Today, Skai™, — a leading commerce intelligence platform — is publishing its Q4 2021 Digital Marketing Quarterly Trends Infographic, an in-depth analysis of the digital marketing trends that defined the last quarter (Q4), with a full report to follow next week. Overall, spending growth reflects just how out of the ordinary things were in Q4 of 2020, at the height of pandemic-fueled disruption of the online advertising industry.
Paid search leads holiday charge
Spending from commerce advertisers between November 1 and December 25 grew compared to the same period last year across digital ad channels. Paid search spending grew 19%, emphasizing its vital role in directing traffic to an expanding universe of online retailers. Retail media advertising outlays increased 14% and paid social rose 11%.
Growth slows but continues in Q4
With Q4 of 2020 representing a peak in the impact of the pandemic on digital advertising and online shopping in particular, spending increases over those numbers were more modest. Retail media and paid search both eclipsed last year’s spending levels by 23%, while paid social grew 14%.
Ad prices factor into spending increases
The cost per thousand impressions increased 22% compared to last year for paid social ads, growing faster than total expenditures and emphasizing increased competition for holiday shoppers. Paid search saw the cost of a click increase by the same percentage as spend, rising by 23%, while retail media prices only grew 13%, with increased click volume making up the rest of the spending gains in that channel.
Social campaigns shift to address the full conversion funnel
While direct response objectives still dominate, campaigns that are focused more on branding are growing the fastest across Facebook as advertisers tune their programs in response to increasing privacy restrictions on ad targeting and measurement. Traffic, reach, and video views were the campaign objectives seeing the most spending growth year-over-year.
Search advertisers zero in on conversion metrics
Particularly among non-commerce advertisers where a conversion is not purely transactional, paid search programs that were optimized for acquisition cost saw big increases in both ad prices and spending.
Other findings include:
- Retail media impressions were up 23% quarter-over-quarter (QoQ) and down 8% year-over-year YoY
- Retail media clicks rose 23% QoQ and grew 9% YoY
- Retail media CPC grew 4% QoQ and increased 13% YoY
- Paid search impressions increased 39% QoQ and rose 1% YoY
- Paid search clicks rose 30% QoQ and were flat YoY
- Paid search CPC dipped 1% QoQ and rose 23% YoY
- Paid social impressions grew 2% QoQ and dropped 6% YoY
- Paid social clicks increased 8% QoQ and were down 8% YoY
- Paid social CPM rose 21% QoQ and increased 22% YoY
“We knew that the fourth quarter last year was exceptional, and now we’re seeing just how much that was the case, in terms of overall volume” said Chris Costello, Senior Director of Marketing Research for Skai™. “Now we’re seeing how advertisers parlay that rapid growth into something more sustainable by tuning their approach in the face of evolving shopping patterns, increased emphasis on algorithmic bidding, and the ever-changing privacy landscape. If anything, these channels are reinforcing their fundamental strengths in the traditional conversion funnel, which then reinforces the connections between them.”
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