It has now been over a year since the onset of COVID-19. The impact has been wide-ranging, both across society at large and across marketing and commerce.
The recovery of digital advertising has led to impressive growth numbers for the major online platforms in Q4 2020 and Q1 2021, and as we hit the first anniversary of what was probably the worst month for advertising from last year in April, that growth has continued and even improved.
But what does this spending growth mean for brands?
Are ad prices going up, and if so, why? How can the agile marketer navigate these trends to maximize the impact of their programs in an environment that is still changing as we emerge from a once-in-a-lifetime pandemic while simultaneously negotiating with evolving data privacy rules and policies?
This edition of the Skai Quarterly Trends Report for Q2 2021 is drawn from an overall population of over $7B in marketer spend, 1 trillion ad impressions, and 12 billion clicks. As one of the most well-respected datasets by those who follow advertising performance, it includes unique insights about what’s happening in the digital advertising industry on a macro level.
How to access Skai’s quarterly trends report, charts, and analysis
- Download the report to learn more about what happened in Q2 and the implications for marketers.
- Visit the Quarterly Trends Research Hub for even more in-depth analysis and access to previous reports.
- Check out the QTR interactive infographic where you can explore the numbers yourself for more granular insights.
Key Channel Trends
How did digital advertising’s three biggest channels grow in Q2 2021?
Retail Media Advertising
- 55% YoY Spending Growth. Investment in Retail Media ads was still very strong, albeit not as strong as Q1. Prime Day provided an extra boost
- 4.1x Spending on Prime Day. Amazon Prime Day saw average daily spending increase by over 300% compared to an average day in June
At this point last year, a great deal of shopping behavior had already moved online, and advertisers shifted budgets accordingly. Now, we are past the anniversary of that shift, and so year-over-year comparisons get a little tighter. Total spending across Retail Media ads grew 19% over last quarter which translates to a 55% increase over the same quarter last year.
- Search spending smashes records. After a record-high growth rate last quarter, Paid Search budgets continued to surge, especially when compared to depressed levels from the worst part of the pandemic last year, at least in terms of ad spending
- Clicks cost more in Q2 than last quarter and last year. The average price of a Paid Search click rose 17% vs Q1 and 34% vs Q2 of last year, marking a return to pre-pandemic levels
We have been tracking the “perfect storm” that has led to increased levels of investment across Paid Search advertisers since July of last year, and that growth may have hit its maximum point during the second quarter. As the fundamentals that drove that increase— higher clickthrough rates, breakout categories, and increasing importance to the online shopping universe—combined with the severe reductions in spending levels last year at this time, it is not entirely surprising that budgets have risen by this much.
- Social spending continues to rebound. Total investment in Social Advertising rose 41% over the same period last year
- Flat impressions and rising prices. As advertisers grapple with changes in how they purchase audiences on social media networks, one outcome is that they are paying higher prices for about the same number of impressions as last year
Total spending from social advertisers grew 41% year-over-year even as impressions remained flat and clicks were slightly down. This may reflect the impact of Apple iOS 14.5, which rolled out in April, and changed marketers’ ability to track ad effectiveness.
Learn more about digital advertising’s Q2 2021 metrics and trends
This post is just a brief digest of the benchmarks and analyses we have for you. You have many ways to go deeper into the numbers:
- Download the Skai Q2 2021 Quarterly Trends Report
- Visit the Quarterly Trends Research Hub
- Check out the QTR interactive infographic