Marin Software Research Reveals Search, Instagram Stories, and Product-Focused Ads Dominate in Q4

Monthly Spending on E-Commerce Channel Ads Increased by 5x Since January 2018

Marin Software, a leading provider of digital marketing software for performance-driven advertisers and agencies, released research findings from its global Q4 2018 Digital Advertising Benchmark Report. Marin Software’s research confirms that search spend grew 10% globally year-over-year, advertisers spent larger portions of their budgets on Instagram Stories, and advertisers continued to invest in lower-funnel product-focused ads to take advantage of the holiday shopping season and continued rise of eCommerce.

Marin Software presents its full Q4 2018 research, results, and takeaways in an interactive format that allows viewers to review and analyze ad spending trends by region, industry, and publisher. Key findings include:

  • Instagram Stories and Dynamic Product Ads Rule: Instagram received 18% of total Facebook spend, with 34% of that spend allocated to Instagram Stories—a 36% increase from the previous quarter. Other notable social trends included a significant shift in year-over-year spend to lower-funnel formats like Dynamic Product Ads and Collection Ads, which maximize the mobile experience with alluring, high-quality, product-focused ads. Dynamic Product Ads accounted for 35% of total Facebook spend in Q4.

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  • eCommerce on the Rise: Google Shopping Ads captured 36% of search spend for all verticals. Shopping Ads remained retail advertisers’ bread and butter, as eCommerce search engines increasingly join the quest to deliver relevant, targeted experiences. According to Marin Software data, monthly spending on eCommerce channel ads increased 5x since January 2018.
  • Paid Search Up, CTRs Down: Paid search spend grew 10% globally year-over-year. Q4 remained the strongest quarter, with Financial Services (+25%) and Retail (+12%) leading the charge. As inventory gets more expensive, however, more spend doesn’t necessarily mean more clicks—there was a modest 10% increase year-over-year in Retail, less than the search spend for the vertical.
  • Search CPCs Vary by Vertical: Travel clocked the lowest global CPC in Q4 at $0.45, followed by Retail at $0.48. Education and and Technology represented the highest CPCs in Q4, at $2.92 and $1.51, respectively.
  • Mobile Search Holds Steady: Mobile accounted for 36% of search spend share in Retail and 41% of spend share across all verticals in Q4. Mobile continued to be a crucial touchpoint for product purchasing decisions, especially during the fast-paced and competitive holiday season.

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“eCommerce is growing as an advertising channel and as a result, we’re seeing the industry shift more spend toward lower-funnel ad formats, such as Google Shopping Ads and Dynamic Product Ads on Facebook, that allow brands to capture consumers’ attention at the most critical points in the purchase journey,” said Wesley MacLaggan, SVP of Marketing at Marin Software. “Instagram Stories has been another up-and-coming ad format that the industry is paying close attention to. With 400 million daily active users, advertisers are flocking to this format to take advantage of the direct attention of a massive audience. It’s a lower-cost yet effective alternative to Instagram Feed ads.”

To create its Q4 2018 Digital Advertising Benchmark Report, Marin Software aggregated data from customers who invest billions of dollars in combined annualized ad spend on paid search, social, mobile, and eCommerce. Marin Software only includes those advertisers active on its platform for the past five quarters, measuring key performance indicators on a year-over-year and quarter-over-quarter basis, and removing any outliers with significant YoY or QoQ changes.

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