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Merkle’s Digital Marketing Report for Q1 2017

Merkle’s Digital Marketing Report for Q1 2017

Merkle produce a quarterly digital marketing report, examining the state of the industry and identifying benchmarks. The report for the first quarter of 2017 runs to 28 pages. We’ve read it, so that you don’t have to! Here’s our summary:

Google AdWords spend increased by 21% in the first quarter of 2017 on a year-on-year basis, representing a slightly faster rate of increase than was seen in the first quarter of 2016. As we’ve reported elsewhere, the growth in Google Shopping spend was greatest.

The ability to separate desktop bids from those for tablets (implemented in Q3 2016) is seen as having been advantageous, with many advertisers reducing bids on tablets. This was part of a series of measures that allowed campaigns to become more efficient during the quarter: it’s noted that spend increased on desktop advertising, while reducing on tablet advertising. This presumably reflects advertisers reacting to the conversion data that they have available.

There has been growth in advertising on Google Maps, although this starts from a relatively low base.

The phasing out of standard text ads and their replacement with Extended Text Ads means that many advertisers now have more characters within their ad copy. Interestingly, the Merkle reports that, despite this seeming advantage, there is no obvious performance advantage being recorded by those advertisers using the expanded ad format.

The report notes the continuing decline of advertising on both Bing and Yahoo, suggesting that this may be tied to the weak positioning of those two search engines on mobile devices, where Google is often the default search engine.

Amazon’s Sponsored Product Ads are continuing to increase in popularity, while Facebook Ad growth is outstripping the search engine marketing growth. Indeed, Facebook Ads spend increased by 71% in the first quarter of 2017 (on a year-on-year basis).

Looking at some of the detail for AdWords, we see that Google Shopping spending is growing at three times the rate of spending on text ads. The level of spending on brand-related terms is fairly constant, but there has been a 24% year-on-year growth in spending on non-brand keywords.

Examining the UK scene specifically, there was 10% year-on-year growth through the first quarter, but this represents a sharp fall in the growth rate. This might reflect wider economic performance in the UK, given the recent release of GDP data suggesting a slowdown in the overall pace of growth.

Overall, the biggest two sectors where growth in spending was seen were financial services and retail. Turning to retail specifically, the substantial growth that’s continuing to be seen on Google Shopping spend is heavily weighted at this point to desktop devices.

We hope that our summary of the latest report has proved useful. We’ll continue to summarise further reports that come our way, highlighting UK-specific data.

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