Today, Skai, a leading omnichannel platform for performance marketing, published its Q3 2023 Digital Marketing Quarterly Trends Report, an in-depth analysis of the digital marketing trends that defined the second quarter of this year, along with an interactive infographic detailing key analysis. Spending levels in 2023 have risen nearly every quarter in every channel of the analysis, driving year-over-year (YoY) spending higher in some cases.
Strong sequential spending growth across channels
Quarter-over-quarter (QoQ) spending grew 10% for retail media, 3% in paid search and 27% in paid social. Spending in Q3 also exceeded that of the first quarter of 2023 in each of these channels.
Increasing consumer demand and higher prices drive YTD growth
Since Q1, retail media CPC is up 14%, paid search CPC has increased 18% and paid social CPM rose 8%. These increases in ad prices are a key factor in understanding spending growth throughout 2023 and are likely to continue through the end of the year as the holiday season builds on increasing consumer confidence, competition between advertisers and relatively low prices in 2022.
Healthy overall outlook for ad spending
Year-over-year (YoY) spending accelerated from +3% to +5% in paid search, while retail media extended its run of robust growth rates at +34%. Short-term growth and increased spending in key segments reinforced the consensus opinion of a rebound in paid social advertising, even as YoY spending growth of -3% in the channel was a clear outlier to the overall market trend.
Social spending grows up the funnel
There is a clear split in our data between growth rates of social campaigns based on program objectives. Upper-funnel tactics like branding and awareness increased spending by 13%, and mid-funnel objectives like post engagement were up 12%. These segments are shown to be heavier users of video ads and Reels placements.
Other QoQ and YoY findings include:
|
Channel |
Metric |
QoQ Change |
YoY Change |
|
Retail Media |
Impressions |
+6 % |
+9 % |
|
Clicks |
+3 % |
+12 % |
|
|
CPC |
+6 % |
+21 % |
|
|
Paid Search |
Impressions |
-12 % |
-12 % |
|
Clicks |
-4 % |
+2 % |
|
|
CPC |
+7 % |
+4 % |
|
|
Paid Social |
Impressions |
+16 % |
+16 % |
|
Clicks |
+25 % |
+19 % |
|
|
CPM |
+10 % |
-16 % |
“So far 2023 has been remarkably consistent in that advertisers are continuing to grow spending in the key walled garden publishers from month to month and from quarter to quarter. In Q3, it looks like the positive spending trends in retail media and paid search earlier in the year spilled fully into paid social,” said Chris Costello, Senior Director of Marketing Research at Skai. “In particular, when we look at commerce advertising through a more omnichannel lens–which is to say one that is inclusive of relevant publishers beyond just retailers–social spending seems to have fully flipped the switch going into the second half and the holiday period once the growth in those other channels was fully recognized.”
For more information and to view the infographic, visit skai.io/digital-marketing-trends/.
Methodology
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. Skai makes no claim that these numbers are fully representative of the larger market.
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