Paid media marketers struggle to find time to keep up with all the trends and changes that are ever-present in the industry, so it’s nice to get a big picture stamp of where we stand right now in PPC. Hanapin Marketing’s 2017-2018 State of PPC Report distills the responses submitted by hundreds of marketing professionals from agencies and in-house teams, uncovering insights across AdWords, Bing, Facebook and Instagram for the current year.
As we move into 2018, marketers are reflecting on industry trends over the last year and looking to understand what’s to come. As the most comprehensive industry summary out there, Hanapin’s report is the perfect PPC year-end review AND the perfect briefing for the year to come.
PPC Spend Trends
PPC marketers have allotted a larger budget for PPC marketing activity than ever before. In 2014 marketers and advertisers were still trying to justify PPC in their marketing budgets at all. Today 79% of advertisers say their budget is higher now than it was in 2016 and it will be even greater next year. From this point of view proponents of PPC are doing a great job at conveying its value.
Most plan to increase their budget on Google AdWords and Facebook, but mobile, Bing ads and Instagram are not far behind as shown in the image below (at least 67% of advertisers include Instagram in their budget). Hanapin warns though that as channels like Facebook become saturated in the coming years, marketers should start testing new channels like Pinterest now.
PPC publishers are spending about the same on paid advertising as they were in previous years in terms of ad spend. Agencies tend to spend more than brands or in-house teams. While ad spend overall is steady, the spend per PPC channel type has increased. 72% of advertisers are spending more on social advertising than in previous years and 60% are spending more on text and mobile ads. Display (not Programmatic) experienced an 18% decrease in annual investment from advertisers, which was the biggest drop.
By industry, the Retail, Education, Travel and Publishing sectors are spending the most on PPC advertising. This could be as a result of high average industry CPCs and CPAs or simply because these industries tend to invest more in PPC, or a combination of both. The Automotive, Home Improvement and Consumer Packaged Goods industry sectors tend to spend the least on PPC.
Ad Type Trends
There are so many different forms of paid media ads, marketers need to understand which type drives the most revenue for their industry. For some display ads may work better than Facebook ads and for others Google Shopping ads may be more appropriate, it really depends. While marketers should get granular on what works for their unique marketing initiatives, getting a general sense of what works overall is a great place to start.
In terms of effectiveness, text ads won, closely followed by remarketing ads. Mobile and social were not doing as well as anticipated, in third and fourth place, which Hanapin remarks was most surprising. They speculate that perhaps advertisers aren’t understanding how to put together proper strategy behind these channels or are only doing the minimum amount of work, since new features and improvements in social and search (mobile) should have given advertisers a better performance by now. The least effective form of paid ads surprisingly was native.
Tip for Improving Advertising Effectiveness:
“Advertisers should be thinking first about the endgame and then moving backwards. For example, if the goal is for mobile users to call, the ad and landing page should clearly emphasize the phone call. Or, if the goal is more Facebook likes, the brand should put out engaging and relevant content. These entities can show positive returns as long as the process is clearly defined.”
There are all types of tools and techniques that make the practice of paid advertising work, in some cases more effectively than others. Hanapin asked marketers what was most important to their ability to optimize and convert, these were the results:
Clearly the PPC landscape is complex and there are different channels, technologies and techniques that can shape a campaign for better or for worse.
Well Played PPC Publishers..Well Played
Although some forms of PPC are growing faster than others, the health of the industry is good overall. With in house teams and agencies being able to better sell paid media marketing services to their clients or bosses than ever before, publishers are reaping the benefits.
Despite ongoing innovation from publishers like Facebook and AdWords however, some marketers aren’t experiencing the level of success they had hoped for. This doesn’t mean that investments in these channels are declining though.
Hanapin summarizes their top three insights from the industry in the following points:
- “Proven platforms Google and Facebook, continue to dominate digital dollars, with Bing Ads, Mobile, and Instagram trailing closely behind.”
- “Despite the effectiveness of social being on a slow incline, majority of companies are investing more of their PPC budgets on social ads, in comparison to year’s past. This emphasizes the importance digital leaders see in social networks, even if performance hasn’t reached a desirable success rate yet.”
- “Mobile was seen as the most important aspect of the digital marketing industry over the last 12 months.”
Understanding the state of the PPC industry will give marketers an edge. Have a sense of the health of the industry as a whole and be able to identify trends that can affect the success of campaigns ahead of time. By comparing previous year’s reports to now, marketers can expect to find growth trends in key areas included like budgets, ad types and more. As you prepare for the new year and wind down 2017, we hope that with Hanapin’s State of PPC Report on your side, you’ll know where you stand and where to grow in 2018.
All screenshots by Chandal Nolasco da Silva. Taken December 2017 from Hanapin Marketing.