While consumers are increasingly conducting searches via their mobile devices, the budgets allocated for mobile search have often not kept pace. This is starting to change, with budgets for both smartphone and tablet search growing significantly.

In some cases brands are spending more against search on tablets than on smartphones because the demographics of tablet users, who tend to be young, affluent shoppers, make this space so attractive. The brands focusing aggressively on tablet search often come from the retail and auto manufacturing categories. 

?Tablet has a desktop-like performance from a return perspective and as a result, it is growing faster than mobile at this point,? said James Beveridge, senior analyst for Performics, Chicago.

?In some cases, where brands do not yet have a well-defined mobile experience but their Web experience works well on a tablet, we are seeing them spend more on tablets than on smartphones,? he said.

?We expect to continue to see in the short-term an ongoing heavy investment in tablet search as marketers start breaking out performance by device.?

Inflection point
Performics expects the rate of growth for tablet and smartphone search to even out by the end of the year as the user experience on smartphones improves.

The 2011 holiday season was the first time many brands really grasped the significant amount of traffic they are getting from mobile devices and the need to spend more heavily in mobile search as a result.
In response, many have started spending in mobile search more heavily over the past few months.

?We have seen a definite acceleration in brands reallocating or allocating more spend toward mobile search,? said Matt Miller, senior vice president of strategy and analytics at Performics.

?This past holiday season was a real inflection point where brands started anticipating the volume of traffic that would come through via mobile.?

With mobile search budgets growing more rapidly, the gap is closing between brand investment levels in mobile search and mobile traffic levels.

In February 2011, 9.2 percent of Performics? clients total clicks came from mobile but by February of this year that number had grown to 21 percent. The spend against mobile search was 5.7 percent of overall budgets last year and 15.6 percent this year.

?While we have seen mobile clicks more than double in terms of their share in the past year, we have seen spend almost triple,? Mr. Miller said.  

Room for growth
However, while mobile search budgets are growing quickly they still lag mobile clicks. 

One reason why this gap continues to exist is because advertisers have not yet fully adjusted to the shift in consumer behavior towards mobile.

?Budgets are not yet at appropriate levels to match the growth in mobile search,? said Matt Lawson, vice president of marketing for Marin Software, San Francisco, CA.

?At the end of 2011, we still saw a significant gap between mobile clicks and mobile budgets,? he said.

?This past December, mobile devices drove more than 12 percent of all paid search clicks, whereas mobile budgets sat at just under nine percent.?
 
Marin expects mobile search budgets as a percentage of overall paid search spend to more than double by the end of the year.

While mobile search budgets will continue to grow this year, the volume of consumer searches and clicks could still outpace budget growth.

Another reason for the discrepancy between mobile traffic and search budgets is the challenge posed by mobile search when it comes to tracking. As consumers increasingly conduct a search on a mobile device but complete a transaction in a store, it is challenging for brands to match the in-store purchase back to the original mobile search.

?At some level, there are challenges to mobile that need to be solved in order for advertisers to spend more,? Mr. Lawson said.  

?On mobile devices, the use case is different  ? people aren?t as likely to purchase on a phone, which is the traditional notion of conversion,? he said. ?On a mobile phone, however, people may search for phone number or a store address, which results in an offline sale.

?Companies need to learn how to quantify these types of events so they can measure and optimize to them. Once they do, we anticipate budgets will quickly come in line with consumer click volumes.?

Smart marketers invest
The growth in mobile search budgets is a result of mobile search demand growth and the fact that mobile consumers are engaging with brands, said Chris Wallace, senior vice president of digital media services at iCrossing, New York.

The search marketing agency sees mobile spending increasing approximately 300 percent year over year across it portfolio. Budgets for retail, travel, finance and auto brands in particular are growing and keeping pace with the growth in mobile search.

?These users are engaging with brands once delivered from mobile search ? they are buying, they are calling, they are "liking" at conversion rates in line with desktop search,? Mr. Wallace said. ?Therefore, if conversion rates are similar to desktop and CPC?s are similar then smart marketers will invest in mobile search with equal consideration to desktop.?