Investment in retail media, paid search, and social grew an average of 20% during the biggest shopping period of the year, according to the latest Quarterly Trends Report
January 29, 2024 – San Francisco, CA – Today, Skai, the leading omnichannel advertising platform for commerce media, published its Q4 2024 Digital Marketing Quarterly Trends Report. This comprehensive analysis sheds light on how marketers navigated the most important sales season of the year, revealing notable spending growth across all channels, with retail media in particular enjoying significant increases both quarterly and annually.
Holiday spending defies both gravity and Grinches
Despite predictions that media budgets during the 2024 holiday sales season would be impacted by year-round deals and a late start to Cyber 5, Skai’s exclusive data found a surge in ad spend across retail media, paid search, and paid social in Q4, with all channels reporting an average of 20% growth quarter-over-quarter (QoQ). Marketers leaned heavily on retail media and promotional campaigns, with Amazon-led initiatives jumpstarting sales before Cyber 5 to help offset the shorter period between Thanksgiving and Christmas.
Retail media sleighs the season
In fact, while all channels experienced double-digital growth in spend QoQ, retail media also saw the greatest year-over-year (YoY) increases by far in ad spend (23%), driven primarily by higher click volumes rather than rising costs-per-click. In fact, CPCs were stable at 3%, further enhancing the channel’s value and allowing marketers to maximize returns on their investments.
Paid search and social ad prices remain steady
Though not as flat as retail media, the price of a click on search engines and the price of a thousand impressions on social media sites did not show much difference YoY for the second consecutive quarter. And while prices rose quarter-over-quarter (QoQ) for social, it was not enough to eclipse where those prices were last year. The relative year-over-year stability in ad prices enabled advertisers to amplify their reach without overextending budgets.
Clicks and impressions diverge by channel
Retail media was the only channel that saw significant YoY growth of impressions (+28%) and clicks (+20%), and in an environment where prices were stable, this was a major reason why it was also the only channel to post a larger spending increase. In paid search, standard shopping campaigns saw YoY clicks decline, suggesting that marketers may be shifting more programs to Performance Max. For paid social, the deprecation of the Conversions campaign objective on Meta created an impression deficit that newer campaign management settings and other publishers struggled to fill.
Paid social’s star performer – for now
TikTok continued to excel in driving engagement and ad performance, achieving a 28% YoY increase in ad spending during Q4 2024 and propelling growth for paid social overall. While TikTok’s long-term future in the US is currently unpredictable, the platform’s ability to connect with younger audiences has made it a go-to channel for brands looking to build awareness and foster engagement during the Q4 shopping season.
Other quarter-over-quarter (QoQ) and YoY findings include:
Channel | Metric | QoQ Change | YoY Change |
Retail Media | Impressions | +22% | +28% |
Clicks | +15% | +20% | |
Spending | +18% | +23% | |
Cost-per-click (CPC) | +3% | +3% | |
Paid Search | Impressions | +9% | -14% |
Clicks | +18% | 0% | |
Spending | +20% | -2% | |
CPC | +2% | -2% | |
Paid Social | Impressions | +6% | +4% |
Clicks | +15% | +2% | |
Spending | +23% | +2% | |
Cost per thousand impressions (CPM) | +16% | -2% |
“The holiday season will always drive spending across digital marketing. In retail media, the performance and ubiquity of those ads allowed for healthy growth throughout the season, extending to promotional events beyond just the Cyber Five and the direct run-up to Christmas.” said Nich Weinheimer, Executive Vice President of Strategy at Skai. “As for paid search and social, ad inventory patterns seem to be a major reason that Q4 spending didn’t grow at the same rate as in previous years. But now that marketers have become acclimated to offerings like Performance Max and ODAX, they can start to focus more on optimizing and growing their programs in those channels.”
For more information, visit skai.io/digital-marketing-trends/.
Methodology
Analysis is drawn from a population of approximately $8.6 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, Yahoo! Japan, Verizon Media, Amazon Ads, Walmart Connect, 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. Skai makes no claim that these numbers are fully representative of the larger market.
About Skai
Skai is an omnichannel advertising platform, uniquely enabling brands and agencies to run data-driven programs across commerce media. It empowers both media leaders and activation teams to drive impactful results from their advertising program with AI-powered decisioning, activation and optimization solutions. Its partners include Google, Amazon Ads, Microsoft, Walmart Connect, Apple Search Ads, Instacart, Criteo, TikTok, Snap, Pinterest, Meta and more.
For over a decade, Skai has earned trust from notable brands such as Adidas, DoorDash, Sony, Philips, and L’Oreal. Renowned for innovation and a values-driven culture, Skai is headquartered in San Francisco and has eight international locations.
Visit skai.io for more information about Skai.