SAN FRANCISCO, April 29, 2021 /PRNewswire/ — Kenshoo, a global leader in marketing intelligence and activation technology, is releasing the Q1 2021 Digital Marketing Quarterly Trends Report, outlining the digital advertising trends that dominated the first quarter of 2021. The sustained popularity of online shopping pushed brands to continue investing heavily in support for their online channels, triggering growth in spending across Paid Search, Retail Media, and Social.
Retail Media Brings in New Players and Booming Spending
The first quarter of 2021 proved to be strong for Retail Media spending with new players rolling out broader advertising capabilities for brands on their platforms. While still the dominant force, Amazon’s share of the larger Retail Media pie declined from 98% a year ago to 89%. Together, Instacart and Walmart comprised 11% of total spending in Q1 with Instacart at five percent and Walmart at six percent.
In addition to the diversification of where brands are investing their Retail Media dollars, the amount is also up 74% year-over-year. Clicks for Retail Media ads increased 65% year-over-year, and impressions have grown 89% during the same time frame.
Cost-per-click has gone up compared to the same quarter last year (five percent) and clickthrough rates have seen an 11% decline.
The Commerce Halo Effect and Surge in Paid Search
The online shopping boom created a halo effect; commerce advertisers grew Search budgets faster than the rest of the channel to match spending increases in Retail Media to bring customers to the ecommerce sites and convert interest into revenue. This was part of a perfect storm of conditions that drove record growth for Paid Search—up 46% year-over-year—and emphasized the impact of ecommerce growth beyond the point of sale.
While the overall clickthrough rate for the search channel dropped 12% year-over-year, keyword ads saw this rate grow significantly, helping drive overall clicks up 66% compared to Q1 2020. Meanwhile, search shopping ads were the main component of 88% growth in impressions. Cost-per-click across the combined keyword and shopping segments dipped 12% year-over-year, matching the overall change in clickthrough rate.
Social Spending Jumped in Comparison to Q1 2020
While there was the typical seasonal slowdown after the holidays, when looking at the numbers year-over-year, investment in social media advertising grew 32%. Impressions and clicks both increased by 13%, while the cost per thousand impressions (CPM) was up 17%. Two out of every three ad dollars on Facebook were allocated to Campaign Budget Optimization, with spending up in this segment more than twice as much as the overall Social channel at 77% year-over-year.
“The amount of money brands are putting into digital advertising is surging, and this is a trend we believe will sustain as ecommerce continues to dominate,” comments Chris Costello, senior director of marketing research at Kenshoo. “The growth of Retail Media and its halo effect on Paid Search point to an increasingly interdependent relationship between digital touchpoints for commerce advertisers. In the months to come, more retailers will push to gain a piece of the advertising revenue pie, and both those retailers and the consumer brands that they sell will turn to adjacent channels to let customers know how to find them.”
Methodology
Analysis is drawn from a population of approximately $7B in advertising spend, comprising more than 3,000 advertiser and agency accounts across 40 vertical industries and over 150 countries running on the Kenshoo platform on Google, Microsoft, Baidu, Yandex, Yahoo! Japan, Verizon Media, Amazon, Walmart, Instacart, Criteo, Apple Search Ads, Pinterest, Snapchat, Facebook, Instagram and the Facebook Audience Network.
Except where noted, only advertisers with 15 consecutive months of performance data are included and some additional outliers have been excluded. Ad spending and pricing have been translated to USD at the time the spending was incurred.
About Kenshoo
Kenshoo is the leading marketing activation and intelligence platform for brands looking to drive growth by engaging customers across digital touchpoints. Kenshoo offers the only marketing solution that combines augmented analytics for actionable consumer and market insights with campaign orchestration and marketing measurement for success on Google, Facebook, Microsoft, Amazon, Walmart, Apple Search Ads, Pinterest, Snapchat, Instagram, Verizon Media, Instacart, Target, Yandex, Yahoo Japan, and Baidu. Kenshoo’s machine learning algorithms leverage market signals and internal data, enabling brands and agencies to predict trends and keep pace with customers. Kenshoo has seven international locations and is backed by Sequoia Capital, Arts Alliance, Tenaya Capital, and Bain Capital Ventures. Please visit Kenshoo.com for more information.
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SOURCE Kenshoo
