Consumers shopped earlier in 2021 to offset supply chain disruptions for holiday gifts resulting in robust year-over-year click traffic. Advertisers are relieved cost-per-click is up only 13% compared with a 41% increase in Q3 2021, according to Merkle.

Online holiday season sales was more spread out, with many shoppers purchasing earlier than normal as they were wary of supply-chain issues, says Melissa Reilly, associate director, performance media and marketing communications at Merkle. And retailer marketers contributed to this trend, with deals starting as early as October.

As a result, website traffic originating from ads was higher in October and November compared with December, according to digital marketing agency Merkle’s “Digital Marketing Q4 2021” report. With more consumers shopping in October and November, some brands reduced their ad spend for December, Merkle says.


Staffing and supply chain challenges meant brands had less inventory to sell and did not spend as aggressively in advertising, Reilly says.

“From a marketer’s standpoint, this meant there wasn’t a neat five- or six-week window to lean into with ad spend,” she says about the time period around Thanksgiving weekend.


Digital Commerce 360/BizRate’s Insights 2021 holidays survey asked 1,033 consumers in January 2022 about their shopping habits for the holiday season. Of the shoppers surveyed, 32% said they shopped ahead because of anticipated out-of-stock products. And 62% of shoppers noticed out-of-stock items for either some or many of the products during their holiday shopping.

Moving into 2022, Reilly suggests retailers continue planning ahead and closely monitoring coronavirus-related variant surges similar to Omicron that may occur later in the year.

Cost to advertise online drops

The cost to advertise online is down in Q4 2021 compared with Q2 and Q3. Cost per click (CPC), which is when advertisers pay for each time a consumer clicks on an ad, increased 13% in Q4 2021 compared with Q4 2020. Click traffic fell 7%. Modest click decreases led to a 6%  year-over-year increase in ad spend.

CPC and cost per impression (CPM), which is an advertising option in which companies pay a price for every 1,000 impressions/views an ad receives, were more heavily discounted in Q2 and Q3 in 2020 versus Q4. Reilly said this “misleadingly inflated the CPC/CPM increases for Q2 and Q3 2021.”



Google LLC’s overall U.S. paid search volume grew just 7% in Q4 compared to Q3. This is due in part to softer CPC growth compared with Q3. CPC increased by 14 points in Q4. The amount of clicks continues to fall but not as dramatically compared with Q2 and Q3, according to Merkle.


According to Merkle, retailers continued to experience year-over-year click declines on Google as a result of more expensive traffic costs. October showed the best performance year over year, down only 2% compared with last year. October’s numbers show that consumer holiday shopping started earlier this year. Shoppers wanted to minimize the chances of out-of-stock messages or delayed shipping, Merkle says.

Despite a decrease in clicks, retail ad spend increased 6% year over year because of higher CPC, according to Merkle.



Similar to Google, Microsoft Advertising’s quarter-over-quarter spend and CPC growth decelerated while click growth improved. But ad spend on Microsoft ads decreased 3% and clicks decreased 4% year over year. CPC grew a modest 1% year over year, according to Merkle.

Search for travel-related websites increased in both year-over-year paid and organic search. Google organic search visits increased 41% year over year. And clicks for Google paid search increased 25% year over year, as spend increased 40% and CPC increased 12%. Organic travel was up most of November as travelers booked end-of-year trips, according to Merkle.

Total year-over-year organic search visits decreased 1%, showing an improvement compared with Q3 2021, which decreased 3%. Mobile visits increased 6% year over year, driven entirely by phone.


Traffic from search for B2B websites grew, with Google paid search up 7%, and Google organic search, up 4% in Q4. CPC grew 9%, leading to 17% overall year-over-year spend growth. November was a highlight for B2B organic search, with visits up 13% year over year.

Total organic Google search visits decreased by 1% year over year, mobile visits, measured by phones and tablets combined, increased by 6%.

Amazon ads yield higher return for advertisers

Sales from Amazon sponsored product ads increased 12% year over year. Clicks decreased 11% year over year. CPC decreased by 27%, which drove year-over-year spend down 35%.


After two quarters of nearly 75% year-over-year growth for CPC, sponsored brand ads CPC decreased 4%. Click traffic also decreased year over year (-33%), which resulted in a 35% decrease in spending. Sales also fell year over year, but to a lesser degree (-20%), according to Merkle.

Amazon sponsored products maintain the strongest sales per click. Amazon sponsored brands’ sales per click is up 3 points, to 89%, compared with Q3. Sponsored display’s sales per click also increased 9%, to 59%, in Q4.

Of all search ad impressions on Amazon’s platform in Q4 2021, sponsored product ads generated 75% of them, followed by a distant sponsored brand ads at 17% of impressions. Compared with Q3, sponsored products and sponsored display both gained impression share, while sponsored brands fell by 11 points. Sponsored brands also experienced fewer clicks and lower spend and sales compared with last year.


Social platform ad spend shifts in Q4 2021

Brands running ads on display, social and video and/or audio shared a spend share increase of 8 points quarter over quarter to 50%.



Facebook’s year-over-year CPM growth decelerated in Q4, falling to 8% compared with 46% growth in Q3. Impressions declined 1% and spend increased 7%. Facebook and Instagram both experienced year-over-year growth in Q4, and share for video and audio ads decreased just one point compared with Q3. Advertisers continue to see video and audio as opportunities for the coming year, according to Merkle.

Instagram ads reverted after a period of CPM growth, declining 9% in Q4 year over year. The lower CPM resulted in more web traffic, with a 40% increase in impressions year over year. A combination of CPM declines and impression growth drove 27% higher spend year over year.

Connected TV (CTV) captured 22% of display/paid social spend share for advertisers investing at least $1,000 on its devices in Q4 2021. This is a two-point increase over Q3’s 20% ad share in 2021. Merkle measured this calculating how much advertising was served through a device connected to a TV to support video content streaming. This includes but is not limited to Amazon Fire TV, Roku, Apple TV and Playstation. Merkle limited the data to only look at advertisers that showed a moderate investment in CTV.


Merkle began tracking TikTok in Q3 2021 and found it accounted for 4% of paid social ad spend in Q4 2021. That’s up from 2% in Q3 as new advertisers tested into the platform and existing advertisers invested more over the holidays. Cosmetics, footwear and department store brands had the largest investments in the platform.

“TikTok’s ad products are continuing to mature, with notable development happening with their commerce solutions, such as a the roll out of promo tiles and collection ads and integrations with partners like Shopify and Square that enables TikTok shopping,” says Katie Cottam, senior manager, Merkle. These types of retail-oriented ad formats and in-platform seamless shopping experiences are giving retail brands additional reasons to start testing the platform, she says.

“We expect advertising investment in TikTok to continue increasing in 2022 as brands have more ways than ever to effectively tap into the app’s highly engaged audience,” Cottam says. 


Pinterest had the highest spend share for social platforms in Q4 at 20%, followed by Snapchat at 9% and TikTok’s 4% share.


Looking ahead at 2022, Merkle’s Reilly says shoppers getting a head start on their 2023 holiday shopping in October depends on what retailers do.


“Will retailers continue to offer Black Friday-like deals in October? Then shoppers will take advantage,” she says. “Without the deals, though, and assuming that people have resumed many of their pre-pandemic activities by Q4 of this year, we may see a return to a more condensed holiday season.”

Figures are derived from samples of Merkle clients who have worked with Merkle for each marketing channel. Where applicable, these samples are restricted to those clients who 1) have maintained active programs with Merkle for at least 15 months, 2) have not significantly changed their strategic objectives or product offerings, and 3) meet a minimum ad-spend threshold. All trended figures presented in this report represent same-site changes over the given time period. Unless otherwise specified, the data points in this report are derived from the United States.