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How Did the Digital Marketing Industry Fare in Q4 2020?

Merkle is happy to announce the release of our Digital Marketing Report covering Q4 2020. The 37th edition of the Merkle Digital Marketing Report features updates and insights on how digital marketing has fared as the pandemic showed no signs of slowing down, with analyses of major digital ad platforms including Google, Facebook, Instagram, and Amazon.

In Q4, the holiday season looked different in many ways, and digital marketing was no exception. Amazon’s Prime Day, which usually happens in July, instead kicked the holiday season off in mid-October. Cyber Monday shifted from falling in December in 2019 to November in 2020. The shipping industry faced massive challenges from an influx of online ordering, and retailers faced inventory challenges after months of elevated demand. And yet, there were some performance shifts that pointed toward a return to normalcy.

Below are some high-level findings from this quarter’s report:

Google paid search clicks grew 12% Y/Y, continuing on a path of deceleration back toward Q1 2020 growth levels. Concurrently, cost-per-click (CPC) growth continued to reverse its trend and climbed to positive Y/Y growth for the first time since Q1.

Higher CPC growth and lower click growth combined to generate 12% ad spend growth, one percentage point higher than Q3's growth figure.

.Google US Overall Paid Search

Retail and consumer goods continued to see strong growth for the third quarter in a row, coming in just shy of 40% after seeing 42% growth in Q2 and Q3.

Travel stayed on a positive trajectory as consumer optimism rose in response to the start of vaccine distribution. In Q2 and Q3, travel visits were down Y/Y 50% and 37%, respectively, while Y/Y declines in Q4 were 19%. Insurance visits grew 16% Y/Y, and financial services growth was flat.


During Prime Day, Amazon search sales increased 130% compared to the previous 30 days, while spend increased 200%. Advertisers that did not run deals during Prime Day still saw lifts in both spend and sales from increased consumer interest, but sacrificed efficiency as consumers clicked on ads but were less willing to purchase with no deal present. The 82% of advertisers that ran deals experienced a sales lift of 240% with a spend lift of just 210%.


Spending on Facebook ads, excluding Instagram, grew 12% Y/Y in Q4 2020, remaining similar to Q3's growth. Facebook impression growth fell to 2% Y/Y, following a similar seasonal pattern as 2019. CPM saw Y/Y increases for the first time since Q1 2020, after dropping in Q2 and Q3 as advertisers pulled back due to COVID-19. Heavy investments in political ad spending during Q4 may have also contributed to Y/Y CPM increases.


Want to learn more? Download the latest Merkle Digital Marketing Report here.