e-commerce ad spending increases 40%, with Amazon in the lead

e-commerce ad spending increases 40%, with Amazon in the lead

As it becomes cheaper and more profitable to advertise online, brands are flooding e-commerce, social media and search engines with investments, according to a report by Marin Software.

According to the data, collected during the second quarter of the year, aggregating data from advertisers that invest billions in ad spend on paid search, social, mobile and e-commerce, the report finds remarkable trends in social media, e-commerce, search click volume and cost-per-click (CPC).

In the social media realm, Instagram is attracting many buyers with Stories, a feature very similar to Snapchat Stories which allows users to post photos and videos that will vanish after 24 hours. According to Marin, 45% of all Instagram ad spend occurs on Stories. New features like this are providing advertisers more engaging and eyecatching ways to sell directly to their target audiences.

"Marketers are embracing newer features of well-known social media platforms, like Instagram Stories, to reach new customers and the effort is paying off," says Wesley MacLaggan, SVP of marketing at Marin Software.

Amazon continues to lead the rising wave in e-commerce as the domain sees a 40% ad spend increase. Shopping ads represented 37% of total search spend share, as Google Shopping continues to be a key source of traffic and online orders for many retailers.

"It will also come as no surprise that eCommerce continues to grow,” MacLaggan says. “And the Q2 breakout star was Amazon's Sponsored Brands, which allow brands to promote multiple products and drive customers directly to a product detail page. With 13% QoQ growth in sales and impressions, marketers are finding new value in the Sponsored Brands ad format.”

Additionally, paid search click volume has expanded globally an impressive amount, yielding 13% YOY growth. Specific industries have seen more dramatic YoY click growth, with health care rising 30%, technology shooting up 25%, and retail growing 24%.

As the healthcare industry becomes more customer-centric, its search CPCs continue to drop, opening the door for marketers to get a good bang for their buck by boosting their paid search budgets accordingly. The industry’s CPCs hit a five-quarter low at a meager $1.08. For the lowest CPCs this quarter, retail and travel took the prize with $0.38 and $0.44 respectively.

“As the lines between search, social and e-commerce continue to blur, marketers embrace the freedom to try new ad formats, while also relying on tried-and-true platforms,” Maclaggan says.

In April it was reported that Amazon was set to withdraw its e-commerce business from China.

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