Merkle is pleased to announce the release of our Digital Marketing Report for Q2 2020. This is the 35th edition of our quarterly report on digital advertising trends, which covers paid and organic search, paid social, shopping ads, and display, with insights into major platforms including Google, Facebook, Instagram, and Amazon.
Download the latest Merkle Digital Marketing Report here.
Below are some high-level findings from the report's executive summary:
With offline commerce limited by government restrictions and consumer caution in Q2, many industries saw a sharp increase in online traffic and ad clicks across digital channels. However, advertisers were generally not willing, or able, to pay as much per click in Q2, and average CPCs fell nearly across the board.
Online retail was a relative bright spot for the quarter, but even retailers saw Google search CPCs fall 22% Y/Y in Q2. Notably, Amazon had paused its Google search ads entirely in March as it struggled to handle surging demand. It remained out of Google auctions for a full 12 weeks before coming back in mid-June.
Most retailers did keep Google ads running in Q2, but they faced lower competition, their own logistical difficulties in fulfilling orders, and a sharp decline in the offline orders that their digital ads helped produce – all factors that depressed CPCs for Google, and other digital ad platforms.
All told, Merkle saw Google search spend rise 9% Y/Y in Q2 2020, but that was bolstered by 11% growth for retail and ecommerce advertisers. Not surprisingly, though, the travel industry slashed ad budgets in the early days of the pandemic, and while travel spend on Google gained back some ground over Q2, it was still down 47% Y/Y for the full quarter.
Spending on Facebook, excluding Instagram, was up 4% Y/Y in Q2 2020 as impressions jumped 25%, but average CPM fell 17%. Instagram continued to see stronger spending growth than Facebook, helping to drive up total spending growth across both platforms. Most brands paused Facebook ads on Blackout Tuesday in support of racial justice and the Black Lives Matter movement, but were active in July.
For the first time since Q2 2019, spending growth for Amazon ads decelerated from the prior quarter. Spending on Sponsored Products ads rose 22% Y/Y in Q2 2020, down from 67% growth in Q1. Click and sales growth for Amazon’s ads remained robust, but, as with other channels, ad pricing was significantly weaker.
In addition to the fulfillment difficulties Amazon itself faced in the wake of pandemic, many Amazon advertisers faced their own supply chain and inventory challenges in Q2. This put a damper on average CPC for Amazon ads, even as consumers were turning to ecommerce for a significantly larger share of their retail purchases.
For more details on these findings, please download the latest Merkle Digital Marketing Report here.
