Digital Marketing Snapshot 2023 Q1

The overall trend of more ads at lower prices continued into the first quarter of 2023

This can be interpreted as advertisers taking a more cautious approach amid economic uncertainty, one which focuses on optimization and efficiency rather than growth
WHAT YOU NEED TO KNOW
FOCUS ON COMMERCE
CORE TRENDS
WHAT YOU NEED TO KNOW
In each channel, the volume of ads clicked or seen rose, while unit pricing dropped, indicating continued engagement with digital ad programs.
Spending growth across channels slowed in Q1 as advertisers continued to tread carefully amid economic uncertainty.
Search spend fell into three main buckets based on strategy, and revenue-based strategies showed robust growth.
Spending on the more traditional page post link ads grew by double digits year-over-year, while newer, more complex ads were flat.
FOCUS ON EFFICIENCY
In each channel, the volume of ads clicked or seen rose, while unit pricing dropped, indicating continued engagement with digital ad programs.
CAUTIOUS SPENDING AFFECTS GROWTH
Spending growth across channels slowed in Q1 as advertisers continued to tread carefully amid economic uncertainty.
REVENUE-BASED STRATEGIES DRIVE SEARCH SPENDING
Search spend fell into three main buckets based on strategy, and revenue-based strategies showed robust growth.
SOCIAL SPENDING DIFFERS BY AD TYPE
Spending on the more traditional page post link ads grew by double digits year-over-year, while newer, more complex ads were flat.
FOCUS ON COMMERCE

RETAIL MEDIA EXPANDS WITHOUT SACRIFICING PERFORMANCE

Even with a 30% increase in spending year-over-year, advertisers are seeing improvement on performance metrics.

COMMERCE SPENDING GROWTH ACROSS CHANNELS

Relative strength in commerce spend across retail media and search may cast doubt on social advertisers' assumptions about receptiveness of a shopping audience.

PRODUCT AD PRICING ACROSS CHANNELS

Paid search and social gave back seasonal price premiums compared to last quarter, with disinvestment adding to social QoQ price drops. Softer consumer demand may have also contributed to YoY changes.
CORE TRENDS

Social Trends

Multiple factors are providing both headwinds and tailwinds for paid social spending.
Once again, CPM dropped year-over-year while impression volume grew, but the latter was not enough to yield positive spending growth.
Impressions
QoQ
-7%
YoY
+35%
Clicks
QoQ
-20%
YoY
+19%
Spending
QoQ
-25%
YoY
-3%
CTR
QoQ
-14%
YoY
-12%
CPM
QoQ
-19%
YoY
-28%

Search Trends

Paid search spending grew 4% year-over-year, even as average cost-per-click dropped 9%.
Campaigns that optimized towards revenue goals grew faster than the rest of search, while campaigns that focused on costs shrank.
Impressions
QoQ
-14%
YoY
+14%
Clicks
QoQ
-14%
YoY
+14%
Spending
QoQ
-20%
YoY
+4%
CTR
QoQ
+1%
YoY
0%
CPC
QoQ
-7%
YoY
-9%

Retail Media Trends

Retail media continued to grow faster than either paid search or paid social, with spending up 30% YoY.
Performance metrics have held steady or even improved during that time.
Impressions
QoQ
-19%
YoY
+37%
Clicks
QoQ
-13%
YoY
+38%
Spending
QoQ
-14%
YoY
+30%
CTR
QoQ
+8%
YoY
+3%
CPC
QoQ
-1%
YoY
-6%

View reports from previous quarters:

Methodology

Analysis is drawn from a population of approximately $9 billion in advertising spend over five quarters, comprising more than 3,000 advertiser and agency accounts across 40 vertical industries and more than 150 countries running on the Skai platform on Google, Microsoft, Baidu, Yandex, Yahoo! Japan, Verizon Media, Amazon, Walmart, Instacart, Criteo, Kroger, Apple Search Ads, Pinterest, Snapchat, Facebook and Instagram.

Except where noted, analysis is based on Skai advertisers with 15 consecutive months of performance data. 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.