Merkle (www.merkle.com), a leading technology-enabled, data-driven performance marketing agency, has released its Q3 2018 Digital Marketing Report (DMR). This comprehensive report analyzes trends across paid search, organic search, social, display, and Amazon Ads. It 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 Thursday, October 25, 2018, at 2pm ET.
Takeaways from the report show that Google search ads achieved steady Y/Y spending growth of 18% in Q3, with clicks up 8% and cost per click (CPC) up 9%. Key metrics highlight the growing contrast between trends for traditional Google text ads and those for Google Shopping Ads, with advertiser investment in Shopping growing by 33%, compared to just 3% growth for text ads. Excluding navigational queries on advertisers’ own brand names, Google Shopping Ads generated 87% of Google search ad clicks for retailers in Q3.
Spending on phone Google search ads was up 33% Y/Y, while desktop spending increased 11%. Tablet spending growth was positive in Q3 for the first time in two years.
Other areas of growth for Google include Google Local Inventory Ads (LIAs), which saw brands’ share of clicks increase significantly from Q2. Among advertisers with a brick-and-mortar presence, Google Maps also produced 7% of text ad clicks on phones in Q3, up from 5% a quarter earlier.
Google continued to maintain dominance in the total site visits produced by organic search, growing nearly 9% in Q3, which is up from 2% growth in Q2. This was Google’s strongest performance since Q2 2015. US organic search visit share for search engines beyond Google, Bing, and Yahoo fell from just 0.8% in Q3 2017 to 0.6%.
Facebook, Instagram, Snapchat, and YouTube
Facebook spend, excluding Instagram, grew 25% Y/Y, with a 6% increase in impressions. Facebook mobile traffic and spend share continued to grow and were up to 95% and 89%, respectively, in Q3 2018.
Instagram spend grew 61% Y/Y for the quarter, as impressions increased 58%. The median advertiser on both Instagram and Facebook spent 19% as much on Instagram ads in Q3 as on Facebook ads.
Snapchat advertisers spent 6% as much on Snapchat ads as they did on Facebook ads for the quarter, but adoption remains small among paid social advertisers overall. Advertisers on YouTube continue to grow their investment significantly, with a 77% increase in ad spend Y/Y in Q3 2018.
The DMR shows that Amazon search ad spend continued to grow in Q3 2018. Spend across Amazon’s Sponsored Products grew 62% Y/Y, while spend on Sponsored Brands grew 86%. Amazon’s recent layout changes served Sponsored Brands well, as it significantly increased the number of page locations where Sponsored Brand ads may show. Brand keywords accounted for 61% of Sponsored Brands sales and 42% of Sponsored Products sales in Q3. Amazon Sponsored Products conversion rate is higher than that of Google Shopping, which points to the high purchase intent of Amazon searchers relative to general search engine users.
“Published since 2011, the Digital Marketing Report offers detailed and accurate data trends and insights for marketers,” said Erin Hutchinson, SVP, head of marketing for Merkle Americas. “The Q3 report not only provides marketers with valuable benchmark data for their programs, but it also sheds light on some of the most impactful changes happening on media platforms – from Apple’s new Intelligent Tracking Prevention (ITP) to Facebook and Instagram ad performance to evolving Amazon ad formats.”