Merkle is happy to announce the release of our Q1 2020 Digital Marketing Report covering paid and organic search, display advertising, and paid social, with trends for major platforms like Google, Facebook, Instagram, YouTube, and Amazon.
Download the latest Merkle Digital Marketing Report here.
Below are some of the highlights from the report, drawn from its executive summary:
As we consider digital marketing trends for Q1 2020, for most brands, mid-March marked a clear boundary between pre and post-COVID-19 results, but exactly how different these periods looked varied considerably depending on the channel, the industry of the advertiser, and other key factors.
For Google search ads, spending grew 11% Y/Y for the full first quarter, a moderate deceleration from 16% growth in Q4 2019. In March, however, growth had fallen to just 4% Y/Y, with travel advertisers cutting their budgets by nearly 80% by the end of the month.
Retailers’ ad spend has held up better for Google search and other digital channels, as ad conversion rates have improved from a larger share of commerce moving online. Retailers have also benefited from Amazon pulling back on, and ultimately shutting down its Google search ads entirely during the first quarter, as it faced challenges keeping up with demand for essential items.
YouTube ad spend growth managed to outpace search ad spend growth for Google in Q1, but many brands had paused their YouTube campaigns entirely before the end of March to focus on more pure direct response tactics, including search.
While retailers across product categories saw a major lift in demand in mid-April as stimulus checks started hitting bank accounts, those selling essential goods have generally seen more favorable results since mid- March. For the full first quarter, site visits produced by organic search fell 15% Y/Y across all brands, but essential retail saw organic visits grow 53% in mid-March. Other retailers saw a 31% decline during the same period, as struggling consumers have had to prioritize their purchases.
Investment in Amazon’s ad platform entered the year on an upswing and spend growth for Amazon Sponsored Products and Sponsored Brands ads accelerated further in Q1, even though ad spend faltered over the last week of March when the typical brand spent half as much money per day on Amazon ads as they did in January.
The challenges Amazon ads faced were a bit different than those for other channels, though, and may be more easily solved. Some advertisers ran into issues with Amazon limiting fulfillment of non-essential products, while others ran low on product inventory or ad budgets after brisk sales earlier in the month.
These issues should subside in Q2 and ad spend investment levels should rebound. Spending growth for Facebook and Instagram ads also accelerated for the full first quarter, but advertisers did see CPMs trend lower in late March as impacts from the COVID-19 crisis escalated. More traditional display ad platforms saw weaker results for the full quarter, with spend growth falling to just 1% Y/Y, compared to 22% growth for paid social.
For more details on these findings, please download the latest Merkle Digital Marketing Report here.
