the kenshoo q1 2020 quarterly trends report · media research. 2 k r 1 2020 the kenshoo q1 2020 qtr...

The Kenshoo Q1 2020 Quarterly Trends Report Search, Social, and Ecommerce Advertising Metrics and Insights

MEDIA RESEARCH

Kenshoo Quarterly Trends Report Q1 20202

The Kenshoo Q1 2020 QTRWith 2019 being the first year where online budgets eclipsed traditional ad spending, 2020 was poised to be a breakout year for Search, Social, and Ecommerce advertising.

Of course, things didn’t go as planned—and many marketers are still trying to understand the extent to which the global health pandemic has impacted these core digital channels.

More broadly, what can we learn about how some of the core industries comprising the U.S. digital economy have been affected through the lens of media behavior?

This edition of the Kenshoo Quarterly Trends Report for Q1 2020 is drawn from a foundation of nearly $7B in annualized marketer spend, over 750 billion ad impressions, and 15 billion clicks. As one of the most well-respected datasets by those who follow advertising performance closely, it includes many proprietary insights about what’s happening in the digital advertising industry on a macro level.

In this report, learn quarter-over-quarter and year-over-year digital advertising campaign performance trends from Q1 2020, including:

• Key performance indicators for the first quarter of the year across Search, Social, and Ecommerce Advertising

• The impact of the COVID-19 on overall digital advertising trends including projections on how Q1 might have performed without the disruption

• A drill-down into the current state and near-term outlook of key industry categories affected by the global health crisis

About KenshooKenshoo is the leading marketing technology platform for brands looking to plan, activate, and measure growth strategies across the most engaging digital channels. Kenshoo offers the only marketing solution that combines data-driven insights and best-of-breed optimization to help make informed decisions, scale, and measure performance across Google, Facebook, Microsoft, Amazon, Walmart, Apple Search Ads, Pinterest, Snapchat, Instagram, Verizon Media, Yandex, Yahoo Japan, and Baidu. Kenshoo’s machine-learning algorithms and artificial intelligence leverage market signals and enable companies to predict and keep pace with the omnichannel customer journey. Kenshoo has 27 international locations and is backed by Sequoia Capital, Arts Alliance, Tenaya Capital, and Bain Capital Ventures. Please visit Kenshoo.com for more information.

Kenshoo brand and product names are trademarks of Kenshoo Ltd. Other company and brand names may be trademarks of their respective owners.

Contents The Kenshoo Q1 2020 QTR 2

About Kenshoo 2

Key Takeaways 3

Q1 2020 Channel Trends 4

Channel Impact of COVID-19 6

Industry Trends 8

Channel (By Industry) Trends into Q2: Signs of Recovery 10

Methodology 11

http://Kenshoo.com

Kenshoo Quarterly Trends Report Q1 2020 3

Key TakeawaysCOVID-19 clearly had an impact on the quarter, but year-over-year spending still grew across all channels through the end of March. Search, social, and ecommerce advertising were all poised to have a return to mid-2019 form before the pandemic. Within this report, you will see our growth projection on how these channels would have likely performed without the disruption.

Since the initial impact on digital ad budgets, weekly spending has stabilized across advertising channels, and recovery will vary by industry category. See how Q2 is shaping up based on the most recent advertising performance data and if there are signs of recovery across channels.

More Resources from KenshooQuarterly Trends Hubkenshoo.com/digital-trends-researchView the current infographic, long-form report and highlights, along with previous quarters, all in one place

Covid-19 Resource Hubkenshoo.com/covid-19-resourcesUpdated regularly with new analysis and category views

Other insights are posted regularly tokenshoo.com/blogkenshoo.com/case-studies

Key takeaways from Q1 2020

https://kenshoo.com/digital-marketing-trends/

https://kenshoo.com/covid-19-resources/

https://kenshoo.com/blog/

https://kenshoo.com/case-studies/


Q1 2020 Channel TrendsPaid SearchSpending was down 19% quarter-over-quarter (QoQ), but a decrease is normal when moving from the height of the shopping season in Q4 to Q1. Year-over-Year (YoY), there was a 1% growth in spend, and we will investigate how much higher it would have been without the impact of COVID-19 later in the report.

Paid search click-through rates (CTR) across Kenshoo were 2.4% (the same as a year ago) while the average cost-per-click (CPC) was down slightly from $0.60 in Q1 2019 versus $0.58 in Q1 2020. That these metrics stayed relatively flat even through the COVID-19 impact shows that marketers were able to maintain efficiency even in the light of the pandemic, and also that the effects were perhaps more about volume than performance.

Social AdvertisingKey metrics were down in Q1 versus Q4 2019—but once again, Q1 always declines QoQ due to the big end-of-the-year shopping season. Even with the back half of March down due to the impact of COVID-19, year-over-year spending on Social Advertising grew 25% with clicks up 40% and impressions up 35%.

Social Advertising CTR was the same as it was in Q1 2019 (1.1%) but CPMs were down 25% coming off more competitive pricing of Q4. Year-over-year, however, CPMs were down 7%—continuing a trend highlighted last quarter where marketers seem to be finding ways to spend their budgets wisely.

© 2020 Kenshoo. All Rights Reserved1

Search Trends

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0.20

0.40

0.60

0.80

1.00

1.20

1.40

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Inde

xed

Volu

me

(Q1

2019

=1.0

0)

Search Volume Growth

Impressions Clicks Spending

QoQ YoYImpressions

-20% +5%

Clicks

-13% +4%

Spending

-19% +1%

Paid Search Key Metrics (Q1 2019 to Q1 2020)


QoQ YoYClick-through

Rate

+9% -1%

CPC**

-7% -3%

2.4% 2.5% 2.5%2.2% 2.4%

0.0%0.5%1.0%1.5%2.0%2.5%3.0%

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Click-through Rate (CTR)

$0.60 $0.60 $0.60 $0.63 $0.58

$0.00

$0.20

$0.40

$0.60

$0.80

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Average Cost per Click (CPC)

Search Trends


Social Trends

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1.00

1.20

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1.60

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Inde

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2019

=1.0

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Social Volume Growth


QoQ YoYImpressions

+11% +35%

Clicks

-6% +40%

Spending

-18% +25%


QoQ YoYClick-through

Rate

-15% +4%

CPM

-26% -7%

1.1% 1.1% 1.2%1.3%

1.1%

0.0%

0.5%

1.0%

1.5%

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Click-through Rate (CTR)

$5.34 $5.32 $5.31

$6.67

$4.95

$0.00

$2.00

$4.00

$6.00

$8.00

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Average Cost per Thousand Impressions (CPM)

Social Trends

Paid Search CTR & CPC Trends (Q1 2019 to Q1 2020)

Social Advertising Key Metrics (Q1 2019 to Q1 2020)

Social Advertising CPM & CPC Trends (Q1 2019 to Q1 2020)


Ecommerce Advertising Ecommerce Advertising—led by Amazon and Walmart—was already set to build on its meteoric growth this year, and saw an extra boost at the end of the quarter as consumers sheltering-at-home purchased essentials online. Year-over-year, spend was up 47%, impressions were up 54%, and clicks were up 49%. Many industry experts believe this increase in the behavior of buying online will carry over in the post-COVID period.

Search & Social Product AdsThe search and social channels each have their own ad types that are more tuned to direct-response and online shopping. Paid search shopping campaigns and social dynamic product ads comprised 38% of Q1 spend for “shopping and retail” accounts in social, and 44% for search. Product ads continue to grow faster than overall growth within each channel.

Social Campaign Objectives: Year-over-Year Growth

App Install & Engagement up 64%

Video Views up 22% Conversions up 37% Reach up 64%

Product Catalog Sales up 31%

Store Visits down 15% Brand Awareness & Traffic down 14%


Ecommerce Channel Advertising Trends

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0)


QoQ YoYImpressions

-20% +54%

Clicks

-19% +49%

Spending

-14% +47%

Ecommerce Channel Advertising Key Metrics (Q1 2019 to Q1 2020)


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0)

Social Search

CROSS-CHANNELProduct Ad Trends

+16%YoY

+29%YoY

Search & Social Product Ads Spend Growth (Q1 2019 to Q1 2020)


Channel Impact of COVID-19What would have been the growth of digital advertising’s biggest channels in Q1 2020 had they not been impacted by the global health crisis?

We can estimate the impact of the global pandemic by using either weekly or monthly 2019 numbers to project out what the affected period would have been without COVID-19 and then recalculating a projected Q1 2020. With these multiple scenarios, we can get a range for our possible outcomes.

For all channels, without COVID-19, projected ad spending would have been more in line with some of the stronger growth numbers from 2019. Paid Search and Social Advertising growth would have ended up higher versus the actual results while the pandemic increased Ecommerce Advertising growth higher than we would have predicted otherwise, as marketers adapted their campaigns to make the most of increased online activity.

Actual YoY Q1 2020 Spend Growth vs Kenshoo Projected w/o COVID-19

Actual YOY Growth Estimated YOY Growth w/o Covid-19

Paid Search +1% +8-9%

Social Advertising +25% +34-37%

Ecommerce Advertising +47% +43-44%


Q1 2020 Paid Search Spend Projection w/o COVID-19

Q1 2020 Actual Growth: 1%Projected growth without COVID: 9%

Q1 2020 Social Advertising Spend Projection w/o COVID-19


Q1 2020 Ecommerce Advertising Spend Projection w/o COVID 19



0.00

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1.20

1.40

1.60

2019-01

2019-02

2019-03

2019-04

2019-05

2019-06

2019-07

2019-08

2019-09

2019-10

2019-11

2019-12

2020-01

2020-02

2020-03

Search Spend: Actual vs Projected w/o Covid-19

Actual Estimated

Search Spend ProjectionMonth-Over-Month Paid Search Spending (Jan 2019 to March 2020)

March 2020 Actual vs. Projected w/o COVID-19


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0.80

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2019-01

2019-02

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2019-05

2019-06

2019-07

2019-08

2019-09

2019-10

2019-11

2019-12

2020-01

2020-02

2020-03

Social Spend: Actual vs Projected w/o Covid-19

Actual Estimated

Social Spend ProjectionMonth-Over-Month Social Advertising Spending (Jan 2019 to March 2020)



0.00

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2.50

2019-01

2019-02

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2019-04

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2019-06

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2019-11

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Ecommerce Spend: Actual vs Projected w/o Covid-19

Actual Estimated

Ecommerce Spend ProjectionMonth-Over-Month Ecommerce Chanel Ads Spending (Jan 2019 to March 2020)


Understanding the Impact of COVID-19: Channel projections in a Normal Year(Monthly Projection Model)


Industry TrendsGauging the impact by categoryWe know some industries have been hit harder by COVID-19 than others and marketers have paused or slowed advertising as a response to this market fluctuation. However, other industries either weren’t as affected, or have started to recover based on the impact on their customers or their ability to deliver their value.

As a result, the recovery will look very different by industry as we look at February 2020 versus March 2020.

Automotive: Paid SearchThe disconnect between impression volume and clicks and spending could be due to ad copy being less relevant post-COVID

Going into Q2, automotive ad spending has continued to decline

CPG: Paid Search & Ecommerce AdvertisingHousehold products were the biggest driver of the CPC decline for Ecommerce Advertising, which gives us an indication that lower-priced items may have driven consumer spending increases, even across channels.

CTR spikes show how relevant this category became in March. This category may experience a long-term benefit as consumers get used to ordering essential and fast-moving products online.

Education: Paid Search & Social AdvertisingEducation advertisers increased their activity in March across Search and Social. In Q2, spending in Social has continued to rise. Search has slowed somewhat, but impressions continue to grow, showing there is still interest in the category.


-15%

-10%

-5%

0%

+5%

+10%

+15%

+20%


% Change from February to March 2020

Search

Automotive: Paid SearchAutomotive: Paid Search


-30%

-20%

-10%

0%

+10%

+20%

+30%

+40%

Spending CPC CTR


Search Ecommerce

CPG: Cross-ChannelCPG: Paid Search & Ecommerce Advertising


0%

+5%

+10%

+15%

+20%

+25%

+30%

+35%

+40%

Impressions Clicks Spend


Search Social

Education: Cross-ChannelEducation: Paid Search & Social Advertising


Computers & Electronics: Paid Search & Ecommerce AdvertisingIn the back half of March, this category got hot, presumably as households beefed up their electronics to better adjust to spending more time at home both personally and professionally.

In Q2, spending trends have been more mixed from week to week, so those home offices may be in good shape for now.

Toys & Games: Ecommerce AdvertisingToys & Games had a strong run from the end of March into at least the first half of April. That spike has started to recede halfway through April, but may start up again when you or your children finish all of those puzzles.

Travel: Paid SearchNot only has Travel been hit the hardest across categories, but it was hit the earliest. Concerns and restrictions about travel were happening well before stay-at-home orders took effect.

In Q2, this category has already shed most of its spending, which means it will have much less of an effect on overall search spending trends until it starts to come back.


0%

+5%

+10%

+15%

+20%

+25%

+30%

+35%

+40%

+45%

+50%

Impressions Clicks Spend


Search Ecommerce

Computers & Electronics: Cross-ChannelComputers & Electronics:

Paid Search & Ecommerce Advertising


0%

+10%

+20%

+30%

+40%

+50%

+60%

+70%

+80%



Ecommerce

Toys & Games: Ecommerce Channel Toys & Games: Ecommerce Advertising


-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%



Search

Travel: Paid Search Travel: Paid Search


Channel (By Industry) Trends into Q2: Signs of RecoverySo, how long will it take for the ad industry to bounce back from this crisis?

No one really knows. It’s very much tied into how long non-essential businesses will remain closed, how long stay-at-home orders continues, and other key factors. However, the data shows that advertisers are already starting to push forward.

Building on the March-versus-February view, this analysis compares the week ending 4/11 to the week ending 4/4 to consider shorter-term growth. Items with asterisks show areas where there are increases over the average of the four weeks leading up to the week of 4/11, providing an indicator of more medium-term changes.

For more up-to-date numbers, visit the Kenshoo Covid-19 Resource Hub.


Signs of Recovery: Search

0% +5% +10% +15% +20% +25% +30% +35%

Telecommunications

CPG*

Finance

Shopping & Retail | Housewares & Home Furnishings*

Health*

Shopping and Retail*

Shopping & Retail | Apparel, Fashion & Accessories*

IMPRESSIONS

Health | Pharma*



Shopping & Retail | Apparel, Fashion & Accessories*

SPENDING

Week over week change (week ending 4/11)

Signs of Recovery: Paid SearchWeek-over-week change (week ending 4/11)

Items with an asterisk also showed increases over their four-week average


Signs of Recovery: Social

0% +5% +10% +15% +20% +25% +30% +35% +40% +45%

CPG | Personal Care*

Politics, Gov't & NFP*


Health


Education*

CPM

Finance

Education

Health

Restaurants*

SPENDING


Signs of Recovery: SocialWeek-over-week change (week ending 4/11)



Signs of Recovery: Ecommerce

0% +5% +10% +15% +20% +25% +30% +35% +40% +45%

CPG | Beauty

Shopping and Retail

Shopping & Retail | Apparel, Fashion & Accessories

Shopping & Retail | Computers & Electronics

Shopping & Retail | Housewares & Home Furnishings

IMPRESSIONS

CPG | Beauty

Health*


SPENDING


Signs of Recovery: Ecommerce Channel AdsWeek-over-week change (week ending 4/11)


Paid Search• These categories and subcategories all showed week-

over-increases for the week ending April 11th

• Looking at Impressions as well as spend gives us visibility into how much search activity occurred in a category

Social Advertising • These categories and subcategories all showed week-


• Looking at CPM as well as spend gives us visibility into both advertiser value in reaching audiences as well as seeing where CPMs are headed back towards pre-virus levels

Ecommerce Advertising• These categories and subcategories all showed week-


• Again, we use Impressions as our secondary metric to help gauge shopper interest in specific categories




MethodologyThe analysis within this report is based on advertiser campaign data managed through the Kenshoo platform on Google, Microsoft, Yahoo!, Yahoo Japan, Baidu, Yandex, Pinterest, Walmart, Apple, Facebook, Instagram, Snapchat and Amazon between January 2019 and March 2020, except where noted. The data is sampled from a universe containing over 750 billion impressions, 15 billion clicks, and nearly $7 billion in advertiser spending on an annual basis.

For charts showing spending and impressions/clicks, volume metrics have been normalized to a factor of one based on the initial volume for the first quarter of data shown. Data points from subsequent quarters are based on a multiplier from the first quarter. For example, 1.6 means that volume is 60% greater than the volume on the initial quarter measured. Except where noted, advertisers must have 15 consecutive months above a minimum spending threshold in the channel (a “constant-advertiser” approach) to be included in the analysis. Some outliers were removed when necessary.

For more information and to interact with the Kenshoo QTR dataset, please visit our Quarterly Trends Report Snapshot that can be found at Kenshoo.com/digital-trends-research/.

Kenshoo brand and product names are trademarks of Kenshoo Ltd. Facebook® is a registered trademark of Facebook, Inc. Kenshoo brand and product names are trademarks of Kenshoo Ltd. Other company and brand names may be trademarks of their respective owners.

https://kenshoo.com/digital-marketing-trends/

the kenshoo q1 2020 quarterly trends report · media research. 2 k r 1 2020 the kenshoo q1 2020 qtr...

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