Digital advertising prices have been on the rise across various channels, but interestingly, the performance has remained consistent, according to new data from Skai. In the second quarter of 2024, digital advertising spend increased in retail media, paid search, and paid social, despite the increase in ad prices.
The numbers show that retail media spend grew by 21% year-over-year, while paid search spend increased by 6% YoY, and paid social spend rose by 13% YoY. The growth in spending can be attributed to higher ad prices, although ad volumes such as clicks and impressions have slowed down or even decreased in some channels.
What’s intriguing is that despite the higher prices, key performance metrics like conversion rates have largely kept pace. This suggests that ad efficiency has improved, and advertisers can still achieve their desired results despite the increased costs.
This presents potential opportunities for advertisers who can effectively navigate the changing landscape and aren’t deterred by the constant updates in artificial intelligence (AI). Advertisers need to adapt their strategies to handle the higher prices but should take note that historical trends indicate that this period of price increases may be temporary.
The shift to newer ad formats like Google’s Performance Max and Meta’s Advantage Shopping Campaigns+ is also contributing to the changing dynamics. Performance Max now accounts for 13% of paid search spend on Skai’s platform, while Advantage Shopping Campaigns+ spending grew nearly 6 times YoY but still only makes up 5% of Meta spend.
Overall, advertisers are facing a complex landscape of rising costs and evolving ad formats. However, they have been able to maintain performance through optimization and the use of new tools. It is essential for advertisers to stay informed and adapt their strategies to make the most of the opportunities presented in this changing digital advertising landscape.
For more detailed information, you can read the full Q2 2024 Quarterly Trends Report from Skai. As advertisers continue to navigate the challenges of rising costs, it’s crucial to stay updated on the latest trends and insights to make informed decisions and maximize their advertising efforts.
