Boston-based digital marketing agency iProspect has released a fairly comprehensive (20 pages) report on the state of paid search advertising in 1Q2017.

Data analyzed came from 176,000 active AdWords and Google Shopping campaigns, and do not include YouTube or Display Network data.

All comparisons are year-on-year: 1Q2017 vs 1Q2016.

Highlights:

• 59% of all paid search traffic came from mobile devices.
• AdWords data show increased impressions and clicks on mobile, but decreased on desktops and tablets.
• Mobile impressions grew more than mobile clicks because of increased competition resulting in part from Google displaying more search ads on mobile in 1Q2017 vs. 1Q2016.
• Average CTR was down 17% overall, with mobile down 27%.
• CPC increased across all devices (+27% overall), but most (+40%) on mobile.
• Advertisers spent 44% more on Google Shopping, and clicks increased by 76%. Amazon was a big player.
• Mobile click share for shopping ads increased from 49% to 62%, while CPC dropped by 18%.

Predictions for 2017 and outyears:

• Mobile search share and ad spend will increase further, making mobile CPC equal to desktop CPC by 2018.
• Shopping ad spend and CPC will continue to increase.
• Google Local will become more important beginning in 2017.
• Voice searches will comprise 50% of all searches by 2020.

Comment:

Reading between the lines here, we can see that for its own purposes ($$$) Google is taking advantage of the increasing popularity of mobile devices to grow the volume of mobile paid searches, One way Google has done this is to increase (for 2017 vs. 2016) the number of ads it displays in response to mobile searches. This has increased competition among advertisers and reduced both overall clickthrough rate and cost per click for mobile search.

So mobile search ads look like a relative bargain right now. But this is a temporary situation. As your competitors improve their mobile marketing, your average cost per click will be driven up (and Google will make more $$$). iProspect projects this to happen by 2018.

You need to stay on top of all the changes and new technologies Google is putting into mobile search, and continually improve your marketing and advertising to stay ahead of competitors. Just running lots of mobile ads and enjoying the (temporarily) lower cost per click won't cut it.