Digital ad spend: Paid search continues to dominate in 2019

Marin Software surveyed nearly 500 digital marketing decision makers in May and June of 2019. The survey included marketers from B2B and B2C companies, each of whom are responsible for an annual digital advertising spend of between $1-9 million (69%) and 10M-49M (31%).

The survey found that the top priority for marketers this year is in increasing brand awareness, followed by enhancing customer experience. At the tactical level, 20% of respondents indicated a that they are embracing omnichannel marketing and social media. Optimizing paid search was also a top tactical priority, proving that paid search remains a key initiative for top marketers in 2019.

Paid search dominates the digital ad landscape

Paid search is the clear winner when it comes to digital ad spend, with respondents indicating that paid search comprises 40% of their digital ad budgets. This is about twice as much as the second highest contender—paid social which comprises just under 20%. Other top channels include display, YouTube, Mobile/In App ads, ecommerce (Amazon), and ecommerce (other).

The top challenges differ across channels

Survey respondents were asked to list their top challenges across three channels—search, social, and Amazon.

Meeting volume and efficiency goals were cited as the top two challenges for paid search, with 29% and 28% of respondents listing these as key challenges in 2019. Integrating product feeds was also listed as a paid search challenge by 27% of respondents.

The top paid social challenge was attribution/cross-device measurement, followed by generating quality creative and brand safety.

Amazon is a relatively new player in the digital ad space, so it’s no surprise that 32% of respondents listed leveraging audience data (first and third party) as the top challenge with this channel. 30% of respondents indicated that understanding Amazon advertising techniques posed a challenge.

Google, YouTube and Amazon top the list of most trusted publishers

Data privacy is a big concern among advertisers, particularly with the EU’s implementation of GDPR last May. Respondents were asked to rate a list of top publishers based on a trust index from 0 to 5 (with 0 being the least trusted and 5 being the most).

Google came out on top, with a trust index of 4.5, followed by YouTube at 4.3. Other top-trusted publishers include Amazon (4.2) and Facebook and Instagram (each at 4.1). The least trusted publishers were Verizon, Pinterest, and Bing.

Respondents listed data privacy, tracking restrictions and ad blocking as some of the top challenges or trends impacting their business this year, along with video advertising. Other impactful trends and challenges include visual search, ad fraud, brand safety, influencer marketing and messaging apps/bots.

A few words about Amazon

Amazon is an up and coming player in the mix of digital ad publishers, with fully 60% of respondents indicating that they are increasing their Amazon budget this year. Nearly all respondents indicated that this budget will be incremental and will not cannibalize existing ad budgets.

Advertisers see Amazon as source of growth, with 18% of respondents utilizing it to capture people at the start of the buying journey.

Amazon’s DSP platform which serves display and video ads on Amazon and partner sites such as IMDb is the preferred format of survey respondents, with 43% indicating they are currently using it. Sponsored products and sponsored brand ads are utilized by 40% and 39% of respondents, respectively.

Trends that will influence 2020 spending

Marin asked respondents about the most popular trends in digital advertising including what tactics they’ll continue to implement in 2020.

Responsive Search Ads—an ad format that Google introduced in mid 2018, is a top trend in 2019 with 83% of respondents indicating they currently use them or plan to use them this year.

Shopping ad usage is also a growing trend, with 65% of advertisers indicating their shopping ad spend will increase in 2019 versus 2018. Shoppable images and shopping ad spend on paid social is also a growing trend with more than 60% of respondents indicating they expect their company’s use of these ads will increase this year compared with last.

Respondents indicated that the most effective social ad format in 2019 was video (32%) followed by stories (23%). Other top social formats include feed banner ads and carousel ads. We can expect to see ad spend increase on social platforms throughout 2019 and into 2020.

The full 2019 State of Digital Advertising report is available here (free, gated).