• by Laurie Sullivan  @lauriesullivan, October 10, 2011

Mobile paid search campaigns could take as much as 10% of marketers' search budget, with tablets garnering about three-quarters of the ad spend by the end of the year. Brands spent 20% more on paid search campaigns during Q3 2011, fueled by an increase in ad budgets across retail and finance, but many received less return on investments, according to an Efficient Frontier study.

ROI on Yahoo and Bing rose 9% year on year, reflecting the alliance's continued attention to high-quality traffic, but the return on Google fell 3%. ROI on Yahoo and Bing continues leading with a 10% gap at 111%, compared with Google, for three consecutive quarters positioning the alliance as an attractive platform for advertisers seeking better ROI.

The report suggests an inability by the Bing and Yahoo alliance to scale the combined platform, while maintaining high-quality traffic as the main reason for Google taking market share and search volume. In fact, Google regained market share in Q3 2011 for the first time since the Bing-Yahoo alliance launched in the U.S.

Impressions across the three main search engines remained steady, though Google demonstrated a slight 2% decline. Augmenting paid search implementations with Google Sitelinks helped search marketers gain more clicks, rather than impressions, demonstrating sequential improvements, but not year on year.

Cost per clicks (CPCs) rose for Google, as well as Yahoo and Bing, with a higher year-on-year increase on the combined Yahoo-Bing engine. The movement reflects the willingness by advertisers to pay more for higher ROI and reach.

The report suggests the Bing-Yahoo partnership will focus on increasing inventory to regain share from Google and, in turn, U.S. advertisers will spend 15% more in Q4 2011, compared with the prior year, to get it.

Social ads also gained momentum. Facebook ad CPCs rose 54% in the quarter, sequentially. Facebook has become an essential marketing channel for many brands. Increased CPCs on the site reflect a higher volume of advertisers and more price competition on the platform.

As marketers see more value in social media marketing, advertisers continue to increase sequential ad spend in social by 25%. Strategies to extend the reach with Sponsored Stories and acquire new fans with Facebook ads continue to an uptick in spend across the site. The study attributes 84% of "engagement" or clicks to Likes that link back to Facebook advertising. Today, brands increase fan counts on average of 9% monthly, increasing their fan base by two-times the amount annually.

When it comes to budgets, mobile could take between 7% and 10% of paid search by the end of this year. Several factors come into play, such as Google's move to consider mobile Web optimization into keyword quality scores for mobile campaigns. The ability to attribute conversions across devices—mobile, tablet, desktop—becomes possible with the development of the Google+ network that keeps users logged in to the Google ecosystem.

Tablets captured 77% of all retail mobile ad spend in September 2011. In less than a year, mobile search spend went from 0.5% to 4.2%. For some retail advertisers, mobile spend remains 7% of the amount they spend on search marketing, with tablets representing 60% of all mobile impressions and clicks.