Digital Marketing Snapshot

2021 Fourth Quarter Spending Growth Reflects Impact of Pandemic on 2020

While the overall number of ads seen by consumers did not expand, brands were more competitive across ad prices, pushing overall investment higher than the extraordinary spike of one year ago.
WHAT YOU NEED TO KNOW
FOCUS ON COMMERCE
CORE TRENDS
WHAT YOU NEED TO KNOW
Year-over-year spending increases in Q4 were more modest compared to the extraordinary growth from that period in 2020.
Price increases played the largest role in spending growth for paid social advertising, followed by paid search and then retail media, where click volume contributed nearly as much.
While direct response objectives still dominate, campaigns that are focused more on branding are growing the fastest across Facebook.
Search campaigns that optimized for Cost Per Action (CPA) were a key driver of overall search growth, with spending increasing 65% year-over-year and CPC rising by 52%.
GROWTH SLOWS BUT CONTINUES IN Q4
Year-over-year spending increases in Q4 were more modest compared to the extraordinary growth from that period in 2020.
AD PRICES FACTOR INTO SPENDING INCREASES
Price increases played the largest role in spending growth for paid social advertising, followed by paid search and then retail media, where click volume contributed nearly as much.
SOCIAL ADS EXPAND ACROSS CONVERSION FUNNEL
While direct response objectives still dominate, campaigns that are focused more on branding are growing the fastest across Facebook.
SEARCH ADVERTISERS ZERO IN ON CONVERSION METRICS
Search campaigns that optimized for Cost Per Action (CPA) were a key driver of overall search growth, with spending increasing 65% year-over-year and CPC rising by 52%.
FOCUS ON COMMERCE

HOLIDAY 2021

"Commerce advertisers" are any advertisers promoting the sale of physical goods. Ad spending for this segment increased for the holiday season, with paid search showing the most robust growth over last year.

COMMERCE SPENDING GROWTH

Annual growth and unit pricing increases for commerce advertisers was remarkably consistent across channels.

SHOPPING AD SHARE

The share of spending from shopping ads for commerce advertisers picked up from Q3 in both paid search and paid social, but was lower than Q4 last year in both cases.
CORE TRENDS

Social Trends

Social spending grew 14% year-over-year as some advertisers shifted budget to lower-cost branding campaigns.
Cost per thousand impressions (CPM) jumped from Q3 to Q4 as commerce advertisers looked to attract holiday shoppers.
Impressions
QoQ
+2%
YoY
-6%
Clicks
QoQ
+8%
YoY
-8%
Spending
QoQ
+24%
YoY
+14%
CTR
QoQ
+5%
YoY
-2%
CPM
QoQ
+21%
YoY
+22%

Search Trends

Seasonality helped drive spending up across paid search compared to last quarter
Non-commerce advertisers and increasing CPCs were a key factor in overall expenditures rising 23% over last year.
Impressions
QoQ
+39%
YoY
+1%
Clicks
QoQ
+30%
YoY
0%
Spending
QoQ
+28%
YoY
+23%
CTR
QoQ
-6%
YoY
0%
CPC
QoQ
-1%
YoY
+23%

Retail Media Trends

Spending growth on retail media came back down to earth after occupying the stratosphere for most of 2020.
Impressions shrank year-over-year, possibly hinting at changes in online shopping behavior in the face of inflationary and supply chain pressures.
Impressions
QoQ
+23%
YoY
-8%
Clicks
QoQ
+23%
YoY
+9%
Spending
QoQ
+29%
YoY
+23%
CTR
QoQ
0%
YoY
+17%
CPC
QoQ
+4%
YoY
+13%

View reports from previous quarters:

Methodology

Analysis is drawn from a population of approximately $7B in advertising spend, comprising over 3,000 advertiser and agency accounts across 40 vertical industries and over 150 countries running on the Skai 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. Some additional outliers have been excluded. Ad spending and pricing have been translated to USD at the time the spending was incurred.

For charts showing impressions, clicks and spending, volume metrics have been normalized to a factor of 1 based on the initial volume for the first quarter of data. Data points from subsequent quarters are based on a multiplier from the first quarter. For example, 1.6 means that volume is 60% greater than volume on the initial quarter measured.

Note: There may be variation in numbers for past or future research published by Skai as the rolling data set is dynamic for each new quarter.