PPC ads: search in decline, social on the rise – report
- Thursday, October 26th, 2023
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The latest global PPC report by DataFeedWatch.com reveals a 7 percentage point drop in the use of search-based channels by advertisers in 2023. This shift is accompanied by a rise in social media channels such as TikTok and Facebook. These changes have significant implications for PPC advertising strategies in the five largest retail sectors, the company said.
Datafeed.com’s Multichannel Marketing Report 2023 gathered data from over 16,000 online stores from over 60 countries and across 20 major industries. It found that search-based channels have declined by more than 7 percentage points, while social media channels have increased by over 3 percentage points for eCommerce advertising. The shift is attributed to a decrease in overall ads from 2022 to 2023, and a transfer of budgets to social channels.
“Moving to social media is a global trend,” said Jacques van der Wilt, General Manager of Feed Marketing at DataFeedWatch.com. “In this case, pay-per-click advertising is following customers reactively. The most impressive growth can be seen with TikTok, but most large social channels have increased their advertising shares at the expense of the Search channels like Google or Bing.
Social commerce is expected to grow three times faster than traditional eCommerce, doubling its current value by 2026, according to a new study by Accenture. It is also projected to increase to $2.9 trillion by 2026 (Statista), more than doubling its current value. Affiliate channels remain a fairly underexplored type of advertising. At the moment, 11 per cent of all advertisers use this type of advertising.
Although the overarching trend shows a decline in the use of search channels by retail advertisers in favour of social channels, there are still large differences in each industry. Fashion retailers are increasingly turning to Google, with its share rising from 41.4 per cent in 2022 to 47.5 per cent in 2023. This suggests a growing preference for proven advertising platforms. TikTok has also gained traction as a significant advertising platform for this industry. Over the course of the last year, advertisers have doubled their use of TikTok in their advertising strategies.
The electronics sector is becoming more open to personalized advertising, with custom channels, increasing its share from 25 per cent to 29 per cent between 2022 and 2023. In the Furniture industry, Google Shopping has become the top choice for advertisers, growing from 30.5 per cent in 2022 to 38.6 per cent in Q2 2023.
In the Health & Beauty sector, mainstream channels like Google Shopping and Facebook are becoming more popular, with Google Shopping’s share increasing by over 11 percentage points between 2022 and 2023. Custom channels have seen a decline of almost 10 percentage points which means that custom channels may not be the right choice for the Health & Beauty sector. TikTok is climbing the list of popular channels for this sector. From the beginning of 2022 to Q2 2023, its usage among Health & Beauty merchants grew 5x.