Reglikedomain industry desk

To grow 15%-20% in 2012 but CPC down — Search spend

Rise of mobile has big affect on CPCs.

I just reviewed Efficient Frontier’s Q4 note for online advertising, which includes predictions for 2012.

The good news? The firm predicts search spend will increase 15%-20% in 2012. On the downside for domain parkers, CPC will decrease 4% on top of 5% Quarter-over-quarter that they noted in Q4.

To be fair, this isn’t an across the board drop in CPC. A lot of it is attributed to an increase in mobile ad clicks, which right now cost less.

Here’s some other interesting data.

Mobile ads are exploding. It’s 7%-8% of search spend right now, up from 2% a year ago. Efficient Frontier expects it to be a whopping 16-22% of all paid clicks by the end of 2012!

This includes tablets, which I think ought to be a separate category from mobile phone traffic.

Yahoo/Bing ROI tops Google. The combo continues to have a better return-on-click for advertisers, but needs to grow its base to attract advertisers.

Facebook is huge in online advertising. The firm predicts it will account for 5% of all online ad spend by the end of the year. In Q4 it reached 2.7% of biddable online advertising spend.

Also on the wire

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