The omnichannel platform for performance marketing Skai has published its Q2 2023 Digital Marketing Quarterly Trends Report, finding a rise in digital ad spending in retail.

A pattern of more ads at lower prices mostly continued to affect year-over-year (YoY) trends. However, a comparison of Q2 2023 to the previous quarter suggests an improving economy.

The analysis was drawn from approximately $9bn in advertising spending over five quarters. This comprised more than 3,000 advertiser and agency accounts across more than 150 countries running on the Skai platform.

YoY ad spending grew 35% for retail media, up from 30% last quarter. Paid search and paid social only varied slightly from last quarter’s trend.

Paid search spending increased 3% YoY while paid social spending declined by 4%, both down one percentage point from Q1 YoY levels. Skai states that this is a result of the fundamental trend of “more impressions at lower prices,” which continued into Q2.

Retail media and paid search cost-per-click (CPC) both grew 11% quarter-over-quarter (QoQ) while conversion rate (CVR) was up 8% in retail media and 10% in search.

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Higher conversion rates translate to fewer clicks leading to a purchase, which then offset the higher click costs without negatively affecting return on ad spending (ROAS). Higher CPC also allows for higher-quality placements on search results or product description pages.

While overall social spending was down, several segments saw YoY growth over Q2 2022. Video ads grew 12% and both Instagram ads and Awareness & Engagement campaign objectives were up 5% over last year.

In each channel, retail ads that are taking new forms and reaching new audiences showed robust QoQ growth. Amazon DSP spending reportedly increased 56% from Q1 to Q2. Meanwhile, Google Performance Max campaigns and Meta Advantage Shopping Campaigns+ grew 34% and 38%, respectively.

Skai senior director of marketing research Chris Costello commented: “Digital publishers are consolidating disparate elements of campaign management and then expanding those campaigns to new audiences and properties to reinforce their value to advertisers.”

Another recent study forecasted that advertising revenue from retail media will exceed television revenue by 2028.