Merkle Inc Q2 Digital Marketing Report Foreshadows Second Wave Trends

Via Unsplash

Merkle Inc has published its Q2 Digital Marketing Report. Their findings illuminate how trends were disrupted by the peak of the COVID-19 pandemic this year.

The takeaways:
  • Retailers benefitted from the e-commerce boom, seeing an increase in paid and organic clicks, potentially helped by Amazon’s absence from the results.
  • Brands can use the results from Q2 as a guideline for how to prepare for a potential incoming second wave of the virus. This could mean that similar consumer patterns repeat themselves, although the lack of U.S. government stimulus checks could change this.
  • Instagram ad spend and impressions showed significant growth, cementing the platform as the favorite among advertisers, surpassing Facebook yet again.

What we’ve learned: The digital advertising sphere in Q2 – like everything else – was heavily influenced by the outbreak of COVID-19, making something of an anomaly of its results.

  • Google’s organic search data showed a growth spike of 42.5% more search visits (YoY) to retailer and consumer goods sites in the US, following on from government stimulus payments.
  • Pre-COVID-19, organic search visits had been declining due to an increase in monetized search results through CPCs and paid results, but in recent months users have made more organic brand site visits than ever before.
  • Amazon paused its Google search ads for a full 12 weeks due to the overwhelming demand the company was facing, although their click and sales results remained stable.

Via Merkle Inc

Growth by numbers:

  • Instagram ad impressions saw 46% YoY growth and ad spend was up 30%.​
  • Ads through Stories on Instagram showed significant growth and were more successful than the Stories function on Facebook. Stories ads generating nearly 30% of Instagram ad impressions from 22% of total ad investment. 
  • Google US paid search clicks saw 38% YoY growth, compared to 7.2% in Q1.
  • Google US organic search visits saw 33% YoY growth in Q2, compared to -13% in Q1.
What suffered?
  • Advertisers were generally not willing, or able, to pay as much per click in Q2. Average CPCs fell nearly across the board, notably on paid search where it decreased by 22% YoY.
  • Retailers naturally experienced a decline in offline orders that their digital ads would usually stimulate. The upside was a reduction in CPCs for Google Ads.
  • Unsurprisingly, the travel industry ad budgets dropped off a cliff. While travel spend on Google gained back some ground over Q2, it was still down 47% YoY for the quarter.
  • Local Inventory Ad clicks were non-existent from the end of March until mid-May. They generated just 3% of Google Shopping clicks in Q2, down from their all-time high of 29% in Q4 last year.

Looking ahead: With a second wave on the horizon, we may see some patterns beginning to emerge and begin repeating themselves.

  • Brands are nervously anticipating the upcoming months. Government restrictions are due to return in several countries, either with or without an extension of the financial stimulus scheme in the US.
  • Retailers may not benefit from the same advantages afforded them in early Q2 by Amazon’s absence from the search results. The eCommerce Giant has likely prepared their stocks and resources for an influx of second wave shoppers.
  • Local Inventory Ads will most likely disappear again if retailers are forced to close their stores once again. In addition, we can expect CPCs to plateau or drop even further.


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