Marin Software has released research findings from its global Q4 2018 Digital Advertising Benchmark Report. The research confirms that search spend grew 10% globally year-over-year. Digital advertisers also spent larger portions of their budgets on Instagram stories. In addition, advertisers continued to invest in lower-funnel product-focused ads to take advantage of the holiday shopping season and continued rise of eCommerce.
Key findings include:
Instagram stories and dynamic product ads rule
Instagram received 18% of total Facebook spend, with 34% of that spend allocated to Instagram Stories. This represents a 36% increase from the previous quarter. Other notable social trends included a significant shift in year-over-year spend to lower-funnel formats. These formats include Dynamic Product Ads and Collection Ads, which maximise the mobile experience with alluring, high-quality, product-focused ads. Dynamic Product Ads accounted for 35% of total Facebook spend in Q4.
eCommerce on the rise
Google Shopping Ads captured 36% of search spend for all verticals. Shopping Ads remained retail advertisers’ bread and butter. Ecommerce search engines increasingly join the quest to deliver relevant, targeted experiences. According to Marin Software data, monthly spending on eCommerce channel ads has increased 5x since January 2018.
Paid search up, CTRs down
Paid search spend grew 10% globally year-over-year. Q4 remained the strongest quarter, with Financial Services (+25%) and retail (+12%) leading the charge. As inventory gets more expensive, however, more spend doesn’t necessarily mean more clicks. There was a modest 10% increase year-over-year in retail, less than the search spend for the vertical.
Search CPCs vary by vertical
Travel clocked the lowest global CPC in Q4 at $0.45, followed by Retail at $0.48. Education and and Technology represented the highest CPCs in Q4, at $2.92 and $1.51, respectively.
Mobile search holds steady
Mobile accounted for 36% of search spend share in Retail and 41% of spend share across all verticals in Q4. These devices continued to be a crucial touch point for product purchasing decisions. This is particular important during the fast-paced and competitive holiday season.
According to Wesley MacLaggan, SVP of Marketing at Marin Software, “eCommerce is growing as an advertising channel. As a result, we’re seeing the industry shift more spend toward lower-funnel ad formats. This includes Google Shopping Ads and Dynamic Product Ads on Facebook, that allow brands to capture consumers’ attention at the most critical points in the purchase journey.”
MacLaggan continued, “Instagram stories have been another up-and-coming ad format that the industry is paying close attention to. With 400 million daily active users, advertisers are flocking to this format to take advantage of the direct attention of a massive audience. It’s a lower-cost yet effective alternative to Instagram feed ads.”
To create its report, every quarter the company aggregates digital advertising performance across its customer base. Marin Software shares its results with digital marketing professionals to compare against their own initiatives. In addition to global industry trends, the research explores the most compelling areas of digital marketing, including the evolution of mobile. The best use of creative for more clicks and market share. The use of search and social tools to attract the right customers.
Marin Software only includes those advertisers active on its platform for the past five quarters. The company measures key performance indicators on a year-on-year and quarter-over-quarter basis. Marin removes any outliers with significant year-on-year or quarter-over-quarter changes.
Enterprise Times: What this means for businesses?
The report clearly illustrates that digital advertising continues to change rapidly. Increasingly, consumers online lives are dominated by three companies. Google, Facebook and Amazon. With product ads on Google and Facebook, and the rise of Amazon advertising, publishers are fundamentally transforming how eCommerce advertisers connect with customers. As a result, businesses irrespective of size and sector must have the tools to stand out in an increasingly competitive landscape. These tools must enable businesses to target customers with the right message at the right time. The tools will also be required to drive sales, raise brand awareness and integrate efforts across search and social activities.
Businesses, that fail to understand their customer or the changing digital marketing trends will simply lose out in the marketplace. Digital advertising continues to be a fluid science. Tracking, monitoring customer data and recognising changes in consumer taste and fashion will be key to survival.