In late April, Google updated its algorithm to give mobile-friendly Web sites preference in ranking for organic searches. Now, more than two months later, companies that didn’t prepare their sites are paying the price–and so is Google, according to Adobe Digital Index (ADI).
Indeed, companies that weren’t ready for the so-called “Mobilegeddon” have lost up to 10% of traffic, according to ADI.
“While there wasn’t a precipitous drop among non-friendly sites, the effect is pronounced over the 10 weeks after the event,” said Tamara Gaffney, principal at ADI. “Such continued loss of traffic suggests that immediate emphasis would have been placed on paid search as a quick way to recover traffic. But that strategy is not necessarily sustainable.”
According to ADI’s Q2 Digital Advertising Report, brands that neglected to address their mobile Web strategies are seeing mobile advertising via Google’s network delivering less value at a greater cost, with a growing gap between mobile click-through rates (CTRs) and cost-per-clicks (CPCs). ADI reports mobile CPCs are up 16%, while CTRs are falling, down 9%.
“Increases in CPC stretch marketing budgets due to what is known as click inflation–advertisers have to spend more just to stay even,” explained Joe Martin, an analyst with ADI.
Google, some say, is partly to blame for not being aggressive enough in updating its own business model for mobile. Its overall global display business is suffering as a result, tilting the scales in favor of Facebook, whose more dramatic changes for mobile have worked in the company’s favor.
“Back in the day, Facebook put four display ads on a page and one day reduced it to two, recognizing that its mobile user base didn’t want to be looking at so many ads,” Gaffney said. “Additionally, the company began to show ads within the newsfeed as well, further optimizing for the mobile user. These were both very radical changes that threw marketers off. Essentially, decreasing the number of ads on a page reduced the total number of impressions served, but the trade-off has been an increase in engagement.”
Half the impressions at twice the cost must generate the same or more “clicks,” or other success metrics, according to ADI's Q2 Social Intelligence Report. But even with such a drastic change, Facebook has seen an increase in the total number of actions consumers take (+11%). As a result, CTRs are nearly double what they were before the change.
On the other hand, Google, with its incremental changes, has seen a decrease (-3%) in consumer actions.
“They’re starting to lose ground as a marketing vehicle,” Gaffney said. “And part of the reason why is because they aren’t getting as many clicks out of global display ads.”
In both Google’s and Facebook’s cases, data owned by the platforms is being used to align consumer interests with advertising messages. This reinforces the notion that common interests are the new demographics of media, Gaffney said.
In a separate, but related, analysis to better understand the perceptions of consumers and media, ADI found that users think Facebook display ads are more relevant (51%) than Google display ads (17%), the majority of which are displayed on YouTube.
“Facebook users are more likely to give brands a chance to communicate,” Gaffney said. “The data is telling us that incremental change to adapt to mobile is not going to be sufficient for marketers. They will have to disrupt the process in all parts of their offering to adapt to mobile. The whole mantra of mobile-first isn’t even enough. It has to be mobile is the experience because the world we live in is not going to be about engagement and ROI in the way we are used to. It is going to be about fully integrating into the mobile experience in new and important ways.”
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