Skai, an omnichannel platform for performance marketing, is publishing its Q3 2022 Digital Marketing Quarterly Trends Infographic, an in-depth analysis of the digital marketing trends that defined the last quarter (Q3), with a full report to follow next week. Overall, spending increased in retail media, search, and social channels compared to both last quarter and last year, even as the external environment became more challenging.
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Growth trends continue in the third quarter
Spending growth in Q3 was broadly similar to last quarter, despite economic headwinds. Retail media spending increased 45% year over year (YoY) and 3% quarter over quarter (QoQ). Search spending rose 12% YoY and 2% QoQ, while social spending was up 12% YoY and 10% QoQ.
Shopping ad prices adapt to market conditions
In retail media and search shopping campaigns, average cost-per-click (CPC) was down 12% and 20% YoY, respectively. In both cases, key conversion metrics also showed a decline, which implies that bidding algorithms are adapting to lower consumer demand by lowering prices in order to hit cost per action (CPA) or return on ad spend (ROAS) goals.
Social commerce flexes its muscles
Amid the broader market downturn in spending, which was reflected in ad revenue reports from the social media platforms themselves, commerce-focused ads and campaign objectives continued to show positive growth for Skai clients in the shopping and retail space. Shopping ad prices bucked the trend across other channels and increased 14% YoY on a cost per thousand impression (CPM) basis.
“This quarter has been transformative, as key performance media platforms adapt to external changes in the marketplace,” said Chris Costello, Senior Director of Marketing Research at Skai. “The lower ad prices across retail media and the shopping campaign segment of search seem to be a clear response to shoppers buying less, or less often, so the algorithms controlling bid prices have adapted accordingly to hit program goals. All the while, the number of ad impressions and clicks have grown, suggesting shoppers are still out there shopping, but they’re a bit harder to find and a bit harder to convert into customers.
“Meanwhile, shopping ads on social media seem to be way out in front of the overall channel performance, increasing in both price and volume. This may signal increasing confidence in commerce activity as we continue to regain the signals lost when Apple revamped privacy policies last year. A key tenet of omnichannel marketing is understanding how each of these channels behaves across a particular category—such as commerce in this instance—and incorporating those differences into your strategy as a marketer.”