WARC, the international marketing intelligence service, has found that investment in search advertising will rise 9.6% this year to $135.9-billion — equal to 22% of all advertising spend worldwide.

This growth rate is the softest since 2015 and is a marked slowdown from the 16.9% rise in 2018. Search's share of internet advertising has now flatlined at 45.8% — the lowest in more than a decade.

The squeeze on Google's main source of revenue has forced it to confront Amazon head-on in the smart speaker market as it looks to facilitate voice search in future paths to purchase.

Amazon has a first-mover advantage in many markets, notably the United States, United Kingdom and Japan. Control of voice search could be critical to either's success in the future; WARC says that most marketers understand its potential in the coming years but few have plans to use voice search today.

Mobile is driving growth in the search market

The service reports that mobile search adspend is expected to rise 19.2% to $88.1-billion this year — almost two-thirds (64.8%) of total search spend worldwide. The United States alone accounts for 43.0% of this total ($38.1-billion in 2019), while a fifth (21.8%, or $19.3-billion) is transacted in China. Japan ($6.1-billion, a 6.9% share) and the United Kingdom ($5.3-billion, 6.0%) follow.

Google accounts for 95.4% of all mobile searches worldwide — this is higher than its share of desktop search traffic (88.6%). Google's share of mobile search traffic in the United States (94.4%) and United Kingdom (97.9%) is close to its global rate. But in China, its share is near zero, with Baidu the incumbent on 79.9%.

Mobile's share of search advertising investment is rising ahead of mobile's share of search traffic, which has plateaued globally since 2017 as consumers spend more time in-app (over 80% of mobile usage is in-app, according to comScore).

Instagram is used to discover, Google is used to research and Amazon is used to buy

Research by Mindshare shows that Instagram is used by 69% of consumers to discover products, ahead of Snap at 64% and Facebook at 61%. Google is used mostly to research, with 70% of consumers utilising the platform in this way (versus 51% for second-highest Pinterest). Crucially, however, Amazon is used most to buy; 78% of Amazon users report this, compared to 40% using Google for the same purpose.

One in three (32%) online purchases in the United Kingdom begins on Amazon, rising to 52% for entertainment products, 50% for children's products, 47% for household items and 40% for electronics. Comparatively, one in five (19%) online purchases begins with a search engine, such as Google.

Amazon made $35-billion from e-commerce in Q3 2019, up by a fifth from the previous year and putting it on course to reach close to $150-billion in sales for 2019 as a whole. Over one in ten (11%) product page views come from sponsored ads, according to data from Jumpshot.

Voice is becoming a new search battleground for Amazon and Google, but it is a niche marketing pursuit today

Voice is an area of growth for search advertising, aided by the rising popularity of smart speakers — an area where competition between Google and Amazon is fierce. More than one in ten internet users in the United States and the United Kingdom now own a smart speaker.

Amazon enjoys a healthy lead over Google in a number of key markets, including the United States, where three-quarters of smart speaker owners use Alexa. In the United Kingdom, that share is 77%.

According to WARC, the 'first-mover' advantage is crucial here. Google was first to launch in Australia and enjoys a comfortable lead over Amazon (86% penetration versus Amazon's 15%), and the same is true in Singapore (76% versus 24%). The service reports that this may not bode well for Facebook, which is developing an AI assistant for its Portal devices and is playing catch up to win market share in this area.

For all the potential, voice search remains a niche pursuit for advertisers today: only one in ten United States practitioners plans to include it within their marketing strategy for 2020.

A quarter (25.2%) believe it will be an 'extremely' important marketing channel within the next three to five years, but half (48.9%) have no plans to utilise the tech in the short-term.

James McDonald, the managing editor at WARC Data and author of the research, says, "Search has boomed over the last decade as practitioners have put a greater emphasis on performance-related advertising to lift ROI — few marketing strategies exclude a search element today."

"WARC research shows that practitioners regard it as the easiest channel to measure accurately, and it is more cost-effective in driving conversions when compared to online display formats such as video," adds McDonald.

"But the industry is beginning to question whether this focus has been beneficial in the long run, with a number of large, consumer-facing businesses considering a pivot back to more conventional brand-building formats. This could explain, in part, the slowdown in search investment this year — a cooling that will reignite Google's drive to control the next frontier: voice-assisted search," says McDonald.

Global media analysis: A round-up of search advertising 
  • 3.5% conversion rate for mobile search ads on Google
  • 9.6% rise in global search spend this year, to $135.9-billion
  • 19.0% online purchases that begin with a search engine
  • 22.0% search's share of all advertising spend
  • 45.8% search's share of internet advertising spend — the lowest in over a decade
  • 48.9% share of North American marketers with no plans to leverage voice search capabilities next year
Other new key media intelligence on WARC Data
  • Brand activism becomes key strategy for content campaigns
  • Spend on martech rapidly increasing in North America
  • APAC consumers engage more with local brands than internationals
  • Successful drinks brands are top spenders on TV
  • 37% of consumers pay for two or more SVOD platforms
Global Ad Trends is part of WARC Data, a dedicated online service featuring current advertising benchmarks, data points, ad trends and user-generated expanded databases.

Global Ad Trends is a monthly report that draws on WARC's dataset of advertising and media intelligence to take a holistic view on current industry developments. It is part of WARC Data, a dedicated independent and objective one-stop online service that harmonises, aggregates, verifies and evaluates data from over 100 reputable sources.

WARC Data is available by subscription only.

For more information visit www.warc.com/data. You can also follow WARC on Facebook, Twitter or on Instagram.