Merkle (www.merkle.com), a leading technology-enabled, data-driven performance marketing agency, has released its Q2 2018 Digital Marketing Report (DMR). This comprehensive report analyzes trends across paid search, social media, display, and organic search and provides insights into the performance of major industry players like Google, Facebook, Amazon, Bing, Yahoo, and Instagram. To provide additional detail on the research findings, Merkle is hosting a complimentary webinar on Monday, July 23rd at 2pm ET.
Top takeaways from the report point to Google search ads continuing to generate positive performance for advertisers, despite overall investment growth decelerating for the third straight quarter. One driver of this improved performance is the increasing role that audience targeting played in Q2, with 37% of Google search ad clicks impacted by Google’s specific audience targeting products, including: remarketing lists for search ads (RLSA), Customer Match, and similar audiences. This rate was up from 21% of clicks a year earlier.
“The increasing use of data and marketers turning to people-based marketing tactics with their search marketing campaigns are making a positive impact on overall performance of Google search ads,” commented Mark Ballard, vice president, research, Merkle. “We predict this trend will continue as marketers increasingly adopt more sophisticated audience targeting strategies for search.”
Other areas of growth for Google include Google Shopping ads, which were up 31% Y/Y in Q2 2018, more than five times the rate of growth for Google text ads. Google organic search visit growth improved nearly three points between Q1 and Q2 2018, coming in at 2.4% Y/Y growth in Q2. YouTube ad spend grew 189% from Q2 2017.
Google also maintained dominance in total site visits produced by organic search. For desktop, Google rose 2% Y/Y with 93% share in Q2 2018. On mobile, Google also rose 2%, accounting for 96% of organic search visits in Q2 2018.
Bing and Yahoo search ad spending growth also decelerated sharply in Q2 2018, despite accelerating click growth, as CPC growth dropped from 17% Y/Y in Q1 to a 10% decline in Q2. Bing organic search visits fell 12% in Q2 2018, but that marked a big improvement from the previous quarter, which came despite accelerating Bing ad click growth.
The top takeaways for Facebook from the DMR included significant Y/Y ad spend growth for Instagram over Facebook. Facebook grew 40% Y/Y, while impressions fell 17%. At the same time, Instagram grew 177% Y/Y with impressions more than tripling.
“Our data shows that marketers are continuing to spend more with Facebook and Instagram, despite all of the negative attention the platforms have received leading into Q2 2018,” added Ballard. “With users still engaged on the platforms, we expect that Facebook and its properties will continue to see major investments from brands.”
Facebook also maintained its lead for social media-driven site visits, yet growth has slowed to 8% Y/Y for Q2 2018, down from 19% in Q1 2018. Site visits from Instagram are rising sharply with 236% Y/Y growth. However, YouTube showed the biggest gains in driving traffic, with 300% Y/Y growth. Other significant social platforms like Twitter and Pinterest delivered larger visit growth than Facebook, but still trailed Instagram and YouTube growth by a large margin.
The DMR shows that Amazon search ads continue to grow rapidly, with Sponsored Products spend up 165% and Headline Search Ads spend up 162% Y/Y for the quarter. Sponsored Products continue to account for the vast majority of Amazon search investment, with 88% spend share in Q2, and they also drive the highest sales per click for advertisers among Amazon’s search formats.
“Our Q2 report shows the strength of digital media’s ‘big three’ platforms: Google, Facebook, and Amazon. Despite major legislation like GDPR and incidents like Cambridge Analytica, marketers are willing to adapt to grow their investments in these platforms, and use them in increasingly sophisticated ways to improve ROI,” said Dalton Dorné, head of marketing, Merkle Americas.