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January 27, 2022 – San Francisco, CA – Today, Skai, — a leading commerce intelligence platform — is publishing its Q4 2021 Digital Marketing Quarterly Trends Infographic, an in-depth analysis of the digital marketing trends that defined the last quarter (Q4), with a full report to follow next week. Overall, spending growth reflects just how out of the ordinary things were in Q4 of 2020, at the height of pandemic-fueled disruption of the online advertising industry.

Paid search leads holiday charge
Spending from commerce advertisers between November 1 and December 25 grew compared to the same period last year across digital ad channels. Paid search spending grew 19%, emphasizing its vital role in directing traffic to an expanding universe of online retailers. Retail media advertising outlays increased 14% and paid social rose 11%.

Growth slows but continues in Q4
With Q4 of 2020 representing a peak in the impact of the pandemic on digital advertising and online shopping in particular, spending increases over those numbers were more modest. Retail media and paid search both eclipsed last year’s spending levels by 23%, while paid social grew 14%.

Ad prices factor into spending increases
The cost per thousand impressions increased 22% compared to last year for paid social ads, growing faster than total expenditures and emphasizing increased competition for holiday shoppers. Paid search saw the cost of a click increase by the same percentage as spend, rising by 23%, while retail media prices only grew 13%, with increased click volume making up the rest of the spending gains in that channel.

Social campaigns shift to address the full conversion funnel
While direct response objectives still dominate, campaigns that are focused more on branding are growing the fastest across Facebook as advertisers tune their programs in response to increasing privacy restrictions on ad targeting and measurement. Traffic, reach, and video views were the campaign objectives seeing the most spending growth year-over-year.

Search advertisers zero in on conversion metrics
Particularly among non-commerce advertisers where a conversion is not purely transactional, paid search programs that were optimized for acquisition cost saw big increases in both ad prices and spending.

Other findings include:

  • Retail media impressions were up 23% quarter-over-quarter (QoQ) and down 8% year-over-year YoY
  • Retail media clicks rose 23% QoQ and grew 9% YoY
  • Retail media CPC grew 4% QoQ and increased 13% YoY
  • Paid search impressions increased 39% QoQ and rose 1% YoY
  • Paid search clicks rose 30% QoQ and were flat YoY
  • Paid search CPC dipped 1% QoQ and rose 23% YoY
  • Paid social impressions grew 2% QoQ and dropped 6% YoY
  • Paid social clicks increased 8% QoQ and were down 8% YoY
  • Paid social CPM rose 21% QoQ and increased 22% YoY

“We knew that the fourth quarter last year was exceptional, and now we’re seeing just how much that was the case, in terms of overall volume” said Chris Costello, Senior Director of Marketing Research for Skai. “Now we’re seeing how advertisers parlay that rapid growth into something more sustainable by tuning their approach in the face of evolving shopping patterns, increased emphasis on algorithmic bidding, and the ever-changing privacy landscape. If anything, these channels are reinforcing their fundamental strengths in the traditional conversion funnel, which then reinforces the connections between them.”

Analysis is drawn from a population of approximately $7 billion in advertising spend, 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, Apple Search Ads, Pinterest, Snapchat, Facebook, Instagram and the Facebook Audience Network. 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 is an intelligent marketing platform that powers brand insights, decisions and digital marketing execution for faster, more predictable business growth. Skai’s platform includes a suite of data-driven products for market intelligence, media activation, testing and measurement, enabling product, insights and marketing teams to accurately plan strategies and benefit from connected omnichannel launches. Skai is trusted by an impressive roster of global brands including Procter & Gamble, PepsiCo, Estée Lauder, Nestle, Johnson & Johnson, Mars and others. With its expanded product suite, Skai is unifying commerce data and helping brands better understand their consumers in real-time. It has seven international locations and is backed by Sequoia Capital, Arts Alliance, Tenaya Capital, Bain Capital Ventures, Pitango and Qumra Capital.

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