Online shopping yielded growth across digital channels in Q1: Report

Paid search spending was buoyed by commerce advertisers, retail media grew with the expansion of publishers, and social media ad prices were a key factor in spending growth, said the Kenshoo report titled ‘Q1 2021 Digital Marketing Quarterly Trends Report’.

The first quarter of 2021 proved to be strong for retail media spending with new players rolling out broader advertising capabilities for brands on their platforms. While still the dominant force, Amazon’s share of the larger retail media pie declined from 98 per cent a year ago to 89 per cent. Instacart and Walmart comprised 11 per cent of total spending in Q1 with Instacart at 5 per cent and Walmart at 6 per cent.

In addition to the diversification of where brands are investing their retail media dollars, the amount is also up 74 per cent year-over-year. Clicks for retail media ads increased 65 per cent year-over-year, and impressions have grown 89 per cent during the same time frame. Cost-per-click has gone up compared to the same quarter last year (5 per cent) and clickthrough rates have seen an 11 per cent decline, the report said.

The online shopping boom created a halo effect; commerce advertisers grew search budgets faster than the rest of the channel to match spending increases in retail media to bring customers to the e-commerce sites and convert interest into revenue. This was part of a perfect storm of conditions that drove record growth for paid search — up 46 per cent year-over-year — and emphasised the impact of e-commerce growth beyond the point of sale.

While the overall clickthrough rate for the search channel dropped 12 per cent year-over-year, keyword ads saw this rate grow significantly, helping drive overall clicks up 66 per cent compared to Q1 2020. Meanwhile, search shopping ads were the main component of 88 per cent growth in impressions. Cost-per-click across the combined keyword and shopping segments dipped 12 per cent year-over-year, matching the overall change in clickthrough rate.

While there was the typical seasonal slowdown after the holidays, when looking at the numbers year-over-year, investment in social media advertising grew 32 per cent, the report noted.

“The growth of retail media and its halo effect on paid search point to an increasingly interdependent relationship between digital touchpoints for commerce advertisers. In the months to come, more retailers will push to gain a piece of the advertising revenue pie, and both those retailers and the consumer brands that they sell will turn to adjacent channels to let customers know how to find them,” said Chris Costello, senior director of marketing research at Kenshoo.

Analysis is drawn from a population of approximately $7 billion in advertising spend, comprising more than 3,000 advertiser and agency accounts across 40 vertical industries and over 150 countries running on the Kenshoo platform.

Fibre2Fashion News Desk (KD)