Ad prices continue to drop while clicks and impressions grow

May 2, 2023 – San Francisco, CA – Today, Skai, an omnichannel platform for performance marketing, is publishing its Q1 2023 Digital Marketing Quarterly Trends Infographic, an in-depth analysis of the digital marketing trends that defined the first quarter of last year, along with an interactive infographic detailing key analysis. While spending growth continued in several performance channels, overall it slowed in Q1 of 2023 compared to Q4 of 2022, reflecting advertiser caution given uncertainty around the global economy, even while engagement with key digital channels continued to press forward.

Advertisers focus on efficiency

In each channel, the volume of ads either clicked or seen rose, while unit pricing dropped. This behavior implies that while advertisers are still focused on their key digital channels, that doesn’t necessarily mean spending growth. Within channels and publishers, new and improved ad types and campaign strategies are giving marketers greater ability to dial in efficiency for their programs without adding to budgets.

Cautious spending affects growth

Spending growth across channels slowed in Q1 as advertisers continued to tread carefully amid economic uncertainty. Retail media spending grew 30% year-over-year (YoY), paid search outlays increased 4% and paid social budgets shrank by 3%. All of these metrics were down compared to results from Q4 2022. Quarter-over-quarter (QoQ) spending was broadly within post-seasonal expectations, with spending down 14%, 20% and 25% for retail media, paid search and paid social, respectively.

Retail media expanded without sacrificing performance

Even with a 30% increase in spending year-over-year, advertisers are seeing improvement on performance metrics. Return on Ad Spend (ROAS) for the channel improved by 2% YoY, while Cost per Action (CPA) dropped 8%, indicating that despite rapid growth, retail media has not yet reached the point of diminishing returns for advertisers.

Other quarter-over-quarter (QoQ) and YoY findings include:

ChannelMetricQoQ ChangeYoY Change
Retail MediaImpressions-19%+37%
Cost-per-click (CPC)-1%-6%
Paid SearchImpressions-14%+14%
Paid SocialImpressions-7%+35%
Cost per thousand impressions (CPM)-19%-28%

“With the lack of a clear direction up or down from the economy, no one should be surprised that most advertisers are not making big budget moves in any direction,” said Chris Costello, Senior Director of Marketing Research at Skai. “In fact, what we’re seeing across channels is a microcosm of the overall economy, with some segments seeing strong results, particularly around shopping behavior in retail media and paid search, while other areas that are implicitly or explicitly more sensitive to costs and ad prices are contracting.”

For more information and to view the infographic, visit


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, 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, where applicable.

About Skai

Skai (formerly Kenshoo) is a leading omnichannel marketing platform that uniquely connects data and media for informed decisions, high efficiencies, and optimal returns. Its partners include Google, Meta, Amazon Ads, TikTok, Snap, Walmart Connect, Instacart, Roundel, Criteo, CitrusAd, Pinterest, Microsoft, Apple Search Ads, and more. For over 15 years Skai has been trusted by an impressive roster of brands including Pepsico, Michaels, Reckitt, Daimler, LG, and Vodafone. The company is headquartered out of Tel Aviv, with seven international locations, and is backed by Sequoia Capital, Arts Alliance, Tenaya Capital, Bain Capital Ventures, Pitango, and Qumra Capital. Visit for more information.