UK retailers increase spending on paid search, with nearly a third of clicks coming from mobile

UK retailers spent 27% more on search marketing through Google and other major search engines during this past Christmas season than in 2011 with more than 31% of all paid search clicks coming from mobile phones and tablets, according to data from global digital marketing technology company, Kenshoo.

The Kenshoo 2012 Global Online Retail Holiday Shopping Report reveals UK retailers’ Boxing Day search ads generated a 34% increase in online sales revenue with a 43% increase in conversion rates year-on-year (YoY) . Overall, for the season, advertisers in the Kenshoo U.K. retail index generated £12.95 return on ad spend or nearly 13 GBP for every 1 Pound invested in paid search.

“Savvy UK retailers planned ahead for post-Christmas shopping and allocated budgets to capture Boxing Day peaks,” says Aaron Goldman, chief marketing officer at Kenshoo. “Despite increased competition throughout the Christmas season, Kenshoo UK clients adapted their strategies to achieve strong results including creating bespoke campaigns to target consumers by device type.”

The Kenshoo study found that tablets emerged as a critical consumer shopping device, generating 18% of all paid search clicks and 21% of total revenue. More affluent tablet owners produced an average order value (AOV) of £88.48 from search ads, significantly higher than the £73.78 AOV for computers. Despite the strong performance, the average paid search cost-per-click (CPC) for tablets is 31% less expensive than computers.

The study also found that, when comparing paid search ads across mobile phone operating systems, Apple’s iOS (iPhone) devices were dominant (62.4% of clicks), leaving Android behind (34.55% of clicks) with lower conversion rates and smaller average order sizes, while Blackberry drew just 2.18% of clicks.

For paid search ads delivered through tablet devices, 98.3% of clicks came from iOS (iPad) with just 1.07% coming from Blackberry and 0.62% from Android.

Paid search conversion rates in the UK grew steadily from late November through the first three weeks in December and did not drop until the final few days before Christmas, while consumers were choosier with clicks as Christmas Season paid search impressions were up 18% but clicks were down 2%.