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COLUMBIA, Md .– (BUSINESS WIRE) – Merkle (www.merkleinc.com), a leading technology-based, data-driven customer experience management (CXM) company, released its Q4 2020 Digital Marketing Report (DMR), a quarterly research report that analyzes and highlights trends, both paid and organic Search, Amazon Ads, Paid Social Networking, and Display Ad Spending. The report provides insights into Q4 2020 digital marketing trends that were heavily influenced by pandemic-related changes in the holiday season, but ultimately highlighted a “return to normal” in activity across Google, Amazon, Facebook, Instagram and more.

Overall, spending growth continued to improve in the fourth quarter, anchored by an exceptionally strong month for retailers in November. Buyers were showing signs of willingness to visit stores. Google estimated that daily store visits in October 2020 were at the same level as January 2020. However, visitor numbers in the fourth quarter were still down 22% year-over-year, which didn’t quite return to normal levels for the holidays. Retail and consumer staples saw strong organic search numbers in the fourth quarter (40% year-over-year) and travel ad spend improved from the third quarter, although it was still down 20% year-over-year.

Google

Search clicks paid by Google increased 12% year over year and continued on their slowdown path towards the growth levels seen in Q1 2020. At the same time, CPC growth reversed its trend and rose to positive Y / Y growth for the first time since the first quarter. Higher CPC growth and lower click growth combined resulted in ad spend growth of 12%, one percentage point higher than in the third quarter.

The number of paid search clicks on phones fell to 64% in the fourth quarter, returning to pre-pandemic levels. Desktop traffic increased as consumers spent more time at home, whether it be for holidays or home ordering. The share of tablet traffic increased from 3% in the third quarter to 4% year over year, benefiting from the same consumer trends that increased the desktop share. The Local Inventory Ad (LIA) share of total clicks on Google Shopping ads remained below pre-pandemic levels, but showed improvements compared to the third quarter. In October and November, the average LIA click share was 15%, compared to 25% in the early first quarter.

Amazon

Amazon benefited from its delayed Prime Day in the fourth quarter of 2020. Sponsored product promotion spending growth continued to accelerate to 57% year over year, compared to 50% in the third quarter. Average CPC also reversed its trend, up 8% in the fourth quarter after three-quarters of the year-over-year declines. However, increasing competition coupled with inventory constraints slowed sales growth to 55% year-over-year in the fourth quarter.

Amazon released several new formats and placements for Sponsored Brands in 2020, causing advertising spend to differ from the traditional top sponsored brand search results. However, sponsored products remained the strongest ad format from a revenue per click perspective, while the relative revenue per click of sponsored brands fell to 96%. Sponsored display ads were way below sponsored product and sponsored brand ads at 69%, improving Q / Q but declining year over year.

Social

Spending growth on Facebook remained similar to the third quarter, mainly driven by the year-over-year increase in CPM for the first time since Q1 2020, growing 10% year-over-year. This is mainly due to advertisers pulling back to re-enter earlier in the pandemic, as well as an increase in ads for presidential elections.

Instagram followed a similar pattern as Facebook’s fourth quarter growth, and Stories continued to gain share of spend, accounting for 33% of spend for participating advertisers. While Instagram ad spend increased 30% year over year in the fourth quarter of 2020, it decreased slightly from the third quarter. Similar to 2019, the growth of impressions also slowed in the fourth quarter compared to Q2 and Q3. CPM rose year over year for the first time since the fourth quarter of 2019.

Smaller social platforms like Pinterest, Snapchat, and Twitter continued to receive solid investments from advertisers who participated in them. All three platforms received a similar portion of the advertiser’s budget, with Pinterest accounting for a 14% stake, displacing Snapchat and Twitter, which both received 12% of the social budget portion paid.

“While the fourth quarter was not immune to ongoing economic pressures, it showed promising signs of pre-pandemic performance, particularly for the retail and travel industries as the new year begins,” said Melissa Reilly, Performance Media and Marketing Communications, Deputy Director at Merkle. “The channels are still trying to adapt to ever changing trends in consumer behavior, but we are seeing trends that highlight a steady return to the levels of the past few years.”

Merkle will host a webinar on Tuesday, February 2 at 1:00 p.m. EST to discuss the report. Download the full report here to learn more about the DMR’s results for the fourth quarter of 2020.

About Merkle

Merkle is a leading data-driven customer experience management (CXM) company that specializes in delivering unique, personalized customer experiences across platforms and devices. For more than 30 years, Fortune 1000 companies and leading nonprofits have worked with Merkle to maximize the value of their customer portfolios. The company’s legacy in data, technology and analytics forms the foundation for its unmatched ability to understand consumer insights that lead to hyper-personalized marketing strategies. The combined strengths in the areas of performance media, customer experience, customer relationship management, loyalty and enterprise marketing technology ensure improved marketing results and competitive advantages. With more than 9,600 employees, Merkle is headquartered in Columbia, Maryland and has more than 50 additional offices in the US, EMEA and APAC. Merkle is a Dentsu company. Further information is available from Merkle at 1-877-9-Merkle or at www.merkleinc.com.