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Key Takeaways from the Skai Q1 2021 Quarterly Trends Report

, Senior Director of Marketing Research @ Skai™

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Digital marketers finished strong in 2020. 

The results were clear. Online publishers, one after another, reported better results than expected. We witnessed levels of growth that we had not seen in quite some time. In a year filled with uncertainty, it gave us a sense that, at least in our little corner of the universe, we were righting the ship. 

There were many factors. Budgets that were deferred from earlier in the pandemic needed to be spent. Audiences were ready to engage online. The holidays. The election. And underlying it all, a migration to shopping online that has been described as compressing years of growth into months. 

Now, with the first three months of 2021 complete, we can start to see just how steady that path is and how durable the growth. The fourth quarter provides momentum going into a new calendar year, and the open question is always just how much of that momentum will continue to affect spending across industries and digital marketing channels. 

How to access Skai’s quarterly trends report, charts, and analysis

This edition of the Skai Quarterly Trends Report for Q1 2021 is drawn from an overall population of nearly $7B in annualized marketer spend, over 800 billion 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.

Key Q1 2021 Channel Trends

Retail Media Advertising

  • 74% YoY Spending Growth. Another strong quarter for Retail Media spending, with new retailers compensating for a lack of key events
  • 89% Amazon Share of Spend in Q1. The universe is starting to expand beyond the retail giant, which comprised 98% of spending a year ago

With so much of the story coming from online commerce this quarter, we start with the channel at the center of that universe. Coming off of such a strong Q4, it would be reasonable to expect ad spending across Retail Media networks to soften. Not only was there a very online holiday season last quarter, but the rescheduled Prime Day provided additional lift, and there were no comparable shopping events this quarter.

 

Q1 2021 Quarterly Trends

Paid Search

  • 46% YoY Spending Growth. A “perfect storm” of conditions drove record growth for paid search advertising dollars. 
  • 42% Increase in Keyword Clicks. As was the case in Q4, higher clickthrough rates for non-shopping search ads drove significantly more clicks YoY despite flat impression volume. 

Total paid search spending was particularly strong in the second half of last year, and that momentum clearly carried over into 2021. Marketers increased their investment in the channel by nearly half in Q1 as shopping campaigns continued to reach more shoppers and keywords continued to drive more clicks

Q1 2021 Quarterly Trends

Social Advertising

  • 32% YoY Spending Growth. With the holidays and the election behind us, year-over-year spending grew slightly less than last quarter
  • 67% of Q1 Facebook Spend uses CBO. Two out of three Facebook ad dollars were managed using Campaign Budget Optimization (CBO) in Q1, with spending in this segment growing 77% year-over-year

For social advertising, the dominant theme in 2020 was volatility. Advertisers generally have more control over spending levels in this channel compared to Search or Retail Media, in that they are more empowered to turn campaigns on or off when pressed to do so. In contrast, dollars aren’t spent in the other channels until someone exhibits a certain behavior like a related search or a click, so spending is more tied to consumer behavior. So, we saw Social advertisers explicitly pull back during times of uncertainty and unrest in 2020, more so than in previous years without such external pressures.

Q1 2021 Quarterly Trends

Learn more about digital advertising’s Q1 2021 Quarterly 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:

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