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Facebook Ad Spend Drops for the First Time Since Q1 2018, Merkle Finds

Facebook Ad Spend Drops for the First Time Since Q1 2018, Merkle Finds

PerformanceIN

Merkle’s annual Digital Marketing Report found that Facebook ad spend fell 2% from Q1 2018 whilst ad spend on Amazon rocketed.

With Q1 done and dusted, Merkle’s latest Digital Marketing Report found that Facebook ad spend, excluding Instagram, fell 2% from Q1 2018. Since Merkle began its annual report in 2011, this is the first time there has been a year-on-year decline in ad spend on the social media platform.

Instagram continues to drive most of the increase in investment across Facebook properties, with advertisers spending 19% as much on the platform as they did on Facebook, and a 44% increase in ad spend from last year. Overall, paid social spend grew 24% in Q1, overtaking the 12% gain for traditional advertising.

Paid search spending continues to drop, with Google’s growth falling 16% from a year earlier and spend across Bing and Yahoo both down 3%. Google Shopping again was the primary driver of click growth, as spend for the format increased more than 40% year-over-year for the second straight quarter.

Facebook and Instagram saw less growth from advertisers across the two platforms whilst smaller platforms like Pinterest continue to gain momentum among retail advertisers. In addition, despite issues around brand safety, advertisers on YouTube roughly doubled spend.

It seems as though marketers are shifting their budgets to Instagram for paid social placements as the platform has recently launched new features, including the Checkout tool which lets consumers complete purchases in-app.

The report also highlighted the growth of e-commerce giant Amazon. Amazon advertisers saw sales attributed to its Sponsored Products and Sponsored Brands ad formats more than double, with spend growing 19% and 77% for those formats, respectively. Meanwhile, Sponsored Products accounted for 85% of all Amazon spend, with over half coming from placements other than the top search results.

“The report breaks down valuable data from the key media platforms and provides valuable lessons from some of the most impactful updates these platforms saw in Q1. As the marketing landscape continues to evolve, our team at Merkle is committed to ensuring our clients have thoughtful analysis and insight into the trends impacting their business,” said Erin Hutchinson, senior vice president of marketing at Merkle.

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Joele Forrester

Joele Forrester

Joele is a journalist at PerformanceIN reporting news from the world of performance marketing, while also reporting live at events, writing feature articles and interviewing key industry players.

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