DISPLAY & PAID SOCIALSEO & SOCIALCSECSEMERKLE DIGITAL MARKETING REPORT Q1 20182PAID SEARCHEXEC SUMMARY
TABLE OF CONTENTS
EXECUTIVE SUMMARY
03
PAID SEARCH
05
ORGANIC SEARCH & SOCIALDISPLAY & PAID SOCIAL
22
AMAZON & COMPARISON SHOPPING ENGINES
26
ABOUT MERKLE & METHODOLOGY
30
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DISPLAY & PAID SOCIALSEO & SOCIALCSECSEMERKLE DIGITAL MARKETING REPORT Q1 20183EXEC SUMMARYPAID SEARCH
NEW & NOTABLE FOR Q1 2018
Still accounting for the largest share of digital advertising dollars for most brands, Google paid search
spend growth slowed in Q1 to 20%, as click growth decelerated for the third straight quarter. Average
cost-per-click (CPC) growth once again drove the lion’s share of Google spend growth with a 13% Y/Y
increase for the quarter.
Google text ad CPC growth slowed compared to a quarter earlier, but remained at the second highest
rate of any quarter since Q3 2016. Brand keyword CPC growth accelerated from 23% in Q4 to 28% in
Q1, continuing a strong reversal of the CPC decline observed for these keywords following Google
updates to its Ad Rank calculations in May 2017.
Q1 Google Shopping spend grew 40% Y/Y, the highest rate observed since the rst half of 2016, as both
pricing and click growth accelerated. Newer Shopping ad variations such as Local Inventory Ads and
Showcase Shopping Ads make up a small share of overall Shopping trafc, but are steadily growing for
the advertisers deploying them. Shopping ads now make up 82% of all non-brand Google paid search
clicks for retailers.
While Google continues to dominate paid search trafc with 90% click share, Bing Ads and Yahoo
Gemini spend have actually increased faster Y/Y than Google in each of the last two quarters. Bing
Product Ads continue to play a large role in that growth, with a 64% increase in spend and 110%
increase in clicks Y/Y in Q1 2018.
The growth of paid clicks on Bing and Yahoo appears to have hurt organic search trafc driven by the
two engines, as both posted their largest year-over-year (Y/Y) organic visit declines in the history of this
report. Yahoo also sufered from losing its position as the default search provider for Firefox. Including
Google volume, total organic search visits were roughly at compared to a year ago.
In paid social advertising, increased pricing and ad engagement continue to drive Facebook spend up,
with 48% Y/Y spend growth for the median advertiser in Q1, despite a 5% decline in impressions. The
decline in impressions is in line with Facebook’s expectations that ad load would not play as large a role
in driving ad spend growth beginning in the second half of 2017.
Investment on Instagram continued to grow even faster than Facebook, but remains a smaller overall
share of paid social spend, with just 9% as much spend as Facebook for brands advertising on both.
That gap will likely become smaller over the next several quarters as Instagram continues to roll out
new advancements.
Amazon advertising continues to grow rapidly, with Sponsored Products and Headline Search Ads
spend increasing 96% and 90% Y/Y in Q1, respectively. CPC increased signicantly for both formats,
and was 128% higher for Headline Search Ads Y/Y, as brands are seeing competition for these
prominently placed ad units heat up. Sponsored Products accounted for 86% of all Amazon Marketing
Services spend for the quarter, up slightly from 85% in Q4.
EXECUTIVE SUMMARY
DISPLAY & PAID SOCIALSEO & SOCIALCSECSEMERKLE DIGITAL MARKETING REPORT Q1 20184EXEC SUMMARYPAID SEARCH
EXECUTIVE SUMMARY
AMAZON & COMPARISON SHOPPING ENGINES (CSES)
·Amazon Sponsored Products spend grew 96% and Headline Search Ads 90% Y/Y for the quarter.
Pricing increased meaningfully for both formats, and Headline Search Ads CPC more than doubled Y/Y.
·While Headline Search Ads have a much higher click-through rate (CTR) than Sponsored Products,
Sponsored Products accounted for 86% of all Amazon Marketing Services spend in Q1, while Headline
Search Ads accounted for 10%. The remaining 4% of spend came from Product Display Ads.
DISPLAY & PAID SOCIAL
·Facebook spend excluding Instagram grew 48% Y/Y, as same-site impressions fell 5% Y/Y for the
median brand, while CPC and CPM increased 10% and 70%, respectively.
·Q1 Instagram spend increased 62% Y/Y, as impressions more than doubled. Instagram remains smaller
than Facebook in terms of ad spend, with the median brand on both platforms investing 9% as much
spend on Instagram as on Facebook.
ORGANIC SEARCH & SOCIAL
·Total site visits driven by organic search were at Y/Y, as growth weakened across all device types.
Phone organic search visits rose 8% Y/Y, while desktop and tablet visits fell 6%.
·Both Yahoo and Bing posted the largest organic search visit declines in the history of this report, as paid
search click growth ran near multi-year highs for the two search engines.
·Social media sites drove 3.4% of all site visits in Q1 2018, driven by mobile devices, as phones and tablets
produced over 75% of site visits from social media.
PAID SEARCH
·Google spend grew 20% Y/Y, driven primarily by a 13% increase in CPC. CPC growth began to
accelerate in mid-2017 around the time of Google’s May Ad Rank changes, which seemed to increase
the rst page and top-of-page minimum bid estimates required for advertisers to show on the rst
page or at the top of the rst page of search results.
·Google text ad spend grew 4% in Q1, after 15% growth in Q4, while Google Shopping spend growth
accelerated from 32% in Q4 to 40% in Q1. Google Shopping now accounts for 60% of all Google paid
search clicks for retailers.
·Bing Ads spend growth continues to rebound on the back of strong Product Ads click growth. Product
Ads now account for over half of all non-brand trafc from Bing Ads for retailers.
·Amazon’s Google Shopping impression share against Home Goods advertisers declined in the
back half of Q1, indicating a likely shift in either bidding strategy or the product selection featured by
Amazon in Shopping campaigns.
·Phones and tablets accounted for 60% of all paid search clicks in Q1 2018 and 39% of spend. 55%
of Google paid search clicks came from phones alone, while just 26% and 19% of clicks were from
phones for Yahoo Gemini and Bing Ads, respectively.。