As we approach the third and fourth quarters of 2018, I thought it would be a good time to take a quick look at some of the most relevant digital marketing statistics for the past 12 months. If anything, it’s always a good reminder of where the global advertising dollars are going and what trends we can anticipate for the future. That road side billboard will soon be tracking us too…
Merkle’s Q4 DMR is the service that we typically refer to for this type of information. Although they provide stats on all channels, from search engines (AdWords, Bing, Yahoo!) to most social media platforms (Facebook, Instagram, Twitter, Pinterest, etc.) for our purposes, we’re just highlighting facts and figures related to paid search and paid social campaigns.
Paid Search
- Across all search platforms, ad spend grew 24% year-over-year in Q4 of 2017, up from 22% growth in Q3. On AdWords alone, year-over-year search ad spend grew 23%.
- Cross-device conversions provided a 12% lift to total online Google search ad conversions attributed to mobile devices in Q4, roughly double the rate for desktops.
- Average cost per click (CPC) on the Google Search Network spiked 14% in Q4: although the quality of search results has also improved, advertisers are seeing their budgets consumed faster now. (paid social has experienced a similar trend, see below)
- CPCs for branded keywords on Google fell 13% year-over-year in Q3, but spiked back up 23% in Q4. Never quit bidding on your own branded terms or your competitors will!
- Minimum first page bids for non-brand keywords rose as much as 23% year-over-year in Q4.
- The average revenue per click produced by a non-brand Google search ad on desktop improved nearly 20% year-over-year in Q4 2017. To put that into perspective, Q4 2016 posted just 3% year-over-year growth in average revenue per non-branded click.
- Overall click volume on the Google Search Network in Q4 grew 9% year-over-year.
- Google search ad spending grew 23% overall year-over-year. Shopping ads grew 32%, while text ad spending rose a 15%.
- In Q4, Google Search Ad spend allocated explicitly to mobile devices grew 38% year over year; desktop spend grew 21%.
- Google’s Customer Match, RLSA, and “similar audiences” products accounted for 30% of Google search ad clicks in Q4 2017, up 10 points from Q4 2016.
- Mobile devices produced 55% of Google search ad clicks in Q4 2017, but just 14% of Bing ads clicks.
MGR Takeaways
Digital marketing spend as it relates to paid search campaigns surely took an upward turn in 2017. This means that more advertising are shifting their budgets from traditional media (print, radio and even TV) to digital marketing. This in turn, increases competition for the same ad space (read: bid amounts) which results in higher costs.
On the positive side, Google’s improved search algorithms are also providing a more accurate experience and better ROI for all advertisers. Ad costs have increased but ad revenues have also increased and your ad clicks are working better than ever before.
As mentioned in a previous article, AdWords intent-based search is search’s greatest advantage and advertisers are becoming savvier by targeting specific audience groups that fit their particular user demographic. Cross-platform targeting has become a huge goal in 2018. Combining social media audiences (interest-based) with paid search audiences (intent-based) will be the key into getting the most our of your campaigns in the coming months.
Paid Social
- 82% of all paid social advertising investment was spent on Facebook in Q4.
- Facebook ads in the News Feed boasted an average CTR of 1.2%, more than 4x that of right rail ads.
- Ad spend on Facebook increased 20% year-over-year in Q4.
- 83% of all Facebook ad spend in Q4 went to ads served on mobile devices and tablets.
- Facebook Spend growth decelerated in Q4, posting just 20% year-over-year growth. This is in stark contrast to the rest of the year, in which ad spend posted growth of more than 40%.
- Facebook ad impressions declined 27% year-over-year-in Q4. That being said, ad spend on Facebook in Q4 increased 20% year-over-year.
- The average cost per click for Facebook ads in Q4, regardless of placement, increased 36% year-over-year. Once again, just like with paid search, the cost of advertising keeps increasing as more players decide to join in!
- Instagram accounted for 8% of paid social ad spend in Q4; Pinterest took 7% of the budget share.
- Instagram saw significant growth in both inventory (number of available ad types and frequency of placements) and cost, leading to a 122% increase in ad spend year-over-year. Think of Instagram as Facebook 4-5 years ago. The time to advertise on Instagram is NOW, while it is tremendously under priced.
- Instagram boasted a 99% year-over-year increase in impressions in Q4; CPCs rose 77%.
- Twitter seems to be rising for their near death, showing a 44% year-over-year increase in ad spend. Twitter also posted year-over-year growth in both impressions (12%) and CPCs (15%) in Q4.
MGR Takeaways
If you remotely follow MGR’s podcast, blogs, Alexa briefings or any other marketing content that we put out on a regular basis, you already know our opinion about paid social campaigns.
In a nutshell, if you’re not actively advertising at least on Facebook and Instagram, you’re in for a crude reality check in the vary near future… meaning today! This is one of those situations when you cannot afford not to be there.
As far as CPM, yes, I too remember when I used to add $5 to ‘boost a post’ and see some sort of new “Likes” on our pages. But those days are way gone now. Facebook’s CPM just 12 months ago was around $6; today is closer to $12, but still far behind paid search… for now. Likewise, Instagram’s CPM today is around $5, that’s what I mean by saying that it is grossly under priced… Why wait to advertise at $10 CPM in a couple of years when you can get the same results today for half the price?
Paid social offers a LOT of possibilities to advertisers. It’s also a constant moving target with continuous updates and tweaks that will drive everyone crazy. But if you find an agency that understands how the game is played, you will be the winner in the long run.
Thank you for reading. Until next time, this is Manuel Gil del Real (MGR)
Sources: Merkle, WordStream
Photo by Gavin Allanwood on Unsplash
