Brief:

• More than half (54%) of search ad spending went to mobile platforms in Q3, up from 50% in the prior quarter. Advertisers followed the audience migration from desktop to mobile devices with the shift in paid search ad spending, according to a study that marketing technology firm Kenshoo shared with Mobile Marketer.
• Mobile made up 88% of total social media ad spending in Q3, helping to drive the 32% increase in spending from a year earlier. More than 70% of all paid search impressions in the quarter were on mobile devices. Social media's cost per 1,000 impressions (CPM) rate fell 3% last quarter from a year earlier, giving brands a chance to boost their spending on social networks while maintaining cost efficiency, Kenshoo found. E-commerce companies are especially dependent on product ads, which made up 39% of their search spending and 37% of social spending in Q3.
• E-commerce platforms like Amazon also are generating their own ad revenue, with a 54% gain in e-commerce channel advertising (ECA) in the quarter from a year earlier, outpacing social and search spending. Marketers boosted their ad spending on Prime Day, Amazon's annual shopping event on July 15, by 3.8 times the average for the rest of the month and saw revenue surge 5.8 times, per Kenshoo.

Insight:

Kenshoo's study of digital media spending trends indicates that internet search mostly has become a mobile-first experience as consumers shift their online time to smartphones. That shift means that marketers must tailor their websites for mobile viewing, especially since search giant Google in July 1 began prioritizing mobile versions of new websites over their desktop counterparts. A 7% gain in search ad spending in Q3 bodes well for Q4, when marketers typically boost media budgets to reach holiday shoppers, per Kenshoo.

The research on e-commerce advertising confirms Amazon's most recent quarterly earnings report that showed a 45% jump in revenue from its "other" category that mostly comprises ad sales — although CFO Brian Olsavsky hinted that ad growth was actually higher than that. Amazon's revenue from search ads are forecast to jump 65% to $11.7 billion by 2021 from this year as the e-commerce giant takes a bigger slice of Google's and Facebook's market share in the U.S., eMarketer predicts. While Walmart, Target, eBay and Pinterest generate revenue from search ads, their combined market share is less than 4% of the total, per eMarketer.

Kenshoo's findings were derived from 15 straight months of performance data from more than 3,000 advertiser and agency accounts. The company gathered data on 500 billion impressions, 13 billion clicks and $5.5 billion in advertiser spending. Its data is derived from spending on Google, Microsoft, Baidu, Yandex, Yahoo! Japan, Verizon Media, Amazon, Apple Search Ads, Pinterest, Snapchat, Facebook, Instagram and the Facebook Audience Network.