State of Digital Marketing Report
Marketing and advertising insights for digital marketers.
We analyze data from thousands of online businesses to help marketers understand overall marketing trends and offer ideas to further improve marketing ROI.
2023 Q1 Report Highlights
Under the shadow of high inflation and economic uncertainty, the 2022 holiday shopping season was different from prior years in many ways. While our data certainly reflects the hesitation of marketers, we also notice a strong uptake of conversion volume in Q4. Here are the highlights of our analysis:
Year-over-Year % Change Q4 2022 vs Q4 2021
Advertising Costs (CPM) Trend
Cost of advertising, as measured by CPM, was down 17% on average in the fourth quarter of 2022 compared to the year before. Contrary to the upward trend in 2021, the CPM stayed relatively flat throughout 2022. As a result, the cost of advertising was lower during the 2022 holiday shopping season compared to the prior year. This reflects the uncertainty of the economy and the cautious sentiment from advertisers during the last holiday shopping season.
Website Visitors Trend
The Website Visitor metric saw virtually no change in the fourth quarter of 2022 compared to the year before. This was an improvement from the first half of the year where visitor volume was down 15% from 2021. This metric indicates relatively stable consumer shopping activities during the 2022 holiday season.
Conversion Events Trend
The Website Conversion metric was down 15% in the fourth quarter of 2022 compared to the year before. While the conversion volume was still lower than 2021, the gap was narrower in Q4 compared to the first three quarters of 2022. We also notice that while visitor volume started to increase in Q3 of 2022, conversion events didn’t start to pick up until October. This delay indicates consumers still made purchases mostly in the fourth quarter, despite the holiday shopping season starting earlier in the year.
Looking Forward to 2023
Continuing the downward trend at the end of 2022, the average CPM in January 2023 remains low. This is the first time we have seen a negative CPM growth in the beginning of the year since the pandemic. On the other hand, the US consumer sentiment index has reached the highest level in nine months.
Low advertising costs coupled with an improving consumer sentiment in January presents good advertising opportunities for brands. Here are some ideas to help marketers further improve their campaign performance.
Advertising Channel Diversification
Different channels have different characteristics and cost structures. If you’re struggling to maintain your ROI while growing your reach, it’s a sign your current channel mix has reached its optimal point. Consider expanding into new advertising channels or new campaign types in your current channels.
Paid + Owned Media Synergies
Adapt an integrated marketing strategy to your paid and owned channels. Especially on social media, it’s more effective to take a holistic approach to your paid and organic campaigns. Your advertising and email campaigns can also work together to generate as much as 2x conversions. Creating synergy across your paid and owned channels helps further boost your ROI.
What is the AdRoll State of Digital Marketing Report?
The AdRoll State of Digital Marketing Report aims to offer marketers insights into business and marketing trends based on AdRoll’s performance statistics of nearly 3,000 online businesses across finance, beauty and fashion, fitness, technology, travel and other industries.
What are the key performance indicators (KPI) reported in the AdRoll State of Digital Marketing Report?
The AdRoll State of Digital Marketing Report shows three Business KPIs:
- Advertising CPM - the median advertising CPM (cost-per-mile) during the reporting period compared to the same period in the prior year
- Visitor - the median number of visitors to a website during the reporting period compared to the same period in the prior year
- Conversion - the median number of conversions during the reporting period compared to the same period in the prior year
What is considered to be a conversion?
On the AdRoll platform, the definition of conversion is set by customers. It can vary based on the business nature of the customer and the type of campaigns. For ecommerce sites, it usually refers to an online purchase. For other types of ebusinesses, it can be a subscription sign-up or a lead capture event.
How often will the information in the AdRoll State of Digital Marketing Report be updated?
The information in the AdRoll State of Digital Marketing Report will be updated on a quarterly basis.
Social Channel Spotlight
In 2022, AdRoll launched a new feature called Connected Social Ads, which enables marketers to create and manage advertising campaigns on four social networks: Facebook, Instagram, TikTok, and Pinterest — all from one platform.
Among the customers who use Connected Social Ads, 59% use it to manage campaigns on Facebook and Instagram, 25% on TikTok, and 16% on Pinterest. Given the current advertising market share of these social networks, our data signals increasing interest from advertisers on the newer social advertising platforms, such as TikTok and Pinterest, compared to the traditional platforms. In fact, market research firm eMarketer projects a 36% increase in the US advertising revenue for TikTok in 2023, compared to just 5.5% for Meta (Facebook and Instagram).