Merkle Q2 2019 Digital Marketing Report Released

digital.MARKETING.REPORT
table
of
contents
03 Executive Summary
05 Paid Search
17 Organic Search & Social
21 Display & Paid Social
24 Amazon Ads

MERKLE digital.MARKETING.REPORT Q2 2019 3EXECUTIVE SUMMARY
Total spending on US paid search ads grew 14% Y/Y in Q2 2019, as Google spend growth continued
to decelerate, while spending on Microsoft Advertising benefitted from Verizon Media’s late Q1
transition to using Microsoft search ads exclusively for its properties, which include Yahoo.
Google had served its Shopping ads on Yahoo since early 2016, and while the Yahoo volume was
small compared to the Shopping traffic Google produces on its own properties, losing it depressed
Google’s Shopping and overall search ad growth rates.
On the flip side, Microsoft’s Bing Product Ad format, which picked up the Yahoo inventory, delivered
its strongest desktop spending growth in over three years. Microsoft also gained search ad traffic that
Yahoo was serving through its Gemini platform and was able to reverse a Y/Y spend decline in Q1 to
deliver 16% overall growth in Q2. Between Microsoft and Yahoo combined, spend was 8% higher Y/Y.
Despite slightly weaker results in Q2, Google Shopping remained a key driver of overall Google
growth, though, as advertiser spending on Shopping grew 38% Y/Y. With Google announcing new
image-focused Discovery and Gallery ads in May, Shopping and its variants like Showcase Shopping
ads, have shown the potential for Google to show more visually compelling ads for a broader range of
user queries and activities.
One headwind Google will continue to face in the months ahead is the impact of Apple’s Intelligent
Tracking Prevention (ITP) on advertisers’ ability to use remarketing lists for search ads (RLSAs). Google
search ad click share for RLSAs hit a nearly two-year low in Q2 2019, as the launches of ITP iterations
2.1 and 2.2 in March and May, respectively, appeared to further diminish RLSAs on Apple devices
compared to other browsers. Google advertisers have been turning to alternative audience targeting
tools like Similar Audiences, which reached a new click share high of 8% at the end of the quarter.
In the UK market, Google trends were more positive in Q2 2019, as spending grew 18% Y/Y on
accelerating click growth. Shopping was again an important driver, as it grew to account for 72% of
retailers’ Google search ad clicks in the UK, compared to 63% in the US market.
Looking at organic search trends, DuckDuckGo was the only major US search engine to deliver
site visit growth in Q2 2019, as organic search visits fell 6% overall. Phone organic search
produced its weakest rate of growth since mid-2016 overall, but DuckDuckGo saw visits grow 64%
on mobile devices.
Amazon ads sales revenue growth continues to far outpace spend growth, up 102% and 53% for
Sponsored Products and Sponsored Brands, respectively. Brand keywords play a crucial role on
Amazon, accounting for 43% of Sponsored Products sales and 62% of Sponsored Brands sales.
Spend growth for Facebook proper – excluding Instagram – grew 8% Y/Y for the quarter, as
impressions were up 25%. Instagram continues to grow far faster than Facebook itself, and Instagram
now accounts for 35% as much ad spend as Facebook for advertisers active on both platforms.
While YouTube has experienced several spats of bad publicity over the past couple of years,
advertisers continue to invest in the platform, increasing spend 43% Y/Y for the quarter.

MERKLE digital.MARKETING.REPORT Q2 2019 4EXECUTIVE SUMMARY
paid search
·· Spending on Google search ads grew 15% Y/Y in Q2 2019, down from 16% in Q1 2019. Click growth
was slightly weaker at 10% in Q2 2019, while CPC growth was steadier at 4.5%.
·· Google Shopping ad spending grew 38% in Q2 2019, down from 41% growth in Q1 2019. With
Yahoo dropping Google’s ads in favor of Bing Product Ads, Shopping’s share of all Google search
ad clicks fell two points between Q1 and Q2 2019.
·· Spending on desktop Google search ads grew 6% Y/Y in Q2 2019, up from 2% in Q1. Mobile spend
grew 34% in Q2 2019, down from 46% a quarter earlier, as spending growth for mobile Google
Shopping ads cooled to a three-quarter low.
·· Spending on Microsoft Advertising (formerly Bing Ads) search ads grew 8% Y/Y in Q2 2019,
compared to the combined results of Microsoft and the Yahoo Gemini platform from a year earlier.
·· Android and iOS devices produced 68% of Google search ad clicks, but just 35% of Microsoft search
ad clicks. Between mobile and desktop Safari, Apple browsers produced 49% of Google clicks.
·· Organic search produced 23% of all site visits and 21% of mobile site visits in Q2 2019. Phones
and tablets produced 59% of organic search visits, compared to 65% of paid search visits.
·· DuckDuckGo organic search visits were up 49% Y/Y across all devices as the search engine
saw its share of total US organic search rise from 0.4% in Q2 2018 to 0.6% in Q2 2019.
·· Site visits produced by Facebook were up 29% Y/Y, while Instagram visits rose 56%, and
YouTube visits improved 22%.
organic search & social
amazon ads
·· Amazon Sponsored Products spend grew 12% Y/Y, with sales up 102%. The format now accounts
for 86% of all non-display Amazon ads spend.
·· Top-of-search ad placements accounted for 45% of Sponsored Products spend and 88% of
Sponsored Brands spend.
·· Brand keywords accounted for 62% of sales revenue attributed to Sponsored Brands and 43%
for Sponsored Products, far eclipsing the 32% and 30% click shares these keywords generate for
each format, respectively.
display & paid social
·· Facebook spend increased 8% Y/Y, as impression growth surged to 25% Y/Y – the strongest
figure observed over the past two years.
·· Instagram spend grew 85% Y/Y, with a 208% increase in impressions. For advertisers active on
both Instagram and Facebook, Instagram accounted for 35% as much ad spend as Facebook
proper for the quarter.
·· Advertisers remain active on YouTube, and in Q2 2019 increased ad spend 43% with a 16%
increase in impressions and 24% increase in CPM.

MERKLE digital.MARKETING.REPORT Q2 2019 5PAID SEARCH ORGANIC SEARCH & SOCIAL DISPLAY & PAID SOCIAL AMAZON ADS
Spending on Google search ads grew 15% Y/Y in Q2 2019, down from 16% in Q1 2019. Click
growth was slightly weaker at 10% in Q2 2019, while CPC growth was steadier at 4.5%.
Google Shopping ad spending grew 38% in Q2 2019, down from 41% growth in Q1 2019.
With Yahoo dropping Google’s ads in favor of Bing Product Ads, Shopping’s share of all
Google search ad clicks fell two points between Q1 and Q2 2019.
Spending on desktop Google search ads grew 6% Y/Y in Q2 2019, up from 2% in Q1.
Mobile spend grew 34% in Q2 2019, down from 46% a quarter earlier, as spending
growth for mobile Google Shopping ads cooled to a three-quarter low.
Spending on Microsoft Advertising (formerly Bing Ads) search ads grew 8% Y/Y in Q2
2019, compared to the combined results of Microsoft and the Yahoo Gemini platform
from a year earlier.
Android and iOS devices produced 68% of Google search ad clicks, but just 35%
of Microsoft search ad clicks. Between mobile and desktop Safari, Apple browsers
produced 49% of Google clicks.
paid search

+10%
+20%
US Search Ad Spending Growth Remains at 14% Y/Y
Total advertiser investment in paid search
grew 14% Y/Y in the US market in Q2 2019,
a slight deceleration compared to the
previous quarter. Search ad clicks grew
9% in Q2, compared to 10% in Q1, while
average CPC growth remained roughly
even at just over 4% Y/Y. Q2 2019 marked
the sixth quarter in a row where search ad
spending growth has decelerated, following
relatively strong results in late 2017.
Google Shopping Spend Growth Decelerates, but Far Outpaces Text Ads
Spending on Google Shopping ads grew
38% in Q2 2019, down from 41% growth in
Q1 2019. Shopping click growth slowed from
33% in Q1 to 25% in Q2. Text ad spending
declines stabilized at 12% in Q2 2019, in part
due to a recovery in spending on advertiser
brand keywords. Shopping ads continue to
cannibalize text ad volume, but their growth
slowed a bit as Google generated a smaller
share of Shopping traffic from partners like
Yahoo in Q2.
Slower Shopping Click Growth Hurts Overall Google Search Spend
Spending growth for Google search ads
slipped a point between Q1 and Q2 2019,
coming in at 15% Y/Y. Click growth was
slightly weaker at 10% in Q2 2019, while
CPC growth was more steady at 4.5%.
Google Shopping ad click volume took a
hit to start the quarter as Yahoo stopped
running Google Shopping ads in favor
of Bing Product Ads. Mobile Google
Shopping growth was also a bit weaker
generally, following two particularly strong
quarters in a row.
+30%
Overall US Paid Search
Y/Y Growth
Google Overall US Paid Search
Y/Y Growth
+15%
+4%
+10%
ClicksAd Spend CPC
Google Shopping (PLAs)
Text Ads
Google Spending by Ad Format
Y/Y Growth
ClicksAd Spend CPC
+10%
+20%
+30%
Q4Q3Q2 Q2Q1
2018
Q1Q4
2019
+45%
+15%
–15%
+30%
+14%
+9%
+4%
Q4Q3Q2 Q2Q1
2018
Q1Q4
2019
Q4Q3Q2 Q2Q1
2018
Q1Q4
2019
+38%
–12%

Mobile Google Search Spend Returns to Early 2018 Growth Rates
Spending on desktop Google search ads
grew 6% Y/Y in Q2 2019, up from 2% in Q1.
Mobile spend grew 34% in Q2 2019, down
from 46% a quarter earlier, as spending
growth for mobile Google Shopping ads
cooled to a three-quarter low. Tablet
spending fell 6% in Q2 2019, following
three quarters of minimal growth.
Google Non-Brand Spend Growth Slows to 14% Y/Y on Weaker Click Growth
The non-brand keyword and Shopping
ad segment on Google has seen less
dramatic trending in CPC growth than the
brand segment over the past two years
and, generally, CPC growth has trended
lower as traffic has shifted to mobile. In Q2
2019, non-brand CPCs rose 4%, a slight
acceleration from Q1, while click growth
slowed from 13% in Q1 to 10% in Q2. As a
result, spending growth slipped to 14% Y/Y
in Q2, from 16% a quarter earlier.
Google Brand Keyword CPCs Rebound, Click Growth Improves
After hitting a six-quarter low of 6% in Q1
2019, CPC growth for advertiser brand
keywords rebounded in Q2 2019, hitting 11%
Y/Y. That is still well below levels advertisers
saw following a spike in brand CPCs in Q4
2017, but it helped drive spending growth
for brand keywords back up to 21%. Brand
keyword click growth also accelerated,
hitting a nearly two-year high of 9%.
+25%
–25%
+50%
Google Search Spending by Device Type
Y/Y Growth
+34%
+6%
+40%
+20%
+10%
+9%
Google Brand US Paid Search Text Ads
Y/Y Growth
+21%
+11%
ClicksAd Spend CPC
Google Non-Brand US Paid Search
Y/Y Growth
+25%
+15%
+5%
+20%
+10%
ClicksAd Spend CPC
Q4Q3Q2 Q2Q1
2018
Q1Q4
2019
Q4Q3Q2 Q2Q1
2018
Q1Q4
2019
Phone TabletDesktop
Q4Q3Q2 Q2Q1
2018
Q1Q4
2019 –6%
+30%
+14%
+10%
+4%

+5%
+10%
Desktop
Text Ads
Mobile
Text Ads
Mobile Google
Shopping
Desktop Google
Shopping
+15%
40%
60%
100%
20%
Non-Brand
Overall
80%
Google Shopping Share of Google Paid Search Clicks
Aggregate Results - US Retail
+30%
+10%
Google Shopping vs. Non-Brand Text Ads
Revenue Per Click
Phone Desktop
–10%
+20%
+14%
+5%
+7%
+1%
+14%
+4%
+3%
+11%
20172015 2016 2018
Q2 Q4Q3 Q2Q1 Q4Q3 Q2Q1 Q4Q3 Q2Q1 Q4Q3 Q4 Q1 Q2 Q3 Q2
2019
Q1
2014
Q3Q2Q1 Q2
2018
Q4Q2
2019
+12%
Q4 2018
Q3 2018
Q 1
+12%
+6%
–1%
+0.5%
Q1
Q3 Q1
–6%
Q4
Q2
2019
2019
+13%
+0% +0.1%
+6%
Google Shopping Click Share Falls After Yahoo Switch to Bing Product Ads
Google Shopping’s share of total Google
search ad clicks fell nearly two points
between Q1 and Q2 2019, the largest
quarter-to-quarter decline Merkle has
observed in the history of this report.
Shopping click share was still up four
points compared to a year earlier, but
Yahoo dropping Google’s ads in favor of
Bing Product Ads at the end of Q1 appears
to have had a meaningful impact.
Revenue-Per-Click Growth Trends Mixed Across Google Ad Formats
Average revenue-per-click growth trends
were mixed across ad formats and device
types in Q2 2019. Mobile non-brand text
ad revenue per click grew 13% Y/Y in Q2,
up from 7% growth a quarter earlier, but
desktop text ad revenue-per-click growth
was flat in Q2 after increasing 3% in Q1. For
Google Shopping ads, mobile revenue-
per-click growth slowed from 12% in Q1 to
zero growth in Q2, while desktop growth
improved to 6% in Q2 from being flat in Q1.
Shopping Ad Performance Weakens Slightly Compared to Text Ads
Desktop Google Shopping ads produced a
12% higher average revenue per click than
comparable non-brand text ads in Q2 2019,
while Shopping ads performed about 6%
worse on mobile than non-brand text ads
by the same measure. Shopping’s relative
performance was down across both device
types compared to Q1, but it remained
within the typical range advertisers have
seen over the past two years. Generally, the
performance of Shopping ads has held up
well, even as the format has expanded to a
broader range of queries.
Non-Brand Y/Y Revenue-Per-Click Growth
Google Shopping & Text Ads by Device
63%
88%

20%
Amazon Pushes the Gas on Its Google Shopping Ads Program
Amazon, which only began running Google
Shopping ads at the tail end of 2016,
appeared to push the gas on the format
in the weeks ahead of its two-day 2019
Prime Day. Within the home goods product
category, where Amazon’s presence in
Shopping auctions was the strongest out of
the gate, Amazon’s impression share jumped
about 20 points between early and mid-June
2019. Amazon also appears to be ramping
up its Shopping ad investment in other major
product categories, such as apparel.
Showcase Shopping Ads See Small Share Gains as New Inventory Rolls Out
With Google announcing new image-
focused Discovery and Gallery ads in May,
trends for Showcase Shopping ads may be
helpful in assessing their potential. Among
participating brands, Showcase Shopping
ads have grown to account for 8.5% of
all Google Shopping clicks in about two
years. Google also announced in May that
Showcase Shopping ads were rolling out
to new inventory, including Google Images
and the Discover feed, but Showcase share
gains from Q1 to Q2 were fairly small.
Local Inventory Ads Nearly a Quarter of Participants’ Google Shopping Clicks
Among brands participating in Google’s
Local Inventory Ads (LIAs) program, LIAs
produced 23% of all Google Shopping ad
clicks in Q2 2019. LIA click share jumped
10 points from Q1 2019, but the number of
participating brands remains relatively low
compared to the number running traditional
Google Shopping ads.
75%
Amazon Google Shopping Impression Share
Home Goods Category
69%
week of
50%
25%
OCT 1OCT 2 APR 1JUL 3APR 3 JUL 2APR 2
Local Inventory Ad Share of Google Shopping Clicks
US Retail - Participating Brands
10%
25%
15%
5%
Q4Q2 Q4Q3
2018
Q1
23%
Q2Q4 Q1 Q3
2017
4%
Showcase Shopping Ad Share of
Google Shopping Clicks
US Retail - Participating Brands
10%
2%
6%
8%
Q2
2019
Q3Q2Q1 Q2
2018
Q4Q4
2019
8.5%
JAN 2 JAN 1 DEC 31 JUN 24
Q1
Q1

Showcase Shopping Ads Bring More Visual Ads to Google Search
Showcase Shopping ads tend to show for
queries that are shorter and less specific
on average than those that trigger other
Google Shopping ads. The difference in
average query length isn’t huge at just
3.5 characters in Q2 2019, but Showcase
Shopping ads have helped show that
Google has an opportunity to serve more
visually compelling ads for a broader range
of search queries, an opportunity it is
bringing to a wider range of advertisers with
new formats like Gallery ads.
Partner Share of Google Shopping Clicks Drops Sharply
Google partners produced just under 4%
of Google Shopping ad clicks at the end
of Q2 2019, down two points from the
average partner click share in Q1 2019.
Yahoo dropped Google Shopping ads in
favor of Bing Product Ads at the end of Q1,
while Google also announced in March that
Google Images would become part of its
core Search Network, as opposed to being
treated as a search partner. Partners still
produce a larger share of Shopping clicks
than text ad clicks.
Click Share for Position Three and Four Text Ads Continues to Trend Down
Google’s expansion of top-of-page text
ad inventory on both mobile and desktop
was big news to industry observers over
2015 and 2016. But over the past two years,
click share from these lower position ads
has been on the decline. On both mobile
and desktop, the share of non-brand text
ad clicks produced by position three and
four ads is now lower that it was prior to the
addition of a fourth top-of-page unit.
10%
5%
Search Partner Share of Google Search Ad Clicks
20182016
10
20
Average Search Query Length in Characters
Showcase Shopping Ads vs. Other Google Shopping Ads
15
25%
15%
5%
10%
20%
Share of Non-Brand Google Text Ad Clicks
from Top-of-Page Position 3 & 4 Ads
Q2Q1Q4 Q4Q4 Q3
2017
Q3 Q2Q1 Q3
2016
Q2
2018
Desktop
Phone
Q1 Q2 Q3
Shopping Text Ads
OCTJAN JULAPR JANJAN JULAPR OCTOCT JULAPR
2017
5
Showcase Shopping Ads Other Google Shopping Ads
13.5
17.1
Q4
2019
2019
APR
1%
4%
Q1
12%
10%
JAN

RLSA Share of Google Clicks Continues to Fall, Similar Audiences Rising
Google search ad click share for RLSAs
hit a nearly two-year low in Q2 2019,
accounting for a little over 17% of all clicks.
Prior to Apple’s launch of ITP 2.0, RLSA
click share ran roughly 10 points higher.
Helping to fill that gap, click share for Similar
Audiences reached a new high of over 8%
at the end of Q2 2019, but clicks tied to
Google’s Seasonal Audiences product have
fallen off sharply from their post-holiday
shopping season highs.
Traditional Keyword Clicks Steady on Google Maps
At its May Marketing Live event, Google
announced changes to its Local campaigns
product including new inventory on Google
Maps. For the past three years, Google has
also populated ads on Maps by drawing
listings from advertisers’ core brand
keyword campaigns. These “Get Location
Details” clicks, as they are reported by
Google, generated about 8% of phone
text ad clicks in Q2 2019, which was nearly
unchanged from the prior quarter.
Gap in RLSA Click Share for Safari Widens Following New ITP Iterations
Apple’s launches of ITP iterations 2.1 and 2.2
in March and May, respectively, appear to
be further diminishing advertiser’s ability to
employ RLSA targeting on Apple devices, at
least on mobile. In Q1 2019, RLSA click share
ran about five points lower on mobile Apple
devices using Safari 12 compared to other
browsers. By the end of Q2, that gap had
expanded to about nine points. The desktop
Safari 12 RLSA gap is even wider, but did not
expand as much in Q2.
Safari 12 DesktopSafari 12 Mobile
–9%
–6%
2%
40%
10%
Share of Google Search Ad Clicks by Audience Type
18%
8%
OCTOCT JAN APR APRJUL
2017 2018
30%
JAN
30%
OCT
20%
JUL
Google Audience Click Share for Safari
vs. Other Browsers
–3%
OCT DEC FEB
2018
JUN
2019
4%
6%
10%
2%
Get Location Details Share of Google Text Ad Traffic
Brick-and-Mortar Advertisers
OCTJAN APR JUL
2016 2018
JAN OCTAPR JUL JAN JUL
2017
Phone Desktop Tablet
APR APR
2019
APR
8%
OCT
2019
–12%
JAN
Combined Similar AudiencesSeasonal Audiences
RLSAs Customer Match
APRNOV JAN MAR MAY
JAN
7%
5%
1%

Growth Trends for Key Google Search Metrics Mixed Across Major Industries
Across five major industries analyzed for
this report, there was a wide range of
trends for Google search spend growth
and the key metrics driving it in Q2 2019.
Financial services and B2B advertisers saw
the largest Y/Y increases in Google spend,
but both were driven by very large CPC
increases, as clicks fell by nearly 11% for
both. Retail and consumer goods brands
saw the largest click growth at 10% Y/Y,
while their CPC increases were a more
modest 5%.
Financial Services Sees Highest Share of Google Spend from Phones
While the financial services industry saw
the second-highest share of Google search
ad clicks produced by phones in Q2 2019
at 67%, it saw phones account for the
highest share of spend at 54%. For retail
and consumer goods advertisers, phones
accounted for just over 50% of Google
search ad investment, the first time phones
have accounted for a majority of spend.
Relatively Low Mobile CPCs Not Depressing Retailers’ Phone Click Share
Despite seeing a relatively large gap
between phone and desktop CPCs, retail
and consumer goods advertisers saw the
highest share of Google search ad clicks
produced by phones in Q2 2019, across five
major industries. Phones produced 69% of
retail and consumer goods clicks, compared
to just 39% for insurance where mobile CPCs
are far closer to parity with desktop.
Financial
ServicesB2B TravelInsurance
Retail &
Consumer
Goods
Clicks
Ad Spend
CPC
+33%
+18%
+15%
+4%
+2%
+10%
+5%
Google Overall Paid Search Growth by Industry
Q2 2019
+32%
+19%
1%
+2%
–11%
Insurance Financial
Services
B2B TravelRetail &
Consumer
Goods
Google Phone & Tablet Click Share by Industry
Q2 2019
35%
3%
4%
71%
75%
73%
39%
Phone
Tablet
38%
43%
5%
67%
7%
69%
7%
64%
Insurance Financial
Services
B2B TravelRetail &
Consumer
Goods
Google Phone & Tablet Spend Share by Industry
Q2 2019
5%
54%
56%
58%
38%
43%
4%
54%
6%
50%
8%
46%
19%
2%
21%
Phone
Tablet
–6%
–11%
–6%

Google Sees Improved Click and Spend Growth in UK Market
In the UK market, Google search ad
spending growth jumped from 7.5% Y/Y in
Q1 2019 to a little under 18% in Q2 2019.
In contrast to US trends, UK click growth
improved markedly from 6% Y/Y to 15%
over the same period, nearly matching a
recent two-year high in Q3 2018. UK CPC
growth ticked up to 3% Y/Y in Q2 2019,
from 1% growth a quarter earlier.
Desktop Accounts for Just 16% of UK Google Search Ad Clicks
Phones accounted for 72% of UK Google
search ad clicks in Q2 2019, up from 70% in
Q1 2019 and 63% in Q2 2018. Tablet share
of UK Google search ad clicks continued to
decline, falling to 12% in Q2 2019. Just 16%
of Google search ad clicks in the UK were
produced by desktop, a substantially lower
share than the 31% of Google search ad
clicks produced by desktop in the US.
UKSeesHigherShareofGoogleSearchAdClicksfromShoppingAdsthanUS
Among retailers, Google Shopping Ads
produced 72% of all UK Google search
ad clicks in Q2 2019, up two points from a
quarter earlier and over 10 points from Q2
2018. Over the past few years, the UK market
has typically seen a slightly higher share of
Google search ad clicks from Shopping ads,
but that gap widened to nine points in Q2
2019 as Shopping click share fell two points
in the US.
+10%
–10%
+20%
Google Overall UK Paid Search
Y/Y Growth
ClicksAd Spend CPC
75%
25%
50%
2019
Q3Q2Q1 Q2Q4
2018
Q4Q3
Google Shopping Share of Google Paid Search Clicks
Aggregate Results - UK Retail
30%
60%
90%
Q2
2018
Q2
2017
Q2
2016
Q2
2019
Phone Tablet Combined
UK Phone & Tablet Share of Google
Paid Search Clicks
2019
Q4Q3Q2 Q2Q1
2018
Q1Q4
+15%
+3%
+18%
Q1Q3Q2Q1 Q4
2017
72%
84%
72%
12%

Microsoft Search Ad Growth Looking Stronger After Yahoo Transition
Spending on Microsoft Advertising
(formerly Bing Ads) search ads grew
8% Y/Y in Q2 2019, compared to the
combined results of Microsoft and the
Yahoo Gemini platform from a year
earlier. At the end of Q1 2019, Microsoft
gained the search ad inventory Yahoo
was giving to Gemini, as well as shopping
ad inventory that Google was previously
serving on Yahoo. All told, click growth
improved from 1% in Q1 to 6% in Q2, while
CPC growth rose from a 3% decline to a
2% increase.
Bing Product Ad Share of Microsoft Advertising Paid Search Clicks
While Bing Product Ad share of all
Microsoft paid search clicks rose over
two points between Q1 and Q2 2019, that
may not seem like a huge jump given the
improvement in spending growth rates for
Product Ads. Importantly, the Product Ad
traffic Microsoft gained from Yahoo coming
back into the fold is relatively high quality
and leans toward desktop, so the benefits
to spend outweigh those to clicks. Desktop
Product Ad click growth improved from 18%
in Q1 2019 to 40% in Q2.
Bing Product Ads Post Second Strongest Spend Growth Since 2016
Bing Product Ads spending grew 54%
Y/Y in Q2 2019, the second strongest
quarterly growth rate for the format since
the beginning of 2016. Not coincidentally,
it was Q1 2016 when it first appeared that
Yahoo had shifted a significant amount
of its inventory from Bing Product Ads to
Google Shopping ads. Bing Product Ad
spend growth soon turned negative before
a jump in mobile traffic in late 2017 improved
Microsoft’s results.
+20%
–20%
+40%
Ad Spend
Clicks
CPC
+75%
+25%
–25%
–5%
+50%
Bing Product Ads
Text Ads
30%
Bing Product Ad Share of Bing Ads
Paid Search Clicks
Aggregate Results - US Retail
60%
Q2
2018
Q2
2017
Q2
2016
Q2
2019
Q2
2015
Non-Brand
Overall
Q2
2014
63%
34%
2019
Q4Q3Q2 Q2Q1
2018
Q1Q4
+54%
+6%
+8%
+2%
2019
Q4Q3Q2 Q2Q1
2018
Q1Q4
Microsoft Advertising & Yahoo Gemini Spend
by Ad Format
Y/Y Growth
Microsoft Advertising & Yahoo Gemini Overall
US Paid Search
Y/Y Growth

Q2
2018
Q2
2017
Q2
2016
Q2
2019
Q2
2015
Q2
2014
Q2
2013
Phone Search Ad Click Share Flat as Desktop Makes Gains for Microsoft
While phone share of Google search ad
clicks rose between Q1 and Q2 2019, a
jump in desktop click growth on Microsoft
kept overall phone click share flat between
quarters at 59%. Tablet share of search
clicks was down slightly to just over 6%,
putting total mobile device click share at
65%. Phone click share was up roughly six
points between Q2 2018 and Q2 2019.
Phone and Desktop CPC Gap Persists as Conversion Differences Remain
Across search ad platforms, phone CPCs
for non-brand ads were 53% lower than
desktop CPCs in Q2 2019, compared
to a 52% gap a quarter earlier. Despite
phones becoming the primary internet
device for more consumers over time, this
gap has persisted, in large part because
there remains a large gap in conversion
performance between device types. In
Q2 2019, average revenue per click from
phones was 65% lower than that from
desktop.
Microsoft Depresses Total Share of Search Spend Devoted to Mobile
Phone share of total search ad spending fell
by a little over a point between Q1 2019 and
Q2 2019, coming in at 37%. Tablet spend
share also declined between quarters,
coming in at just 5%. Despite these declines,
total mobile spend share was still two points
higher than a year earlier. As noted above,
certain industries see a higher share of
search costs from mobile devices, while
Microsoft also sees a significantly lower
share of costs from mobile than Google.
80%
40%
CPC Revenue Per Click
Phone vs. Desktop - Non-Brand Paid Search
Average Site Results
Q2Q1Q4 Q2Q1
2018
Q3
2017
Q4
Phone & Tablet Share of Paid Search Clicks
25%
50%
75%
Q2
2018
Q2
2017
Q2
2016
Q2
2019
Q2
2015
Q2
2014
Q2
2013
Phone & Tablet Share of Paid Search Ad Spend
25%
50%
Q4Q2 Q3 Q1
2019
47%
35%
6%
59%
65%
5%
37%
42%

100%
Desktop and Phone Click Share Near Opposites for Google and Microsoft
In Q2 2019, Google generated just under
63% of its search ad clicks on phones,
up about half a point from a quarter
earlier. Desktop accounted for just 31% of
Google clicks. It is roughly the opposite for
Microsoft, which saw phones produce just
27% of its clicks and desktop still holding
a click share of 66%. The two platforms
see more similar results from tablets, which
produced 6% of Google clicks in Q2 2019
and 7% of Microsoft clicks.
Google Share of Search Ad Clicks Takes Modest Hit from Q1 to Q2 2019
Google’s share of all US search ad clicks
was just over 90% in Q2 2019, a decline of
about one and a half points from a quarter
earlier when it was still serving a large
share of shopping ads on Yahoo. Google’s
share of search spend did not take as
large a hit, declining less than half a point
between Q1 and Q2 2019. On phones,
Google’s share of search spend ticked up
slightly to just under 98%.
Android and iOS Produce 68% of Google Search Ad Clicks, 35% of Microsoft’s
As the default search provider for
the primary browsers on each mobile
platform, Google sees Android and iOS
as its two largest sources of search ad
clicks in the US, with the desktop Chrome
browser a close third. For Microsoft, its
own Edge and Internet Explorer browsers
account for 39% of its search ad clicks,
almost double the share for iOS. Traffic
share produced by a browser is most
comparable for desktop Safari, which
accounts for a little under 5% of both
Google’s and Microsoft’s search ad clicks.
90%
Device Share of Paid Search Clicks by Platform
Q2 2019
Microsoft
Advertising
Google
Desktop Phone Tablet
31%
63%
6%
27%
7%
66%
Browser/OS Share of US Paid Search Clicks
by Platform
Android Chrome
Desktop
Edge/IE Firefox iOS Safari
Desktop
Google Share of US Paid Search
Q2 2019
Phone
Overall
80%
92%
98%
90%
96%
Spend Clicks
Microsoft Advertising
Google
24%
12%
23%
17%
2%
39%
2% 4%
44%
22%
5% 5%

Organic search produced 23% of all site visits and 21% of mobile site visits in Q2 2019.
Phones and tablets produced 59% of organic search visits, compared to 65% of paid
search visits.
DuckDuckGo organic search visits were up 49% Y/Y across all devices as the search engine
saw its share of total US organic search rise from 0.4% in Q2 2018 to 0.6% in Q2 2019.
Site visits produced by Facebook were up 29% Y/Y, while Instagram visits rose 56%, and
YouTube visits improved 22%.
organic search
& social

–20%
–10%
Organic Search Visits Fall 6% as Phone Growth Weakens
Total visits to brand sites produced by
organic search fell 6% Y/Y in Q2 2019,
down from a 2% decline in Q1 2019.
Organic search visit growth was weaker
across all device types, but brands saw
the biggest deceleration on phones,
where visit growth slipped from 13% in
Q1 2019 to 5% in Q2 2019. This was the
weakest rate of growth for phone organic
search since mid-2016, when Google’s
expansion of mobile ad inventory
severely depressed organic visit growth.
Google Gains Organic Search Share Overall, DuckDuckGo Cuts into Mobile
Despite a relatively weak quarter, Google
did manage to gain organic search visit
share across devices compared to a year
earlier. In Q2 2019, Google accounted
for 93% of organic search visits to brand
sites, compared to 92% in Q2 2018. On
mobile, however, Google’s share fell a
tenth of a point over the same period, as
DuckDuckGo’s share of mobile organic
search roughly doubled.
DuckDuckGo Only Major Engine to Deliver Organic Search Visit Growth
DuckDuckGo was the only major US
search engine to post positive growth
in organic search visits in Q2 2019,
delivering 49% more visits overall Y/Y and
64% more visits on phones and tablets.
Google organic search visits fell 8%, while
Yahoo and Bing saw declines of 11% and
26%, respectively. On phone and tablets,
Google, Yahoo, and Bing saw smaller
declines.
+20%
Phone Tablet Desktop Overall
–17%
+5%
Organic Search Visits by Device
Y/Y Growth
Q2 2019
Q2 2018 Q3 2017Q4 2017
Q4 2018 Q1 2018
Q1 2017
–15%
+10%
+75%
YahooGoogle Bing DuckDuckGo
+50%
+25%
–25%
Y/Y Growth in Organic Search Visits by Engine
Q2 2019
MobileOverall
+0%
–11%
–26%
+49%
–4%
–8%
+64%
US Organic Search Visit Share by Engine
Q2 2019
Q2 2018
93%
Google
95% 95%
3% 3%
Yahoo
2% 2%5% 4%
Bing
2% 2%
Overall Mobile
92%
0.4% 0.6% 0.3% 0.6%
DuckDuck
Go
Google Yahoo Bing DuckDuck
Go
–15%
–6%

Organic Search Cedes Site Visit Share to Paid Search, Direct
The average share of site visits produced
by organic search fell nearly two points
between Q1 2019 and Q2 2019, coming
in at 23%. Over the same period, the two
biggest share gainers were paid search
and direct site visits. Compared to a year
earlier, though, direct site visit share was
flat, while paid search was up. On mobile,
organic search visit share fell a little over
two points between Q1 and Q2, coming
in at 21.5%.
Google and DuckDuckGo Lead in Share of Organic Search from Mobile
Phones and tablets produced 63% of
organic search visits to brand sites from
Google in Q2 2019, just ahead of the 62%
of visits that mobile devices produced for
DuckDuckGo. In Q4 2017, mobile’s share
of DuckDuckGo was over 10 points lower
than its share of Google, but DuckDuckGo
saw big gains in mobile share over the first
half of 2018. Bing still trails the other major
search engines by a wide margin, with just
23% of its organic search visits coming
from mobile in Q2 2019.
Phone and Tablet Share of Organic Search Rises to 59%
Phones accounted for 51% of organic
search visits in Q2 2019, up a little over a
point from Q1 2019 and over five points
from Q2 2018. Tablet share of organic
share continued to tick lower in Q2 2019,
coming in at just under 8%. Between
phones and tablets, mobile devices
produced 59% of organic search visits
in Q2 2019, compared to 65% of paid
search clicks.
20%
30%
Organic Search Share of All US Site Visits
10%
Q4Q3Q2 Q2Q1
2018
Q1
2019
Q4
Overall Mobile
Share of Each Engine’s Traffic from Mobile
35%
70%
52%
23%
Mobile Share of US Organic Search Visits
CombinedPhonesTablets
60%
30%
23%
21%
Google Yahoo Bing DuckDuckGo
62%
Q4Q3Q2 Q2Q1
2018
Q1
2019
Q4
Q4Q3Q2 Q2Q1
2018
Q1
2019
Q4
59%
51%
8%
63%

6%
3%
Social Media Share of Site Visits Dips from Q1, but up from 2018
Social media sites produced just over 4%
of visits to brand sites in Q2 2019, a slight
decline from a quarter earlier, but nearly a
point higher than Q2 2018. Social media
site visits delivered solid Y/Y growth, but
the channel lost visit share between Q1
and Q2 to paid search and direct site
visits. On mobile, social media site visit
share was 5% in Q2 2019, also a small
decline compared to Q1.
Phones and Tablets Combine for Over 79% of Visits Produced by Social
After a slight decline between Q4 2018
and Q1 2019, mobile share of site visits
produced by social media reached a new
all-time high of 79% in Q2 2019. As the
largest social media traffic producer in the
US by far, Facebook drives social media
share trends, but generally sees a higher
than average contribution from mobile.
Facebook Visits Rebounding, but Instagram Growth Slowing
After running negative in Q3 2018,
Y/Y growth in site visits produced by
Facebook has rebounded over the past
three quarters, coming in at 29% in Q2
2019. Although it continues to outpace
other major social platforms, site visit
growth from Instagram has been slowing
over the same period with a drop from
114% growth in Q1 2019 to 56% growth in
Q2. YouTube delivered 22% visit growth in
Q2 2019, while Twitter and Pinterest saw
6% and 7% growth, respectively.
Mobile Share of Social Media Site Visits
80%
79%
75%
70%
60%
Social Media Share of Site Visits
Share of All Visits Share of Mobile Visits
3.4%
4.1%
+60%
+29%
+40%
InstagramFacebook Twitter Pinterest YouTube
+56%
+6% +7%
3.6%
3.4%
3.6%
4.3% 4.1%
5.0%
5.2%
4.4%
4.2%
4.6%
3.3%
4.1%
65%
+20%
+22%
Q4Q3Q2 Q2Q1
2018
Q1
2019
Q4
Social Media Site Visit Growth Y/Y
Q2 2019
Q4Q3Q2 Q2Q1
2018
Q1
2019
Q4

21PAID SEARCH ORGANIC SEARCH & SOCIAL DISPLAY & PAID SOCIAL AMAZON ADSMERKLE digital.MARKETING.REPORT Q2 2019
Facebook spend increased 8% Y/Y, as impression growth surged to 25% Y/Y – the
strongest figure observed over the past two years.
Instagram spend grew 85% Y/Y, with a 208% increase in impressions. For advertisers
active on both Instagram and Facebook, Instagram accounted for 35% as much ad
spend as Facebook proper for the quarter.
Advertisers remain active on YouTube, and in Q2 2019 increased ad spend 43% with a
16% increase in impressions and 24% increase in CPM.
display
& paid social

+100%
Facebook Ad Spend Excluding Instagram Up 8% Y/Y as Impressions Climb
Excluding its Instagram property,
Facebook ad spend increased 8% Y/Y for
advertisers active on the platform since
at least Q2 last year. Impressions grew
25% Y/Y, the strongest figure observed
in the past two years, while CPM fell 13%
Y/Y. The spend increase represents a
rebound from a 2% decline in Q1 2019,
though Instagram continues to grow far
faster than Facebook itself.
Instagram Advertisers Investing 35% as Much on the Platform as Facebook
Essentially all Instagram advertisers are
also actively spending on Facebook, and
in Q2 2019 those brands active on both
spent 35% as much on Instagram as they
did on Facebook. CPM for Instagram
ads continues to trend below that of
Facebook, with Instagram accounting for
52% as many impressions as Facebook.
Not all Facebook advertisers are active
yet on Instagram, though more and more
brands are wading into Instagram every
quarter.
Instagram Ad Spend Continues to Far Outpace that of Facebook Proper
Facebook’s Instagram property continues
to drive most of the ad spend growth for
Facebook, with spend up 85% Y/Y for
advertisers active on the platform for the
past year. Impressions increased 208%
Y/Y, and the June 2019 announcement that
the platform would be adding inventory to
the Explore tab over the coming months
should help to further bolster inventory.
+30%
–15%
30%
60%
20%
ImpressionsSpend
CPM
+25%
+8%
–13%
+50%
+200%
ImpressionsSpend
CPM
+85%
Spend
35%
Impressions
52%
Clicks
19%
+15%
–40%
Facebook Ads Y/Y Growth
Q2 2019
–50%
+150%
Instagram Ads Y/Y Growth
Q2 2019
+208%
Instagram Performance Relative to Facebook
Q2 2019 - Median Advertiser

–20%
Mobile Up to 91% of Facebook Advertising Spend, 96% of Clicks
Back in Q1 2017, the first full quarter
following Facebook’s sunset of its FBX
desktop retargeting solution, phones
and tablets combined to account for
76% of ad spend and 79% of paid clicks
on Facebook. Those shares have risen
steadily and now stand at 91% of spend
and 96% of clicks, as the Facebook app
accounts for the vast majority of usage.
YouTube Spend Up 43% with Increases in Impressions and Pricing
Advertisers active on YouTube Y/Y
increased spend on the platform by
43% in Q2 2019, with a 16% increase in
impressions and 24% increase in CPM.
Bad press surrounding the video platform
has plagued it for a couple of years now,
but the publicity has mostly led advertisers
to more carefully target ads and take
more precautions to exclude potentially
damaging placements, as opposed to
outright abandoning the platform.
Facebook CTR Falls Y/Y for Newsfeed and Right-Hand Rail Ad Units
2018 saw four straight quarters during
which CTR for Facebook ads in the
Newsfeed and along the right-hand rail
rose Y/Y. This followed a January 2018
update, which decluttered the Newsfeed
by limiting the number of unsponsored
posts from brands and publications that
users were shown. However, now that
that update has been lapped in year-ago
comparisons, CTR is falling, down at least
20% for both page locations in Q2 2019.
Facebook Ads Mobile Share
120%
60%
Q1Q4Q3 Q2Q2
2018
Q2
2017
Q1
ClicksAd Spend
90%
30%
91%
Q3
96%
–10%
–30%
Newsfeed Right-Hand Rail
Facebook Ads CTR Y/Y Growth
–22%
20%
50%
YouTube Y/Y Growth
40%
Q4
2019
–26%
Spend CPMImpressions
10%
30%
43%
16%
24%
Q1

amazon ads
Amazon Sponsored Products spend grew 12% Y/Y, with sales up 102%. The format now
accounts for 86% of all non-display Amazon ads spend.
Top-of-search ad placements accounted for 45% of Sponsored Products spend and 88%
of Sponsored Brands spend.
Brand keywords accounted for 62% of sales revenue attributed to Sponsored Brands
and 43% for Sponsored Products, far eclipsing the 32% and 30% click shares these
keywords generate for each format, respectively.

43%
78%
88% 89%
3%
35%
45%
15%
25%
21%
Clicks
100%
20%
80%
60%
40%
Top of Search Accounts for Nearly 90% of Sponsored Brands Spend
Sponsored Brands (formerly known as
Headline Search Ads) were once limited
almost exclusively to the top of the search
results, but were expanded to additional
placements on the left rail and along the
bottom of search results in August 2018.
These other placements now account for
57% of Sponsored Brands impressions,
but just 12% of spend, as top of search
traffic is the most competitive to obtain
and accounts for the vast majority of sales
from the format.
+120%
Sponsored Products Share by Placement
Q2 2019
Amazon Ads Y/Y Growth by Ad Format
Q2 2019
+30%
+60%
Sponsored Products Sponsored Brands
+90%
Spend SalesClicks
+12% –2%
+58%
+28%
+102%
+53%
Impressions Spend
82%
40%
Product Details Page Top of Search Other
34%
Sales from Sponsored Products Ads More than Double Y/Y
Advertisers investing in Sponsored Products
since at least Q2 2018 saw sales attributed
to the format increase 102% Y/Y, while
those active on Sponsored Brands Y/Y
saw sales from that format increase 53%.
Spending growth has slowed for many
mature advertisers, but the increase in sales
highlights the significant opportunity Amazon
search ads still hold, even for advertisers
that have been active for some time. As
the platform has grown and matured,
advertisers have been able to develop more
sophisticated strategies to improve ROI.
Product Details Pages Account for Over 3/4 of Sponsored Products Impressions
Product details pages accounted for 82%
of Sponsored Products impressions, but
just 40% of clicks in Q2 2019, as these
placements have a significantly lower CTR
than other Sponsored Products inventory.
Top-of-search placements accounted for
just 3% of impressions, but 35% of clicks
and 45% of spend. Appearing at the top
of search results is the most competitive
placement to attain for Sponsored
Products, but clearly provides strong
value, accounting for over half of all sales
attributed to the format.
Clicks
100%
20%
80%
60%
40%
Sponsored Brands Share by Placement
Q2 2019
Impressions Sales
Top of Search Other
Spend
57%
22%
12% 11%

Amazon Sponsored Brands Impressions
Relative to January 2018
600%
400%
JAN
2018
OCT
2019
JULAPR
200%
JAN APR
Sponsored Products Spend Share Remains Roughly Unchanged
Sponsored Products accounted for
86% of non-display Amazon spend in
Q2 2019, a figure that has remained
essentially unchanged over the past two
years. Product Display Ads, which are still
restricted to Amazon vendors and are not
available to sellers, continue to account for
a small share of spend, though Sponsored
Products ads are getting a significant
portion of traffic from the product details
pages where Product Display Ads get
many of their impressions.
Brand Keywords Account for Nearly 1/3 of Clicks for Both Ad Formats
Advertiser brand keywords produced 32%
of Sponsored Brands clicks and 30% of
Sponsored Products clicks in Q2 2019, with
roughly similar spend shares attributed to
these terms as well. Particularly in the case
of Sponsored Brands, branded keywords
account for a much larger share of sales
revenue, with clicks nearly twice as valuable
as non-brand keywords. Non-brand
keywords are difficult to conquest through
Sponsored Brands, with the format’s top of
search presence limited to one unit.
Amazon Sponsored Brands Impressions Remain Elevated
Sponsored Brands impressions
skyrocketed with the addition of new
placements in August 2018 and have
remained elevated ever since, with a
recent surge pushing impressions well
past Q4 2018 and Q1 2019 levels. Still,
even with all the additional inventory,
Sponsored Products ads continue to
account for the vast majority of ad spend,
as the new inventory has a relatively low
CTR compared to the Sponsored Brands
unit long-featured at the very top of
search results.
Amazon Spend Share by Ad Format
Q2 2019
Product Display Ads
Sponsored Products Ads
Sponsored Brands
86%
13%
50%
75%
25%
Clicks Sales
Brand Keyword Share by Amazon Ad Format
Q2 2019
Sponsored Brands
Sponsored Products
36%
27%
32% 30%
Spend
62%
43%
+543%

Sponsored Brands Continue to Lag Sponsored Products in Revenue Per Click
Sponsored Products ads continue to
produce the highest revenue per click
for advertisers, while Sponsored Brands
revenue per click was 12% lower in Q2
2019 and Product Display Ads revenue
per click was 23% lower. One positive
Q2 development for Sponsored Brands
was the May introduction of negative
keywords, which should help advertisers
weed out clicks from less relevant search
queries, though advertisers still have no
direct visibility into the search queries
driving Sponsored Brands traffic.
Sponsored Products Sponsored Brands Product Display Ads
Sponsored Brands CTR Still Tops Sponsored Products
Though Sponsored Brands ad units have
been rolled out to additional placements
aside from top of search, resulting in a
significant decline in CTR, the ad unit still
produces a meaningfully higher CTR when
compared to Sponsored Products, given its
continued placements at the top of search
results. Product Display Ads continue to lag
both of the other formats in terms of CTR.
Amazon Relative CTR by Ad Format
Google Shopping Amazon Sponsored
Products
Amazon Sponsored
Brands
Google Shopping Conversion Rate Continues to Lag Amazon Ad Formats
Amazon ad formats continue to far outstrip
Google Shopping in terms of conversion
rate, as the marketplace nature of Amazon
and incentives for Prime subscribers to
convert on Amazon produce a quick path
to conversion for many ad clicks. However,
it continues to be the case that not all
Google advertisers are active through
Amazon ads and vice versa, muddying
comparisons between the two.
Sponsored Products Product Display AdsSponsored Brands
Relative Sales Per Click by Amazon Ad Format
Google Shopping vs. Amazon Relative
Conversion Rate
Q2 2019
–12%
–23%
–28%
+34%
+240%
+165%

report methodology
Figures are derived from samples of Merkle clients who have worked with Merkle for each marketing
channel. Where applicable, these samples are restricted to those clients who 1) have maintained
active programs with Merkle for at least 19 months, 2) have not significantly changed their strategic
objectives or product offerings, and 3) meet a minimum ad-spend threshold. All trended figures
presented in this report represent same-site changes over the given time period. Unless otherwise
specified, the data points in this report are derived from the North American market region.
Merkle is a leading data-driven, technology-
enabled, global performance marketing
agency that specializes in the delivery of unique,
personalized customer experiences across platforms
and devices. For more than 30 years, Fortune 1000
companies and leading nonprofit organizations have
partnered with Merkle to maximize the value of their customer portfolios. The agency’s heritage
in data, technology, and analytics forms the foundation for its unmatched skills in understanding
consumer insights that drive people-based marketing strategies. Its combined strengths in
performance media, customer experience, customer relationship management, loyalty, and
enterprise marketing technology drive improved marketing results and competitive advantage. With
more than 7,000 employees, Merkle is headquartered in Columbia, Maryland, with 21 additional
offices in the US and 33 offices in Europe and APAC. In 2016, the agency joined the Dentsu Aegis
Network. For more information, contact Merkle at 1-877-9-Merkle or visit www.merkleinc.com.
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