Skai, a leading omnichannel performance marketing platform, has released its Q3 2023 Digital Marketing Quarterly Trends Report, which includes an in-depth examination of the digital marketing trends that defined the second quarter of this year, as well as an interactive infographic summarising important findings. In 2023, spending levels increased nearly every quarter in every channel of analysis, pushing year-over-year (YoY) spending higher in some situations.
Significant consecutive spending growth across all channels
Quarter-over-quarter (QoQ) spending on retail media increased by 10%, paid search by 3%, and paid social by 27%. In each of these channels, spending in Q3 outpaced that in the first quarter of 2023.
YTD growth is being driven by rising consumer demand and higher prices.
Since Q1, retail media CPC has climbed by 14%, paid search CPC has increased by 18%, and paid social CPM has increased by 8%. These increases in ad costs are an important aspect in understanding spending growth in 2023, and they are likely to continue through the end of the year as the holiday season builds on increased consumer confidence, competition among marketers, and relatively low pricing in 2022.
Overall, the prognosis for advertising spending is positive.
Year over year (YoY) spending in sponsored search increased from +3% to +5%, while retail media maintained its strong growth rate of +34%. Short-term growth and increasing spending in key categories confirmed the conventional view of a paid social advertising rebound, despite the channel’s YoY expenditure growth of -3% being a clear outlier to the general market trend.
Social spending rises through the funnel.
In our research, there is a clear distinction between the growth rates of social campaigns based on program objectives. Upper-funnel methods like branding and awareness raised spending by 13%, while mid-funnel goals like post-engagement increased spending by 12%. These demographics are more likely to use video advertising and Reel placements.
“So far, 2023 has been remarkably consistent in that advertisers have continued to increase their spending in the key walled garden publishers month after month and quarter after quarter.” “It appears that the positive spending trends in retail media and paid search earlier in the year spilled over completely into paid social in Q3,” said Chris Costello, Skai’s Senior Director of Marketing Research. “In particular, when we look at commerce advertising through a more omnichannel lens-which is to say one that is inclusive of relevant publishers beyond just retailers-social spending seems to have fully flipped the switch going into the second half and the holiday period once the growth in those other channels was fully recognized.”