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  • The Kenshoo Q1 2019 Quarterly Trends Report Search, Social, and Ecommerce Advertising Metrics and Insights

  • Kenshoo Quarterly Trends Report Q1 20191

    Contents

    Search Advertising Performance Q1 2019 3

    Social Advertising Performance Q1 2019 5

    Ecommerce Channel Advertising Performance Q1 2019 9

    Pinterest Performance Q1 2019 10

    Apple Search Ads Performance Q1 2019 11

    Methodology 13

    Summary 12

  • Kenshoo Quarterly Trends Report Q1 20192

    Which is why you, the marketer, should be paying attention to Q1. What happened? Where is the money shifting? In what direction are the industry’s most important key performance indicators (KPIs) moving?

    Although trend data in aggregate across thousands of advertising accounts may not fully represent the reality of how your particular brand [or client] is approaching the market, trends are still trends and they can provide context to guide you. It’s

    important to keep a pulse on the industry and to understand what’s happening across industries and regions and channels, even if the plan is to go against the grain and forge your own path.

    The Kenshoo Quarterly Trends Report represents over $6 billion dollars in annualized marketer spend and continues to be a well-respected yardstick in the industry. With online spend now eclipsing offline spend for the first time in the history of advertising, following the trends across the digital heavyweights—Search, Social, and Ecommerce—is even more valuable as these are now the biggest channels in marketing, not just part of a niche segment as it was before.

    “…the way the first quarter goes is most likely how the next few quarters will shake out.”

    The Kenshoo QTR dataset consists of advertiser activity over the previous 15 consecutive months consisting of

    more than:

    This dataset spans Kenshoo’s publisher partners such as Google, Bing, Pinterest, Snapchat, Facebook, Instagram, and includes analyzed performance data taken from over 3,000 advertiser and agency accounts across 20 vertical industries and over 60 countries.

    14B

    500

    $6B USD

    billion impressions,

    billion clicks

    billion dollars in advertiser spending

    THE KENSHOO Q1 2019 QUARTERLY TRENDS REPORT Q1 is always a bit of a reset for marketers. Not only is it the first quarter of the new year, but it follows the competitive and stressful holiday shopping season with a grueling sprint to the end. Q4 isn’t about trying out new things or placing long shots. It’s about sticking with what works and squeezing every bit of performance out of the marketing plan.

    Conversely, Q1 represents a new beginning and marketers are more open to fresh ideas that just wouldn’t have been prudent during the Q4 crunch time. It’s the quarter that marketers can experiment with emerging channels, test new technology, and try out some of the creative thinking that they’ve been waiting to try for the new year.

    Certainly, Q1 is when the new marketing budget—worked out in principle and approved at the end of the year—begins to take shape. It’s a bit of advertising Darwinism, in which channels that have garnered more consumer attention in the previous year will be rewarded with more spend and some of the choices placed in the previous year that didn’t end up paying off will get diverted to other line items. New kids on the block get a chance to compete and prove themselves this quarter.

    So, yes, Q1 is highly indicative of how marketers view the landscape and one can interpret each dollar, euro, peso, and yen spent as a vote of confidence in those channels. It doesn’t mean that things won’t change throughout the year—marketing is always in flux—but it is certainly telling and the way the first quarter goes is most likely how the next few quarters will shake out.

  • Kenshoo Quarterly Trends Report Q1 2019 3

    Here are some of the key storylines from Q1 2019’s advertising spend and performance data:

    Paid Search is still driving forward Still the biggest channel in digital advertising, SEM continues to grow year-over-year (YoY) in spend (up 11%), clicks

    (up 25%), and impressions (up 35%).

    Social is maturing and becoming a more diverse opportunity Social advertising spend was up 27% YoY in Q1 2019. Marketers continue to embrace the channel’s visually engaging

    ad formats and have become less dependent on the once-standard post link ads. A key part of this transformation is

    video ads, which garnered 44% of all social advertising spending in Q1.

    Ecommerce is again the fastest growing channel in advertising Spending on Ecommerce Channel Ads—led by Amazon Advertising—grew 84% year-over-year and marketers are

    expected to continue fueling this growth in 2019.

    Apple Search Ads are on fire Launched in Q3 2018 at Kenshoo, these ads have exceeded all expectations. In Q1 2019, dedicated app marketers on

    the Kenshoo Apps platform spent roughly the same amount on these ads as Google and Facebook combined.

    Search Advertising Performance Q1 2019 The drop from Q4 to Q1 is something we’ve come to expect every year—it would be a bigger surprise if it wasn’t. More important is that search spending was up double digits (11%) year-over-year and what jumps off the page is how impressions and clicks dramatically outpaced spend. With impressions up 35% YoY and clicks up 25% YoY, it would seem that search marketers are still able to find both eyeballs and engagement in this mature digital channel.

    Search Trends

  • Kenshoo Quarterly Trends Report Q1 20194

    Where is this efficiency coming from? Drops in both click-through rate (CTR) and cost-per-click (CPC) combined to drive these gains. Although a drop in CTR isn’t intuitively considered efficient in some channels, in a pay-per-click medium such as search engine advertising, the fact that CTR is down 7% YoY means that marketers are effectively getting more search impressions for their budgets. In SEM, sometimes a lower CTR can impact quality scores and force advertisers to increase their search bids, but with CPCs on average down 11% versus Q1 2018, it would seem that this is not a factor.

    Search Trends

    After years of moving in this direction, Q1 2019 represents the third consecutive quarter that search ads served on mobile devices has eclipsed marketer spend on desktop. While this shouldn’t be surprising to anyone who actually owns a smartphone, that we are now almost a full year into this majority status and almost certainly locks in web search as being a mobile-first medium.

    Focus On: Mobile Search

    Mobile share remained mostly steady from Q4 to Q1, and has comprised approximately half of all search spending for three consecutive quarters

  • Kenshoo Quarterly Trends Report Q1 2019 5

    CPC by Device

    Social Advertising Performance Q1 2019 Social advertising spending continued its upward march and was up 27% year-over- year in Q1 2019 versus Q1 2018. Impressions were up 20% YoY and 13% QoQ which is a strong signal of efficiency because Social often has mixed goals that aren’t click-based, but rather impression-based. In fact, many brands often use Facebook’s Reach & Frequency campaigns that are just focused on impression delivery, much like television advertising and other offline [non-clickable] media.

    Social advertising spending was up 27% year-over-year

    Mobile CPCs are still much lower than desktop, bringing down the average across Search to $0.42 in Q1 2019, a 12% decrease from a year ago. The efficiency drop in overall Search CPCs trend is most likely tied to marketers investing more of their budgets to this inexpensive mobile traffic.

    Holiday price premiums receded across all devices, driven primarily by shopping campaign seasonality

    Desktop search ads continue to show an overall upward price trajectory

    Marketer Insight

    Search marketers must think more about the mobile experience when consumers search on the go. Mobile searchers are generally looking for immediacy with their searches so ad copy and landing pages that cater to this behavior tend to work better. The mobile search engine results page (SERP) is also much smaller than a desktop or laptop monitor, so there are fewer ads above the fold which means that each search ad is prominent on the smaller screen. Experiment with mobile SEM features such as click-to-call, location, and reviews to see if they boost your results.

  • Kenshoo Quarterly Trends Report Q1 20196

    Social Trends

    Clicks were down 23% YoY, and while some might consider that a red flag, those aforementioned impressions-based campaign goals that many brands utilize in Social may cast this trend in a less negative light.

    Similarly, click-through rates have been steadily falling since last year, down 37% YoY. Both of these indicators of decreased engagement may be explained by the increased use of branding ad formats such as Stories Ads and Video Ads that can still impact and influence consumer behavior without the need for click interactions. Click-through rate has never been a particularly robust indicator, and in today’s social advertising ecosystem, maybe even less so.

    Social Trends

  • Kenshoo Quarterly Trends Report Q1 2019 7

    Increasing Diversity in Social Ad Inventory

    One of the key takeaways from Q1 2019 is that marketers are embracing all of the