Rising prices tend to draw attention, both in the advertising world and in the real world. Skai goes so far as to say it’s a “dominant theme” of the year so far.
“There have been anecdotal reports that search advertisers are turning to other channels like paid social because search clicks have become too expensive, but also reports that social advertisers are doing the opposite for the exact same reason,” says the introduction to the company’s Q2 2024 Quarterly Trends Report. “Clearly, we are in a period of rising ad prices.”
The report, of course, gives context of similar cycles in past years and the typical compensations that ensue, but adds there’s “evidence that those more expensive clicks are working harder.”
Total spending increased across retail media (+21% year-over-year), paid search (+6% YoY), and paid social (+13% YoY) on Skai’s advertising platform, with each seeing a quarter-over-quarter increase as well. The hard work shows itself in increased clickthrough rates, as EMARKETER illustrates, with a 1.63% CTR for search that was “more than double that of social (0.66%) and quadruple that of retail media (0.39%).”
(Source: EMARKETER)
Skai looked at its four-plus years of trend reports and found that past YoY price increases eventually lead to lower prices. “In fact,” the report says, “Q2 YoY price increases were less than last quarter in all channels, signaling that price relief may come soon.”
“Fundamentally, digital advertising spending is up across all channels, with ad prices acting as a bigger tailwind than the volume of clicks and impressions,” the report says, “but those year-over-year price increases seem to be narrowing, so the winds could shift in the second half to the point where clicks and impressions are once again on the front foot.”
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