Ecommerce ad spend increased 66% year over year in the second quarter of 2019, according to digital advertising platform Kenshoo’s recently-released “Q2 2019 Quarterly Trends Report.” The report also showed a hike in social media advertising spending, product advertisements and paid search advertising.
Ecommerce advertising is stronger than ever
The second quarter of 2019 almost reached 2018 Q4 spending levels, according to Kenshoo’s report. Q4 is usually the largest quarter for ecommerce ad spend, as retailers tend to spend extra to garner attention during the holiday season.
Year over year, ecommerce channel ad spend for Q2 2019 increased 66% overall. Impressions also increased 59% year over year, and clicks increased 57% year over year.
“This indicates that this year’s Q4 will be meaningfully higher for ecommerce channel ads than most industry experts have forecasted,” the Kenshoo report says.
Ecommerce channel advertising is similar to a demand-side platform advertising in that both allow retailers to bid for advertising space. Whereas demand-side platform is a platform that allows a marketer to manage all ad and data exchange accounts in one place, ecommerce channel advertising only focuses on advertisements appearing when consumers are actively searching to purchase a product.
The three biggest ecommerce channel ad platforms are the usual heavy hitters in advertising: Google LLC, Facebook Inc. and Amazon.com Inc. Kenshoo’s report found that in Q2, advertisers who ran ecommerce channel ads primarily used Amazon advertising for this service, indicating brands and retailers are trying to reach customers on the very platform they are purchasing an item.
Search is still steady
For Q2, cost per click for search decreased 10% year over year because of the increase in mobile and product ads being purchased, according to Kenshoo. These ads delivered 23% more clicks in Q2 2019 than those in the same quarter of 2018.
Mobile, according to Kenshoo, has had the largest share of search ads, at around 70% of impressions and clicks for each quarter. In fact, mobile now earns the majority (51%) of search spend for those retailers measured by Kenshoo.
Brands have a social preference for video
Despite click-through rates falling over the last five quarters for social media advertising, the use of video ads on social media has had a 53% increase in spending in Q2 2019 over 2018.
“With social advertising, click-through rate is a bit of a mixed bag in terms of how to interpret this trend,” the Kenshoo report says. “While clicks are almost always a desirable user action in digital marketing, the ad mix for social is swinging towards video and other visual formats like stories, which are more likely to drive top-of-mind awareness to achieve branding goals, rather than direct engagement.”
In Q2, video ads accounted for more than 40% of total social media budgets for “some time now,” with 43% of social media advertising spend belonging to video advertisements in Q2.
“Their unique blend of sight, sound and motion—already proven effective for decades on television—is great for storytelling,” Kenshoo says in the report.
The Kenshoo report analyzed more than $5.5 billion in annual marketer spend, looking at 500 billion impressions and 13 billion clicks.