Digital Marketing Snapshot 2023 Q4
Skai Quarterly Trends Infographic
Ad prices drove continued growth in retail media and paid search while commerce ads boosted paid social investment
Double-digit growth in cost-per-click helped propel robust year-over-year increases in spending for retail media, and modest growth in paid search.
WHAT YOU NEED TO KNOW
The holiday surge drove QoQ spending higher in all channels, with YoY spending up everywhere in Q4 as well, led by retail media at +27%.
Higher conversion rates can lead to higher cost-per-click as algorithms adjust to meet ROAS goals, but the opposite can also be true, where higher CPCs drive better performance.
While still a small share of total spend, the new Advantage Shopping Campaigns+ saw QoQ spending more than double in the format’s first full holiday season as part of a wave of lower-funnel spending on Facebook and Instagram.
Q4 saw a large drop in impressions and clicks in the search channel due in large part to the shift from legacy shopping campaigns to Performance Max.
SPENDING UP ACROSS CHANNELS IN Q4
The holiday surge drove QoQ spending higher in all channels, with YoY spending up everywhere in Q4 as well, led by retail media at +27%.
AD PRICES, CONVERSION RATES UP IN RETAIL MEDIA AND SEARCH
Higher conversion rates can lead to higher cost-per-click as algorithms adjust to meet ROAS goals, but the opposite can also be true, where higher CPCs drive better performance.
RACE TO THE BOTTOM (OF THE FUNNEL)
While still a small share of total spend, the new Advantage Shopping Campaigns+ saw QoQ spending more than double in the format’s first full holiday season as part of a wave of lower-funnel spending on Facebook and Instagram.
SEARCH SHOPPING EVOLUTION
Q4 saw a large drop in impressions and clicks in the search channel due in large part to the shift from legacy shopping campaigns to Performance Max.
FOCUS ON COMMERCE
COMMERCE YOY SPENDING GROWTH ACROSS CHANNELS
Both paid search and paid social commerce media segments outperformed their overall respective channel.
PRODUCT AD PRICING ACROSS CHANNELS
Paid search and paid social ad prices grew from Q3 to Q4, while retail media CPC stayed mostly flat.
COMMERCE AD EXPANSION AND EVOLUTION
Amazon DSP penetration was unchanged since last quarter, while PMAX and ASC+ gained slightly in adoption and share of spend.
HOLIDAY SPENDING FOCUSES ON CYBER 5
Roughly $1 out of every $6 spent between November 1 and December 25 was spent during the Cyber Five, across channels.
CORE TRENDS
Search Trends
Search spending grew 4% year-over-year while impressions and clicks dropped.
Across all metrics, paid search looks more efficient, with fewer impressions, higher clickthrough rate and higher CPC that can be traced back to newer Responsive Search and Performance Max formats.
Impressions
QoQ
+26%
YoY
-15%
Clicks
QoQ
+18%
YoY
-8%
Spending
QoQ
+21%
YoY
+4%
CTR
QoQ
-6%
YoY
+8%
CPC
QoQ
+2%
YoY
+13%
Retail Media Trends
Retail media spending continued to grow faster than search or social.
Expenditures for retail media increased 27% over Q4 of last year, with little variation across segments.
Impressions
QoQ
+22%
YoY
+6%
Clicks
QoQ
+17%
YoY
+10%
Spending
QoQ
+18%
YoY
+27%
CTR
QoQ
-3%
YoY
+5%
CPC
QoQ
+0%
YoY
+16%
Social Trends