The bad news for Google continued in programmatic display, with IgnitionOne reporting that Facebook saw a 51 percent increase in spend while Google experienced a 10 percent drop. Overall, programmatic display spend moved up 10 percent. 

?The rise in mobile impressions and clicks is definitely a big story for Q1 2016,? said Joseph LaSala, vice president of marketing for international markets at IgnitionOne. ?Impressions were up by 73 percent and clicks were up by 86 percent. 

?The impressive increase in mobile impressions also helped to drive an overall rise in U.S. Google paid search impressions in Q1 of 19 percent - the largest jump in three years,? he said. 

 

?The major jump in impressions is largely due to recently added mobile ad real estate, which means that more impressions and clicks are being generated. This increased supply of real estate and cheaper traffic is also behind the drop in CPCs.?

 

Shifting budgets
?Google?s paid search spend dropped in Q1 by 4.5 percent, a contrast with recent quarters when spend showed strong, steady growth. 

While the spend on mobile search was up 43 percent year over year, CPCs were down, coming in at almost half of desktop CPCs. This means that even though budget is shifting to mobile, cheaper traffic is dragging down the overall spend. 

The downward trend is a result of marketers shifting budget to mobile where CPCs dropped due to increased supply from recently added mobile ad real estate.

With mobile impressions up 73 percent and mobile clicks up 86 percent, it is clear that search continues its shift to mobile.

Smartphones are an important driving force.  

Phones accounted for 66 percent of spend for mobile devices compared to 34 percent for tablets. 

Tablets saw a 12 percent decrease in spend during the quarter and a 10 percent decrease in CPCs.

Phones saw click-thru rates increase 7 percent, while on tablets this rate dropped 28 percent. 

Overall, paid search impressions increased 19 percent ? the biggest jump in three years ? and clicks were up 15 percent.  

By sector, travel saw a 12 percent drop in paid search spend while finance saw a 16 percent drop. 

?Next quarter will most likely see flat or slightly increased CPCs quarter over quarter as the market adjusts to the additional ad space,? Mr. LaSala said. ?However, in terms of year over year data we?ll still be seeing a pattern of decreasing CPCs, because we?ll be comparing Q2 2015, when there was only space for 2 ads, to Q2 2016, when there is additional real estate.?