Digital Marketing Snapshot

Skai Quarterly Trends Infographic

Commerce leads the way to quarter-over-quarter digital media spending growth

Ad spending in retail media, paid search and paid social grew from Q2 to Q3, with every channel seeing its strongest spending month of 2023 during the third quarter.
WHAT YOU NEED TO KNOW
FOCUS ON COMMERCE
CORE TRENDS
WHAT YOU NEED TO KNOW
Quarter-over-quarter (QoQ) spending grew 9% for retail media, 3% in paid search and 28% in paid social. Spending in Q3 also exceeded that of the first quarter of 2023 in each of these channels.
Increases in ad prices are a key factor in understanding spending growth throughout 2023, and are likely to continue through the end of the year.
Year-over-year (YoY) spending accelerated from +3% to +5% in paid search, while retail media extended its run of robust growth rates at +34%. At -3%, social YoY spending was a clear outlier to overall social market trends.
There is a clear divergence in our data between growth rates of social campaigns based on objectives, suggesting a stronger social rebound for upper- and mid-funnel activity.
STRONG SEQUENTIAL SPENDING GROWTH ACROSS CHANNELS
Quarter-over-quarter (QoQ) spending grew 9% for retail media, 3% in paid search and 28% in paid social. Spending in Q3 also exceeded that of the first quarter of 2023 in each of these channels.
CONSUMER DEMAND, HIGHER PRICES DRIVE YTD GROWTH
Increases in ad prices are a key factor in understanding spending growth throughout 2023, and are likely to continue through the end of the year.
HEALTHY OVERALL OUTLOOK FOR AD SPENDING
Year-over-year (YoY) spending accelerated from +3% to +5% in paid search, while retail media extended its run of robust growth rates at +34%. At -3%, social YoY spending was a clear outlier to overall social market trends.
SOCIAL SPENDING GROWS UP THE FUNNEL
There is a clear divergence in our data between growth rates of social campaigns based on objectives, suggesting a stronger social rebound for upper- and mid-funnel activity.
FOCUS ON COMMERCE

COMMERCE YOY SPENDING GROWTH ACROSS CHANNELS

Key commerce segments in retail media, paid search and paid social all showed YoY increases in spending levels.

PRODUCT AD PRICES CONTINUE TO SURGE

While retail media and paid search CPC grew more slowly than last quarter, paid social CPM surged for product ads.

AMAZON PRIME BIG DEAL DAYS PROVIDE LIFT

Spending, CPC and sales revenue all spiked over the previous 30-day average, but not quite as much as for the July event
CORE TRENDS

Social Trends

Paid social advertising is showing a clear split between upper- and lower-funnel activity.
While upper- and mid-funnel campaigns showed double-digit YoY growth, lower-funnel campaigns on Skai were flat to slightly down, bringing overall spending down 3%.
Impressions
QoQ
+16%
YoY
+16%
Clicks
QoQ
+25%
YoY
+19%
Spending
QoQ
+28%
YoY
-3%
CTR
QoQ
+7%
YoY
+3%
CPM
QoQ
+10%
YoY
-16%

Search Trends

Search spending grew 5% year-over-year.
Spending growth was higher for search programs targeting revenue—driven in part by adoption of Performance Max campaigns—but also for a small segment maximizing impressions and impression share.
Impressions
QoQ
-12%
YoY
-12%
Clicks
QoQ
-4%
YoY
+2%
Spending
QoQ
+3%
YoY
+5%
CTR
QoQ
+10%
YoY
+16%
CPC
QoQ
+7%
YoY
+4%

Retail Media Trends

More clicks and higher click prices yielded strong spending growth in the retail media channel.
Total spend for retail media increased 35% over Q3 of last year, equaling the YoY growth rate from last quarter.
Impressions
QoQ
+6%
YoY
+8%
Clicks
QoQ
+3%
YoY
+12%
Spending
QoQ
+9%
YoY
+34%
CTR
QoQ
-2%
YoY
+3%
CPC
QoQ
+6%
YoY
+20%

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.