Search, Social, and Ecommerce Advertising Metrics and Insights · video ads, which garnered 44% of...

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

Transcript of Search, Social, and Ecommerce Advertising Metrics and Insights · video ads, which garnered 44% of...

Page 1: Search, Social, and Ecommerce Advertising Metrics and Insights · video ads, which garnered 44% of all social advertising spending in Q1. Ecommerce is again the fastest growing channel

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

Page 2: Search, Social, and Ecommerce Advertising Metrics and Insights · video ads, which garnered 44% of all social advertising spending in Q1. Ecommerce is again the fastest growing channel

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

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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 REPORTQ1 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.

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

Paid Search is still driving forwardStill 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 opportunitySocial 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 advertisingSpending 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 fireLaunched 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 2019The 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

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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

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CPC by Device

Social Advertising Performance Q1 2019Social 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.

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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

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Increasing Diversity in Social Ad Inventory

One of the key takeaways from Q1 2019 is that marketers are embracing all of the tools in the social advertising toolbox—specifically, the use of a variety of ad types offered to them. For example, in Q1 2018, Page Post Link Ads represented 34% of social ad spend, but in Q1 2019, they are just around 20% of the total investment. One of Social’s greatest strengths is how visual and engaging the advertising can be, so it makes sense that marketers have availed themselves of these new formats and modalities, rather than relying on one “bread and butter” ad type.

Carousel Product Ads and Video Ads now make up 59% of total social spending, up from 49% one year ago

This growth comes as Page Post Link Ads lose share to more dynamic, more specialized ad types

Marketer Insight

The portfolio of available ad formats for social advertising also vary by publisher. Social marketers should treat each ad format on each platform uniquely and use testing and experimentation to build strong points-of-view on how, when, and why each type should be used for their accounts. Using them in the most impactful manner makes them cost-effective, but using them carelessly and without a true strategy could just be a waste of budget. Marketers should really know the different formats and where they play in the funnel in a holistic way.

Video ads, with sight/sound/motion, can be very powerful storytelling vehicles. With 41% of all social advertising spending going to video ads in Q1 2019, marketers seem to feel confident that they are worth the continued investment.

Video Ads comprised 41% of social advertising spend in Q1 2019

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Focus on: Social Video

Social video ad spending only declined 2% in Q1 vs. the previous quarter

At 44% of Q1 spending, video ads outspent single-link (31%) and multi-link (21%) posts

Instagram Facebook-owned Instagram continues to take the spotlight with a 44% increase in spending year-over-year. While this is a lower growth rate than in previous quarters, it reflects that the photo-sharing app’s growth spurt has lasted well over a year, and is starting to lap those initial big jumps in spending. In Q4 2018, growth of Stories Ads saw a big seasonal spike—which makes sense given the importance of garnering attention during the holiday shopping noise—but much of that spike receded in Q1, and overall investment in Stories ads dipped from 11% to 8% as a share of total Instagram spending.

Focus on: Instagram

Instagram spending continues to grow faster than overall social

YoY spending grew 44% compared to Q1 of last year

Instagram Stories is still very new, very small, and very volatile

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Ecommerce Channel Advertising Trends

Ecommerce Channel Advertising Performance Q1 2019Ecommerce Channel Advertising (ECA), primarily led by Amazon Advertising, has quickly become a major ad option for retail marketers, growing 83% year-over-year in Q1 2019 on a same-advertiser basis. Amazon is already the third biggest digital ad platform in the US and eMarketer has predicted that it will grow more than 50% per year through at least 2020 and capture 7% of all US digital ad spending.

Same-advertiser spending on Ecommerce Channel Ads (ECA) has grown 83% year-over-year

Spending only declined 6% compared to the holiday-fueled fourth quarter, and improved 11% over pre-holiday Q3 levels

Marketer Insight

Ecommerce Channel Advertising has become an incredibly important opportunity for marketers because of its ability to reach in-market shoppers. Wired articulated the value all the way back in 2012: “Facebook knows who your friends are. Google knows what you’re interested in finding on the Internet. Amazon knows what you’ve bought, and has a pretty good idea of what you might want to buy next.” Retail marketers that aren’t actively engaged in ECA either as a real channel in their marketing portfolio or at least testing and learning on these ads might truly be behind the curve.

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Pinterest Performance Q1 2019 Year-over-year, Pinterest had an impressive first quarter of 2019. Across all advertisers managing Pinterest campaigns on Kenshoo—with no same-advertiser filtering—spend more than doubled (up 107% YoY), clicks doubled (up 100% YoY), and impressions were up in high-double digits (up 81% YoY).

Pinterest Growth

Marketer Insight

What’s interesting about Pinterest is that marketers have realized that the visual discovery platform sits in the customer journey at the very top of the funnel—in some ways maybe even before the funnel, when consumers haven’t even decided what they plan to purchase. In most channels, there’s a major upswing in spending from Q3 to Q4, but for Pinterest, we saw budgets start to increase during the third quarter, presumably in order to reach consumers earlier in the season to sow the seeds of interest in order to pay off when it comes time to actually buy gifts in Q4. This also explains why Q1 2019 was actually below the traditional “pre-holiday” spending of Q3 2018 because spending behavior on Pinterest makes Q3 more like part of the holiday.

Spending on Pinterest advertising more than doubled year-over-year

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Apple Search Ads Performance Q1 2019In a short amount of time, Apple Search Ads has found a home in the digital advertising picture. As with Ecommerce Channel Ads, they sit in close proximity to the actual checkout within the store, and the store, in this case, is the popular App Store. Apple Search Ads has shared that 65% of all app downloads result after a search, making these search ads a no-brainer for app marketers to drive adoption.

After debuting on the Kenshoo Apps platform starting in Q3 of last year, Apple Search Ads has made a splash with advertisers. Across all advertisers—once again eschewing our normal same-store filters to better view an emerging platform—and keeping in mind that small, new things grow fast, investment in these ads in Q1 has risen by almost 90% since that initial quarter in-market. That should put into context just how excited app marketers are with the opportunity.

Apple Search Ads: New opportunities for app advertisers

Since launching on Kenshoo in Q3 2018, spending growth on Apple Search Ads has increased rapidly across all Kenshoo clients

As with Ecommerce Channel Ads, these ads get in front of customers close to the moment of purchase

Marketer Insight

Apple Search Ads has a very specific use case: to drive consumers to your apps within the App Store. Most other forms of advertising transport Internet users from around the web and into the store, so there’s not necessarily a strong signal of intent from an ad clicker would even be interested in downloading the app at that moment. However, someone already in the App Store store which implies that he or she is probably looking to find the right app that fits their needs.

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SummaryQ1 was a great start for digital advertising in 2019. With online advertising spending now bigger than offline for the first time this year, the major channels—Search, Social, & Ecommerce—demonstrated strong growth which can be interpreted as marketer continued confidence in their ability to drive business goals. Maturing publishers such as Instagram and Pinterest continue to speed ahead, and the newest channel to the Kenshoo family, Apple Search Ads, has already taken a giant step forward.

Search Advertising: Paid search spending was up 11% year-over-year in Q1 2019 with YoY decreases in CTR and CPC demonstrating that there is still room in digital’s largest channel for efficiency gains. After three consecutive quarters with desktop spending outpaced by mobile spending, Search is firmly a mobile-first channel.

Social Advertising: Social spending was up 27% year-over-year, helped by Instagram which was up 44% over Q1 2018. Social has a variety of engaging, visually-rich ad formats including Stories Ads, Carousels, and Video, and in Q1 2019, advertisers continued to diversify their portfolios and spent heavily on these various ad types to maximize the impact and influence of their campaigns.

Ecommerce Channel Advertising: ECA continues to shine, up 83% year-over-year in Q1 2019. It’s hard to judge where the ceiling is for this channel because it can still be considered to be in its honeymoon phase with many retail marketers who continue to test and learn. One would expect that at some point it will mature and growth will slow, but as these ads are effectively introducing many branded manufacturers to the world of direct response digital marketing, that slowdown is not expected anytime soon.

Emerging Publishers: Advertising spending on Pinterest more than doubled (107%) year-over-year across all advertisers, and is establishing itself as a marketing channel for reaching above the funnel. And in just two short quarters, app marketers using Kenshoo have fully embraced Apple Search Ads with rising budgets which suggest that they are beyond the experimentation phase.

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Methodology

The analysis within this report is based on advertiser campaign data managed through the Kenshoo platform on Google, Bing, Yahoo!, Yahoo Japan,

Baidu, Yandex, Pinterest, Apple, Facebook, Instagram, Snapchat and Amazon between January 2018 through March 2019. The data sample contains

over 500 billion impressions, 14 billion clicks and $6 billion in advertiser spending.

For charts showing spending and impressions/clicks, volume metrics have been normalized to a factor of one based on the initial volume for the first

quarter of data shown. Data points from subsequent quarters are based on a multiplier from the first quarter. For example, 1.6 means that volume is

60% greater than volume on the initial quarter measured. Ad spending, CPC and CPM are measured using Ex-FX or “Constant Currency” adjustments,

where results are based on native currency and only translated to common currency after aggregation.

Except where noted for Pinterest and Apple Search Ads analysis, advertisers must have 15 consecutive months above a minimum spending threshold

in the channel (a “same-store” or “same-advertiser” approach) to be included in the analysis. Some outliers were removed when necessary.

For more information and to interact with the Kenshoo QTR dataset yourself, please visit our Quarterly Trends Report Snapshot that can be found at

www.Kenshoo.com/digital-marketing-snapshot.

About Kenshoo

Kenshoo is the leading technology platform for brands looking to plan, activate and amplify effective marketing across the most-engaging digital

channels. Kenshoo offers the only marketing solution that provides data-driven insights and optimization technology to help make informed decisions

and scale performance across Google, Facebook, Bing, Pinterest, Snapchat, Instagram, Amazon, Apple, Yahoo, Yandex, Yahoo Japan, and Baidu.

Kenshoo’s machine-learning algorithms and cutting-edge AI enable companies to predict and keep in-step with the ever-changing consumer journey.

With 27 international locations and backed by Sequoia Capital, Arts Alliance, Tenaya Capital, and Bain Capital Ventures, Kenshoo generates over $350

billion in annualized revenue for the world’s top brands. Please visit Kenshoo.com for more information.

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Kenshoo brand and product names are trademarks of Kenshoo Ltd. Other company and brand names may be trademarks of their respective owners.