The digital marketing landscape is continually evolving. In addition to the ongoing shift towards mobile, search and social spend is being driven by greater interest in product focused advertising and Instagram according to the latest quarterly data from Kenshoo.
Social advertising Q1 2016
1. The rise of Instagram
Instagram now has over 400 million members globally, with Facebook committed to making it as simple as possible for advertisers to reach this audience through advertising. Essentially, any campaign you can run on Facebook, you can run on Instagram, using the same options for audience targeting. This means that advertising on Instagram is growing rapidly, contributing to the 86% YoY increase in social spend. In Q1 2016, Instagram rose to make up 14% of impressions and 17% of clicks in social advertising.
2. Product ads push spending above Q4 2015
Normally, the first quarter of the year sees a drop in spend compared to the three previous months due to Christmas. However, this wasn’t the case in 2016, with social ad spend increasing by 9% quarter-on-quarter and 86% year-on-year. This was driven by a rise in Instagram campaigns and Facebook’s Dynamic Product Ads, which allow brands to better promote multiple products on the social network. Given that marketers previously focused social advertising primarily on brand awareness, this new sales focus marks a major change in how the channel is used, increasing its impact and ROI.
In paid search, there was also a jump in product focused ads, with spend on Product Listing Ads (PLAs) increasing by 98% YoY and generating three times more clicks. So direct product ads are driving sales and demonstrating a strong return across both the social and paid search channels.
3. Mobile continues to be a key growth driver
Both on social advertising and paid search, mobile platforms are becoming dominant. Most of the 13% YoY growth in paid search spending came from marketers investing 77% more in smartphone ads, with 52% of total search clicks coming from phones and tablets. This figure is even higher on social, with spend increasing globally by 122% and clicks from mobile devices jumping 92%. This means mobile ads now account for 71% of all social clicks and 63% of spend. Advertising is also becoming increasingly focused on driving mobile app installs – 25% of social spend was on this category, up from 20% a year ago. Most marketers understand the importance of mobile, and the latest quarterly findings further underscore how vital it is to advertising strategy.
Facebook’s recent Q1 2016 results reinforce Kenshoo’s analysis. Mobile ads made up around four-fifths of its $5.2 billion advertising revenue, which had grown by 57% and was also driven by Instagram and product advertising.
For marketers, the data shows the importance of mobile and product-focused advertising to their campaigns, with mobile devices now responsible for over half of all clicks across both channels, depending on how you count it. Additionally, the findings highlight the growing opportunity for advertisers to drive significant performance gains through harnessing new ad types such as Instagram and embracing more direct response product-focused advertising, with PLAs and Dynamic Product Ads now a key part of a strong digital marketing strategy.
The findings are based on five quarters of paid search and social performance, analysing more than 500 billion impressions, 10 billion clicks and $5.5 billion in advertiser spend through the Kenshoo Infinity Suite. More detail can be found in this infographic, Kenshoo Digital Marketing Snapshot: Q1 2016.
