Merkle (www.merkle.com), a leading technology-enabled, data-driven performance marketing agency, announced the release of its Q2 2017 Digital Marketing Report today. The report analyzes trends across paid search, social media, display, and organic search, while providing highly regarded insights into the performance of major industry players like Google, Facebook, Amazon, and Microsoft. In support of the research findings, Merkle is hosting a complimentary webinar on Wednesday, July 19 at 2:00 p.m. ET.
The Digital Marketing Report (DMR) highlights the continued strength of two of the major digital marketing platforms, as Google search spending growth accelerated to 23% Y/Y and Facebook budgets continued to grow much more rapidly than the online advertising industry as a whole. The research also explores the impact of several key market developments, such as Google’s €2.42 billion fine levied by the European Commission in June, the strength of PLAs, and the mid-quarter change to Google’s Ad Rank calculation.
While mobile continues to be the main engine of spending growth across digital ad platforms, desktop has been pulling more weight for Google in recent quarters. For Facebook, there were no signs of similar renewed strength for desktop traffic, but it didn’t hurt, as overall Facebook spending still grew 56% Y/Y.
Though hit hard in recent years by increased ad loads, organic search visit growth continued to rebound in Q2 2017, growing 1% Y/Y, up from a 4% decline a quarter earlier. For Amazon, its Sponsored Products ad format continues to generate more interest over time, but adoption remains relatively limited compared to Google PLAs.
Notable Q2 2017 highlights include:
- Total search spending rose 20% Y/Y in Q2 2017, up from 15% growth in Q1. CPCs rose 1% in Q2, similar to Q1 growth, but click growth accelerated to 18% Y/Y from 14% in Q1.
- Google search ad spending rose 23% Y/Y in Q2 2017, up from 21% growth in Q1. Click growth accelerated to just under 23%, while CPC growth was steady at less than 1%.
- Bing Ads and Yahoo Gemini combined search ad spending fell 3% Y/Y in Q2 2017, an improvement from a 14% decline in Q1. Bing Product Ad spend growth improved to 11% Y/Y.
- The AdWords Get Location Details click type, which is produced by the Google Maps property, accounted for nearly 7% of brand keyword ad clicks on phones in June 2017, up from 5% a quarter earlier.
Organic Search & Social
- Organic search visits grew 1% Y/Y overall in Q2 2017, up from a 4% decline a quarter earlier. Phone organic search visits grew slightly faster in Q2, at a rate of 15% Y/Y, but most gains came from smaller declines for tablet and desktop.
- Mobile share of organic search visits held steady at 51%, remaining below the share of paid search clicks produced by mobile, which stood at 58% in Q2 2017.
- The share of all site visits produced by social media was 3% in Q2 2017, up from a share of 2.6% a year earlier. On mobile, social continues to have a larger impact on site visits, accounting for 3.7% of traffic from phones and tablets.
Comparison Shopping Engines
- The eBay Commerce Network’s share of all CSE spend from 68% in Q1 to 63% in Q2, as eBay stopped showing its product ads on ebay.com in May.
- Phones and tablets accounted for just 6% of all CSE traffic in Q2, a decline from 9% in Q1.
- Advertisers spent 43% more on Amazon Sponsored Products in Q2 2017 than in Q1, compared to 24% Q/Q growth for Google Shopping spend.
Display and Paid Social
- Facebook ad spend increased 56% Y/Y in Q2 2017, in line with Q1 growth. Facebook CPC fell 3% Y/Y, while CPMs jumped 57%.
- Phones and tablets combined to account for the vast majority of Facebook ad spend in Q2, and mobile spend share increased from 76% in Q1 2017 to 82% in Q2.
Phones produced 43% of all Google Display Network spend in Q2, while 12% came from tablets, as desktop computers slipped below a majority of GDN spend for the first time.