Kenshoo Quarterly Trends Report Q4 2017 … · Social data: Facebook, Instagram. October 2016 through December 2017 Sample contains over 500 billion impressions, 14 billion clicks

Confidential and Proprietary Information

Q4 2017January 17, 2018


➢ All attendees are in listen-only mode

➢ Please submit any questions via the panel on the right-hand side of your screen

➢ Materials and downloads can be found under the ‘handouts’ section of the webinar panel

➢ Sound issues? Participants can access audio via the telephone of computer mic & speakers

➢ Please email [email protected] if you are experiencing any issues

Webinar Information


Chris ‘Coz’ Costello

➢ Senior Director of Marketing Research

➢ [email protected]

➢ linkedin.com/in/notabbott

➢ @notabbott

Your Host

mailto:[email protected]

Agenda➢ Methodology

➢ Industry Insights

➢ Holiday 2017 Recap

➢ Market Trends

➢ Emerging Channels

➢ Q&A


Methodology

For Q4 of 2017, we are introducing a change to our methodology.

• Advertisers must have 15 consecutive months above a minimum spending threshold to be included in the analysis

• Some advertisers that are managed by agencies will be held out based on aggregate behavior of the agency

• Some additional outliers will be removed

Benefits of the new methodology:

• More in line with “same store” industry standard

• Lessens impact of agency relationships

• Helps “tame the long tail” of advertisers, which was the goal of the previous methodology as well


About the Data

Search data included Google, Bing, Yahoo!, Yahoo Japan, Baidu, Yandex, Pinterest. Social data: Facebook, Instagram.

October 2016 through December 2017

Sample contains over 500 billion impressions, 14 billion clicks and $6.5 billion in advertiser spend

For charts showing spend and impressions/clicks, volume metrics have been normalized to a factor of one based on the initial volume for the first quarter of data. Data points from subsequent quarters are based on a multiplier from the first quarter. For example, 1.6 Means that volume is 60% greater than volume on the initial quarter measured.

Ad spending and CPC are measured using Ex-FX or “Constant Currency” adjustments, where results are based on native currency and only translated to common currency after aggregation.

Industry Insights


0.00

0.50

1.00

1.50

2.00

2.50

0%

5%

10%

15%

20%

25%

30%

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Sp

en

din

g G

row

th (i

nd

exe

d)

Pe

rce

nt

of

So

cia

l Sp

en

din

g

Share Indexed Growth

Spending on Social Video Ads:

• Grew 57% compared to last quarter

• Grew 93% year-over-year

• Matched its high point of 25% of total social spending.

Video Share and Growth


0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Vo

lum

e G

row

th (i

nd

exe

d)

Clicks Spending

Instagram spending grew 183% year-over year

Clicks grew nearly 4X in the same period

Instagram Growth


0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Desktop Smartphone

Search Shopping Campaigns grew 34% YoY overall

Mobile search shopping campaign spending grew by approximately $3 for every one dollar of growth on the desktop.

Search Shopping Campaigns by Device


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Cli

ck-t

hro

ug

h R

ate

Sh

are

of

Ke

yw

ord

Tex

t A

d C

lick

s

ETA share of KW clicks ETA CTR Legacy CTR

80% of total search clicks have been migrated to the new format.

Expanded Text Ads continue to show higher click-through rate (CTR) than legacy text ads

Some of this can be attributed to a “more clickable” format/layout

Some of this can also be attributed to the best practice of migrating better-performing campaigns first

• Average CPCs for ETA vs. Legacy keywords are consistent with this pattern as well

Expanded Text Ad Migration


The Common ThreadWhat do Social Video, Instagram and Mobile Search Shopping Campaigns have in common? Visuals.

For example, mobile shopping results—and mobile shopping images in particular—take up a larger percentage of the user’s overall screen.

This facilitates a more “immersive” ad experience that can encourage interaction and engagement.

Holiday 2017 Recap


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cyber Five Post-Thanksgiving Week Before Christmas Total Holiday Season

Sp

en

din

g G

row

th Y

OY

E-Commerce Advertisers Only

Social Search

Social ad spending for e-commerce advertisers grew fastest during the "Cyber 5" between Thanksgiving and Cyber Monday

Search ad spending rallied the week before Christmas.

In both cases, spending increases focused on peak periods at either end of the holiday season

Retail Spending Growth by Holiday Period


0%

5%

10%

15%

20%

25%

30%

35%

Black Friday Cyber Monday

Pe

rce

nt

of

tota

l “C

yb

er

5”

spe

nd

ing

E-Commerce Advertisers Only

Social Keyword Search Search Shopping Campaigns

Cyber Monday is still the biggest day overall for online e-commerce ad

spending, but:

• Social spending peaked on Black Friday

• Search shopping campaigns ended level between the two days.

Black Friday vs. Cyber Monday

Market TrendsSocial

Q4 2018

Social Highlights

The drop in Social impressions was once again fueled by a sharp decrease in low-CPM, low-CTR desktop ad units.

Removing low-CTR ads, coupled with increasing adoption of high-engagement Carousel ads, helped drive both click volume and click-through rate to their highest levels over the last five quarters.

The decrease in low-cost impressions is a big influence on the YOY change in CPM, which would only increase by a more modest 13% if that desktop inventory was left out.


Social Trends

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Ind

exe

d V

olu

me

(Q4

20

16

=1

.00

)

Social Volume Growth

Impressions Clicks Spending

Impressions

+ 20% QoQ

- 5% YoY

Clicks

+39% QoQ

+73% YoY

Spending

+38% QoQ

+39% YoY


Click-through Rate

+15% QoQ

+83% YoY

CPM

+15% QoQ

+47% YoY

Both of these metrics are affected by 2017 structural changes in

Facebook ad inventory

Social Trends

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Click-through Rate

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Average Cost per Thousand Impressions (CPM)


0.00

0.20

0.40

0.60

0.80

1.00

1.20

2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4

Vo

lum

e G

row

th (i

nd

exe

d t

o Q

4 2

01

6=

1.0

0)

Social Impressions by Placement

Desktop Right Hand Column Desktop Feed Instagram Mobile Feed Mobile Other

Desktop Right Hand Column Ads have been phasing out since early 2016

These ads are low-CTR and low-CPM, so their removal will increase those metrics in aggregate, even in the absence of other trends

Those increases are not because the remaining ads got more expensive or more engaging, or at least not solely for that reason

A Refresher on Social Desktop Impressions


$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4

Vo

lum

e G

row

th (i

nd

exe

d t

o Q

4 2

01

6=

1.0

0)

Desktop Right Hand Column Desktop Feed Instagram Mobile Feed Mobile Other

The Mobile Feed—the largest segment of social ads—has demonstrated fairly stable CPM trends

Desktop RHC ads were also masking the premium pricing of Desktop Newsfeed ads

Social CPM by Placement


$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Social Cost Per Thousand Impressions

All Placements Excluding Desktop Right Hand Column

Removing Desktop Right Hand Column ads gives a much flatter CPM trend

Much more stable over time

CPM increased 9% QoQ

Only a 13% increase YoY, compared to 47% when all placements are included

Adjusting Social CPM for Layout Changes


0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Social Click-through Rate

All Placements Excluding Desktop Right Hand Column

Even without Desktop Right Hand Column Ads, social ad engagement is increasing

Up 10% compared to last quarter and 40% compared to last year

Much of this increase is due to the high level of interaction with Carousel format ads

Adjusting Social CTR for Layout Changes


Impact of Impression Inventory Changes

The drop in Desktop Right Hand Column ads is apparent, but the full impact isn’t quite clear from this chart.

-100% -50% 0% +50% +100% +150% +200% +250%

Desktop Right Hand Column

Desktop Feed

Instagram

Mobile Feed

Mobile Other

YoY Change

CTR

CPM

Impression SHARE

Impression VOLUME


Impact of Impression Inventory Changes

The size of the bubble is the total volume of impressions. The decline in Desktop Right Hand Column impressions lessens it’s “gravitational pull” on overall CPM and CTR.

Desktop Feed


Instagram

Mobile Feed

Mobile Other

TOTAL

0.0%

1.0%

2.0%

3.0%

4.0%

$0.00 $5.00 $10.00 $15.00

Cli

ck-t

hro

ug

h R

ate

Cost per Thousand Impressions (CPM)

Q4 2016 Q4 2017

Desktop Feed


Instagram

Mobile Feed

Mobile Other TOTAL

0.0%

1.0%

2.0%

3.0%

4.0%

$0.00 $5.00 $10.00 $15.00

Cli

ck-t

hro

ug

h R

ate


Q4 2016 Q4 2017


Key Segment Analysis

We can apply this type of visualization to the key segments in the channel.

The categories do not need to be mutually exclusive

For example, mobile ads can be video ads, but we still want to consider them as separate segments, even if they overlap

This will allow for a single view of spending volume, pricing and engagement changes


Key Social Segments

In the last year, mobile and overall social have almost converged into the same thing. Dynamic Ads for Products have increased CTR with only modest CPM increases.

MobileDynamic Ads for Products

Video

Instagram

Mobile App Install

TOTAL

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00

Cli

ck-t

hro

ug

h R

ate


Q4 2016 Q4 2017 (Bubble size = Spending Volume)

Mobile

Dynamic Ads for Products

Video

Instagram

Mobile App Install

TOTAL

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 $10.00

Cli

ck-t

hro

ug

h R

ate


Q4 2016 Q4 2017 (Bubble size = Spending Volume)


0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Nu

mb

er

of

acc

ou

nts

(in

dex

ed

to

Q4

20

16

=1

.00

)

Number of Accounts using DPA

Number of Accounts

The number of Kenshoo social accounts using DPA in our sample increased 44% since Q4 of last year

Since these are all advertisers who have had consistent spend, these are advertisers who spend on social, but only just started on DPA

23% of the overall YoY spending increase on DPA came from these accounts

Dynamic Ad adoption


0% 10% 20% 30% 40% 50% 60% 70% 80%

Other

Media & Entertainment

Finance

Travel

Gaming

E-Commerce

Video Spending Share by Industry YoY

Q4 2017 Q4 2016

Video ads not just for branding anymore

• Traditional direct response verticals like E-Commerce, Travel and Finance have invested much more heavily in video this year compared to last year.

• In the case of Finance, total video ad investment increased YoY by a factor of 7, while E-Commerce and Travel nearly tripled.

Video by Industry

Market TrendsSearch

Q4 2018

Search Highlights

Mobile Shopping Campaigns were the biggest driver of both impression and click growth, and now make up the largest share of impressions across all of paid search.

Desktop keyword search CPCs grew by 5% compared to last year, bucking the overall CPC trend and leading to a 1% increase in YoY spend for the venerable search format.

While mobile shopping campaigns were the fastest-growing segment across search, they also have relatively low CPCs compared to other devices and ad types, driving the overall downward trend on search pricing.


Search Trends

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Ind

exe

d V

olu

me

(Q4

20

16

=1

.00

)

Search Volume Growth


Impressions

+26% QoQ

+19% YoY

Clicks

+16% QoQ

+21% YoY

Spending

+17% QoQ

+12% YoY


Click-through Rate

-7% QoQ

+2% YoY

Average CPC

0% QoQ

-8% YoY

Search Trends

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Click-through Rate

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Average Cost per Click (CPC)


Key Drivers for Search Growth

Mobile Search and Shopping Campaigns have consistently driven search growth, and combined, they are the fastest growing segment.

+12%

+1%

+17%

+13%

+47%

+0% +5% +10% +15% +20% +25% +30% +35% +40% +45% +50%

OVERALL SEARCH

Desktop Keywords

Desktop Product Ads

Mobile Keywords

Mobile Product Ads

Search Spending YOY Growth by Segment


Key Search Segments

Smartphone keywords saw in increase in click-through rate, while desktop keywords were the only key segment to increase in cost-per-click

Desktop Keyword

Shopping Campaigns

Smartphone Keyword

Smartphone Shopping

Mobile

TOTAL

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00

Cli

ck-t

hro

ug

h R

ate

Average Cost per Click (CPC)

Q4 2016 Q4 2017 (Bubble size = Spending volume)

Desktop Keyword

Shopping Campaigns

Smartphone Keyword

Smartphone Shopping

Mobile

TOTAL

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00

Cli

ck-t

hro

ug

h R

ate

Average Cost-per-click (CPC)

Q4 2016 Q4 2017 (Bubble size = Spending volume)


Mobile Share of Total Volume

0%

10%

20%

30%

40%

50%

60%

70%

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017


Mobile search continues to drive a higher share of clicks than either impressions or spending, indicating higher levels of engagement for customers and good value for marketers.


0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Spending Volume using Automated Bidding

Spending Volume (indexed)

Kenshoo gives advertisers multiple ways to automate the bidding strategies of their search campaigns

This is a separate functionality from publisher-based automation, such as Google Smart Bids.

Search spending under auto bid management has grown 35% YoY, while manually-controlled spend has shrunk by 2%

Automated Bidding

Emerging Channels


E-Commerce Channel Advertising Growth


Goals on Amazon

• Drive increased brand awareness

• Optimize keywords and campaigns at scale

• Promote product sales

Client Success with Kenshoo E-Commerce

APPROACH:• Group By ASIN• 1-, 7-, & 14-Day Conversion Windows• Budget Pacing• Product Eligibility Insights

+28%ROI

-32%CPA

+13%CVR

-23%CPC


0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

Q1 2017 Q2 2017 Q3 2017 Q4 2017

Ind

exe

d S

pe

nd

ing

Vo

lum

e (Q

1 2

01

7=

1.0

0)

Advertiser investment in Pinterest showed momentum going into the holiday season

Spending grew 51% over the previous quarter, and has increased threefold since the beginning of the year

Pinterest Growth


Goals on Pinterest

• Scale Pinterest advertising

• Reduce manual effort for advertising their 500,000+ products

Client Success with Pinterest

APPROACH:• Automated Campaign Building• Enhanced Reporting• Bulk Bid & Budget Optimization

+784%Click

Revenue

+98%ROAS

+144%Traffic

100sHours Saved

Q&A

Marketing Research and Analysis @ Kenshoo

Q4 2017 Search and Social Snapshot

kenshoo.com/digital-marketing-snapshot

Other insights are posted regularly to

kenshoo.com/blog

THANK YOU!

Documents

Kenshoo Quarterly Trends Report Q4 2017 … · Social data: Facebook, Instagram. October 2016 through December 2017 Sample contains over 500 billion impressions, 14 billion clicks