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Agile Computing Authors: Elizabeth White, Pat Romanski, Xenia von Wedel, Liz McMillan, Jason Bloomberg

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Adobe Finds Search Remains Biggest Driver of Advertising Spend While Social and Mobile Maintain Growth

Adobe Systems Incorporated (Nasdaq:ADBE) today released findings from its Adobe® Digital Index, with a report focused on digital advertising industry insights for Q1 2012, as well as an outlook for the remainder of the year. The report shows that digital advertising continues its rapid growth across all channels. According to the report, while Facebook is still an emerging digital advertising channel, search remains the biggest driver of ROI for marketers. Previous versions of this report were published by the former Efficient Frontier, acquired by Adobe in January 2012.

Key Report Findings for Q1 2012

  • Spending on mobile platforms reached eight percent of all search spend in the United States, and 11 percent in the UK. Tablets alone account for four percent of total search spend in the United States. Mobile devices and tablets are lower-cost channels and ultimately contributed to Google’s Cost Per Click (CPC) decline of five percent Year over Year (YoY). In contrast, Bing/Yahoo’s CPC increased by 18 percent YoY.
  • Traffic on mobile devices, specifically tablets, increased four-fold YoY, and advertisers were quick to respond, growing search investments in mobile and tablets by 250 percent YoY.
  • Facebook spend has grown by 93 percent YoY and now represents three to five percent of search spend, indicating that social continues to be a strong, emerging digital advertising channel.

Outlook for Q2-Q4 2012

Every month Adobe analyzes advertiser data from over $2 billion in annualized spend under management. Based on a client index from the past three quarters (beginning in Q2 2011), some key trends are emerging:

  • Search spend in the United States is expected to increase at a rate of 10 to 15 percent for the rest of 2012 – consistent with macro trends.
  • Tablet and mobile spend will likely make up 15 to 20 percent of all search spend by the end of 2012. Investments in tablet advertising will grow as tablet visitors are rapidly increasing. Conversion rates on mobile devices are comparable to desktop performance even though mobile CPCs are 30 percent lower.
  • While Facebook ad CPCs have increased 40 percent Quarter over Quarter for the past three quarters, CPCs on Facebook ‘Sponsored Stories’ tend to be lower than Facebook ‘Marketplace Ads’, which may contribute to temporary decreases in CPCs.

Quote

David Karnstedt, vice president and general manager, Advertising Solutions, Digital Marketing Business, Adobe

  • “Investing resources in social has undoubtedly become a key focus for marketers over the last year. While social is absolutely on the rise and an important channel, search is still the key driver of digital marketing ROI. With the emergence of tablets, mobile creates a new opportunity for search investment with efficiency gains to their overall program, at least in the short-term.”

Adobe Digital Index Report: Global Digital Advertising Update Methodology

Full details of the Adobe Digital Index: Global Digital Advertising Update, as well as previous reports, are available for download here and on CMO.com. The analysis of digital marketing and Facebook performance is based on data derived from technology Adobe acquired via Efficient Frontier and Context Optional, which is now part of the Adobe Digital Marketing Suite. Data is based on a client index across key verticals including retail, entertainment, CPG, and finance.

About the Adobe Digital Marketing Suite

The Adobe Digital Marketing Suite offers an integrated and open platform for online business optimization, a strategy for using customer insight to drive innovation throughout the business and enhance marketing efficiency. The Suite consists of integrated applications to collect and unleash the power of customer insight to optimize customer acquisition, conversion and retention efforts as well as the creation and distribution of content. For example, using the Suite, marketers can identify the most effective marketing strategies and ad placements as well as create relevant, personalized and consistent customer experiences across digital marketing channels, such as onsite, display, e-mail, social, video and mobile. The Suite enables marketers to make quick adjustments, automate certain customer interactions and better maximize marketing ROI, which, ultimately, can positively impact the bottom line.

About Adobe Systems Incorporated

Adobe is changing the world through digital experiences. For more information, visit www.adobe.com.

© 2012 Adobe Systems Incorporated. All rights reserved. Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners.

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