and more. It provides comprehensive and detailed insights into digital marketing trends using data from Merkle’s vast client base.

Google search ads continue to deliver strong performance in Q1 2016

Spending on Google’s paid search ads rose 25% YOY in Q1 2016, as clicks increased 33% and cost per click (CPC) fell 6%. The strong performance can be attributed to the renewed wave of mobile growth that kicked off in late 2015, which remains the key driver of Google trends. In Q3 2015, Google began showing more ads at the top of phone results, helpings its rate of mobile click growth more than double.

Google Shopping Ads (PLAs) have been another bright spot for Google with growth significantly outpacing text ads. The removal of text ads from the right-hand side of desktop search results, and the showing of four text ads at the top of the page, appears to have impacted organic and paid search minimally.

Yahoo search ad spending continues to fall

As Yahoo weighs a potential sale of all or part of its business, we see search ad spend falling across its Gemini and the Bing Ads platforms that still power the majority of Yahoo’s search ads. Year-over-year growth numbers for these properties are no longer benefitting from the one-time traffic boost they received in late 2014 from Yahoo becoming the default search provider for the FireFox browser.

Other notable Q1 2016 highlights include:

Paid Search

• Google Shopping Ads spending was up 41%, while text ad spending increased 13%.
• Advertiser spending across Bing Ads and Yahoo Gemini combined was down 10% Y/Y, with clicks falling 14% and CPCs rising 4%. The two platforms have seen their share of paid search clicks fall 4% overall in the past year and 9% on phones.
• Phones and tablets produced 53% of total paid search clicks and 57% of Google paid search clicks in Q1. Phone click share increased by 15 points from Q1 2015 to Q1 2016, while tablet click share is down by four points over the same period.
• Google PLAs accounted for 43% of Google search ad clicks within the retail industry, and 70% of non-brand clicks. PLA traffic from Google search partners was up 545% Y/Y, while PLA clicks on phones were up 162% Y/Y.
• Yahoo Gemini produced 17% of the combined clicks across Bing and Yahoo’s two search platforms at the end of Q1, in line with its share the previous quarter. Though originally launched as a mobile platform, 56% of Gemini clicks were on desktop in Q1.

Organic Search & Social

• Organic search visits were down 7% Y/Y in Q1 as increased monetization of mobile results is pushing more traffic to paid listings. While mobile traffic share has been flat for organic search in the past year, it is up 10 points for paid search.
• Despite significantly ramping up mobile ad volume through additional inventory, Google’s share of mobile organic search visits increased from 87% to 89% from Q1 2015 to Q1 2016 as its competitors saw larger declines in mobile.
• Overall, Google has gained one point of organic search visit share in the last year, as Yahoo lost one point and Bing’s share was stable.
• Social media sites produced 3.1% of site visits in Q1, with Facebook accounting for 62% of all visits driven by social media.

Comparison Shopping Engines

• Connexity and the eBay Commerce Network commanded 96% of all comparison shopping engine (CSE) spending in Q1. This follows Connexity’s acquisition of PriceGrabber in mid-2015 and the shuttering of Amazon Product Ads in Q4 2015.

• Connexity and the eBay Commerce Network drove just 8% and 5% as much revenue for advertisers, respectively, as Google Shopping Ads (PLAs) did in Q1, among brands advertising across all three platforms.

Display Advertising

• Spending on Facebook ads increased 38% Y/Y in Q1 2016, a slight deceleration from 44% growth the prior quarter. Average CPC was 21% lower Y/Y, similar to Q4 results.

The Google Display Network accounted for 12% of total Google ad investment in Q1, down slightly from a year earlier as search ad spending has accelerated.