Chris "Coz" Costello, Senior Director of Marketing Research @ Skai
Spending and Pricing Trends Across Paid Search, Social Advertising, and Retail Media
Advertisers are already starting to adjust their strategies in how they balance ad price and ad volume, while maintaining a somewhat cautious approach to kick off 2023.
After ad prices declined across much of last year, February saw a slight rebound in pricing across all Skai-supported channels, while average daily spending held mostly steady, resulting in an overall decrease in volume due to the short month. Average CPC for retail media and paid search in February increased by 3% and 7% over January, respectively, while average CPM for paid social ads grew by 9%.
While prices went up, ad volumes went down, resulting in month-over-month decreases in total spending of 7% for retail media, 10% for paid search and 11% for paid social. However, when we factor in the number of days in February vs January, average daily spending actually gained 3% for retail media, was flat for paid search, and declined just 1% for paid social.
How do you measure up? Check out these benchmarks to see if your programs are on par with your industry peers or if you’re ahead or behind the curve.
This is a continuation of our monthly paid media snapshot series. As with any benchmark, your mileage may vary, but we hope this provides a bit more context for you as a marketer as you navigate the ups and downs of your program’s performance.
Monthly Paid Media Spend Snapshot – February 2023
Methodology: For these benchmarks, only Skai accounts with spend above a minimum threshold for the previous three months are included.
Starting with the January 2023 release, spending be nchmarks will primarily focus on total monthly spend to ensure consistency across chart segments. Please note that the selection criteria used here are different from the Skai Quarterly Trends Report, and as a result may not be consistent with those results in all cases.
How to read these charts
Accounts are divided into four segments based on increases or decreases of at least 5% in monthly spending and CPC for retail media and paid search or CPM for paid social. Those segments are then plotted on a bubble chart where the x-axis represents the month-over-month (MoM) percent change in pricing for that segment, and the y-axis is the MoM percent change in total spending. Bubble size represents the percent of total Skai accounts.
The diagonal line indicates spending changes that are completely described by the change in pricing. Bubbles above the diagonal mean that ad volume—clicks for retail media and paid search, impressions for paid social—grew faster than pricing, while bubbles below the diagonal mean that volume grew slower.
Paid Search
Overall paid search spending decreased 10% in February, while average CPC increased 7%. Average spending per day was flat.
- 27% of search accounts spent more in February than January compared to 46% who spent less, and the average price of a click increased for 50% of accounts and decreased for 23%, with the remaining share for each metric seeing no change.
- The largest segment was where both spend and CPC increased, which comprised 19% of all paid search accounts in the analysis.
Social Advertising
Overall paid social spending dropped 11% in February, while average CPM grew 9%. Average spending per day dipped 1%.
- 35% of social accounts spent more in February than January compared to 49% who spent less, and the average price of one thousand impressions increased for 65% of accounts and decreased for 21%, with the remaining share for each metric seeing no change.
- The largest segment was accounts where spend decreased but CPM increased, which comprised 30% of all paid social accounts in the analysis.
Retail Media
Overall retail media spending decreased by 7% in February, while average CPC increased by 3%. Average spending per day rose by 3%.
- 31% of retail media accounts spent more in February than in January compared to 51% who spent less, and the average price of a click increased for 38% of accounts and decreased by 24%, with the remaining share for each metric seeing no change.
- Of the segments displayed on the chart, the largest were accounts where both spend and CPC increased, which comprised 18% of all retail media accounts in the analysis.
Check out more resources from Skai
Come back next month for the most up-to-date data. Until then, you can dive into more of our research via our Quarterly Trends Reports hub.
And please visit the Skai blog and Research & Reports page for ongoing insights, analysis, and interviews on all things related to digital advertising.
