Being a paid media professional, whether you’re in-house or with an agency, has its own set of challenges. Digital advertising is constantly changing, and 2018 was no exception as we saw the popularity of Amazon ad offerings skyrocket, major changes to Google’s offering, Facebook platform issues and updates, and much more.
Hanapin Marketing’s annual State of PPC Report provides countless insights for digital media marketers, including what to expect for the coming year. The report is based on the feedback of over 400 marketers, including influencers and decision makers from brands and digital marketing agencies.
The participants represented a broad spectrum from across industries including: retail, technology, finance, healthcare and publishing. This year, respondents were from brands (45%) and agency professionals (57%), with the titles including specialists (27%), managers (46%) and directors and above (27%).
This report provides intelligence for digital marketers on where they should (or shouldn’t) be focusing their budgets and identifies potential opportunities for 2019.
PPC Spending Trends
Pay-per-click (PPC) is a critical piece of search engine marketing, which is why it’s not surprising that in this report, 79% of marketers say PPC is a huge driver for their business.
62% of marketers are planning to increase their PPC budgets in the next 12 months, while 35% will keep budgets the same. 68% of brands say their budget for 2019 is bigger than last year, and 18% are saying it’s “much bigger.” Plus, agencies shared that 67% of clients have bigger budgets for PPC in 2019.
When it comes to ad spend by platform, the report found that over 60% of marketers are planning to spend more on text ads, whereas only 49% are planning to spend more on social ads. This is in sharp contrast with last year’s report where marketers indicated they would be spending 72% more on social ads.
The choice of marketers to shift budget away from social has been prompted by a few key changes to the landscape, including marketers experiencing decision fatigue from all of the social advertising options available, Facebook’s removal of partner categories in March 2018, and an early 2018 Newsfeed update that rocked organic reach. These changes, in addition to the repercussions of GDPR on consumer data and frequent Facebook issues eroding trust with consumers, can also account for some of this shift away from social ads.
While social advertising may be lagging, the next 12 months are expected to see an increase in Google Ad spend. Google Ads are the largest area of increase, compared to 78% last year.
Video is another area where budget changes are predicted this coming year. Video advertising has steadily increased in popularity, and since videos can also be used on social platforms, it presents additional opportunities to reach a wider audience.
When it comes to spending trends by vertical, business services, retail and automotive are spending the most, while SaaS, healthcare and consumer services are spending the least on PPC.
Ad Types & Platforms
Not all platforms are created equal, so knowing where to focus your efforts and how to effectively use your ad dollars is critical.
In the past few years, personalization has become a critical component to any effective marketing strategy. So, unsurprisingly, 71% of marketers indicated that text ads were seen as the most effective due to the level of customization and personalization possible. Text ads also require less budget due to size and scope, and they can easily be adjusted as features get updated.
Conversely, display ads are seen as the least effective as they’re the least targeted and challenged with last click attribution. Only 3% of marketers indicated that they were the most effective, compared to 54% saying they were effective in 2015.
The issue with display ads has always been the difficulty of quantifying their reach, and as such, marketers want to focus more on areas where they can confirm results and see solid data on what is or isn’t working.
Trends to Watch for in 2019
With 2019 just around the corner, there are several trends predicted to be front and center in the new year.
According to the Hanapin report, artificial intelligence was cited as the #1 most important aspect of digital advertising in 2018. This is a hot topic, and it will continue to be in 2019 as machine learning evolves and continues to have a positive effect on digital advertising.
Conversion Rate Optimization and attribution were also cited as being important to marketers in 2018, while ad blockers, cloud computing and chatbots were seen as the least important. Chatbots that were noted as something that most marketers don’t fully understand, and 31% of respondents said they feel unprepared for chatbots. This is likely the result of marketers being unsure how to use chatbots to engage customers.
Amazon advertising is on everyone’s mind, but only 9% of marketers surveyed are advertising on this platform. With Amazon making 44% of ecommerce sales, there’s no doubt this platform is here to stay.
While it may be in its early days, it’s important for advertisers to establish their brand and start learning what Amazon ads can do for them. As this is a relatively new digital advertising platform, marketers can expect improvements over time.
The early results reported from Amazon advertisers are encouraging. Of the people that are using Amazon for ads, 72% indicated they’re seeing some success despite some of the challenges with reporting, the interface and conversion attribution.
When it comes to ensuring you’ve created a winning digital ad strategy for 2019, understanding the industry and emerging trends gives you critical intelligence in terms of where to invest and potential growth opportunities. With the Hanapin Report at your fingertips, you’ll have a competitive edge as you kick off 2019.