Quarterly Report Q1 2023 in Digital Marketing: Skai

Today, Skai is an omnichannel platform for performance marketingreleased its Q1 2023 Digital Marketing Quarterly Trends Report, an in-depth analysis of the Digital Marketing Trends that defined the first quarter of this year, along with an interactive infographic detailing key analyses. While spending growth continued across multiple performance channels, it slowed overall in Q1 2023 compared to Q4 2022. This reflects advertisers’ caution in the face of uncertainty about the global economy, even as collaborations with key digital channels continued to advance.

Advertisers value efficiency
In each channel, the volume of ads clicked or seen increased while unit prices decreased. This behavior implies that while advertisers are still focused on their most important digital channels, this does not necessarily translate into spending growth. Within channels and publishers, new and improved ad types and campaign strategies give marketers more opportunities to increase the efficiency of their programs without increasing budgets.

Cautious spending is hampering growth
Spend growth across all channels slowed in the first quarter as advertisers continued to tread cautiously amid economic uncertainty. Retail media spend grew 30% year over year, paid search spend grew 4%, and paid social budgets shrank 3%. All of these metrics were down compared to Q4 2022 results. Quarter-on-quarter (QoQ) spend was broadly in line with postseasonal expectations, with retail media, paid search, and paid social spending down 14%, 20%, and 25%, respectively.

Retail media expanded without sacrificing performance
Even with a 30% year-over-year increase in spend, advertisers see an improvement in performance metrics. Return on ad spend (ROAS) for the channel improved 2% year over year while cost per action (CPA) fell 8%, suggesting that despite rapid growth, retail media has not yet reached the point where where revenue for advertisers is declining.

Other QoQ and YoY results include:

“With no clear up or down direction in the economy, it shouldn’t surprise anyone that most advertisers aren’t making big budget moves in any direction,” he said Chris Costello, senior director of marketing research at Skai. “Indeed, we are seeing a microcosm of the overall economy across channels, with some segments posting strong results, particularly in terms of retail media shopping behavior and paid search, while other areas are implicitly or explicitly more sensitive to costs as ad prices fall.”

You can find more information and the infographic at skai.io/digital-marketing-trends/.

methodology
The analysis is based on a population of approx 9 billion dollars in ad spend over five quarters, comprised of 3,000+ advertiser and agency accounts across 40 vertical industries and 150+ countries running on the Skai™ platform across Google, Microsoft, Baidu, Yandex, Yahoo! run. Japan, Verizon Media, Amazon, Walmart, Instacart, Criteo, Kroger, Apple Search Ads, Pinterest, Snapchat, Facebook and Instagram. Unless otherwise noted, only advertisers with 15 consecutive months of performance data are included. Some other outliers were excluded. Advertising spend and prices, where applicable, have been converted to US dollars at the time of spend.

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