Join us, as we discuss the top news and trends from the PPC industry. With latest advertising benchmarks explained as well as new platforms launching left right and centre!
Cost of search ads increase while conversion rates decrease
The 2024 search advertising benchmark report by LocalIQ reveals a continued trend of rising costs and declining conversion rates across most industries.
Advertisers are facing higher expenses for leads and clicks, while Google reports record profits.
Conversion rates dropped to 6.96%, with significant decreases in finance and dental services but increases in apparel and employment sectors.
The cost per lead (CPL) surged by 25%, averaging $66.69, while the click-through rate (CTR) rose to 6.42%. CPCs also increased to $4.66, with notable rises in real estate and personal services.
Key Data Points:
- Conversion Rate: 6.96% (down from 7.04% in 2023)
- Cost Per Lead: $66.69 (up from $53.52 in 2023)
- Click-Through Rate: 6.42% (up from 6.11% in 2023)
- Cost Per Click: $4.66 (up from $4.22 in 2023)
This ongoing trend highlights increased competition and Google's intensified monetisation strategies, impacting advertisers’ return on investment.
Instagram tests unskippable video ads in main feed
Instagram is testing a new ad format that forces users to watch unskippable video ads before continuing to scroll through their main feed.
This move aims to increase ad exposure for brands but risks irritating users who may find the forced viewing intrusive.
Similarly to YouTube’s unskippable ads, these in-feed video ads display with a timer. Users cannot scroll past the ads until the timer ends.
While this presents potential for higher ad engagement, it also presents a larger risk that users may use ad blockers, or even opt to use different social platforms altogether.
Early feedback to this test has been largely negative due to concerns over user experience. Meta is monitoring the effectiveness of the new ad type.
Brave launches search ads in key markets
Brave Search has introduced Search Ads, allowing brands in the U.S., Canada, the UK, France, and Germany to run cost per click ad campaigns. The launch follows 18 months of testing with major brands such as Amazon and Dell.
Brave ads run on a cost per click ad model similarly to Google Ads. Some brands can benefit from 14 days of free ads as an incentive to test the platform, however brands must meet a minimum threshold of eligible ad impressions in their target region to use the platform.
With 65 million active monthly users and over 10 billion annual searches, 89% of early adopters in the testing period have continued advertising on the platform since the start of 2024.
This ad platform offers brands a way to grow their paid media strategies and access a new audience outside traditional search engines.
PayPal launches ad network using user purchase data
PayPal is launching an advertising business that leverages its extensive user purchase data to offer personalised promotions and ads. This new ad network will target PayPal’s approximately 400 million users with ads based on their transaction histories.
The ad network benefits from multi-channel reach as ads will be served beyond PayPal’s platform, including across the web and connected TV ads.
Users who don’t wish to be targeted based on their purchase data can choose not to have their data included in ad targeting.
This strategic move positions PayPal alongside other financial giants entering the retail media ad space, utilising customer data to advance advertising capabilities.
Google Marketing Live 2024: AI-powered innovations
Google Marketing Live 2024 showcased a multitude of AI-driven updates aimed at boosting creativity, data insights, and user engagement across various platforms.
Key Highlights:
- Google PMax upgrade: Enables rapid and scalable production of high-quality creative assets for Performance Max campaigns using Generative AI, customised ads, and advanced image editing.
- Immersive shopping ads: Introduces video and virtual ad formats for shopping ads, allowing retailers to integrate product videos, virtual try-on, and 3D product spins for heightened consumer engagement.
- Visual storytelling: Target potential customers with vertical videos, stickers, and animated image ads across YouTube, Discover, and Gmail through Demand Gen campaigns.
- Ads in AI overviews: Relevant Search and Shopping ads will appear within AI-generated overview boxes on the SERP, enhancing visibility without additional campaign setup.
- First-party data unification: Google’s Data Manager Tool is now available to centralise and activate first-party data for more effective AI-powered campaigns, offering data integration and audience insights.
- Brand profiles and AI branding tools: New tools allow merchants to create brand profiles on Search, featuring brand imagery, videos, customer reviews, and more.
- AI-powered ads for complex purchases: Google is testing interactive experiences in search results, providing tailored advice and recommendations based on user needs and context to improve user experience.
These updates aim to streamline the consumer journey, reduce friction, and drive higher engagement with brands.
The focus on user experience and driving traffic through innovative AI-powered solutions signals a significant shift in digital marketing strategies.
TikTok explores 60-minute video uploads
TikTok is currently testing a feature allowing users to upload videos up to 60 minutes long, potentially transforming the platform's content landscape.
This could pave the way for hosting long-form branded content and, consequently, more advertising opportunities.
Key Points:
- Content expansion: The 60-minute video upload limit expands content possibilities, enabling creators to experiment with long-form content genres like tutorials, demos, and sketches.
- Limited testing: Currently, the feature is being tested with a limited number of users in select markets, with no immediate plans for a wider rollout.
- Advertising potential: Longer video formats may lead to TikTok introducing pre- and mid-roll ads, creating new avenues for advertising and revenue generation.
- Evolution of video length: TikTok's journey from 15-second videos at launch to now testing hour-long uploads reflects its evolution in catering to diverse content preferences.
Implications:
- For brands and marketers: The ability to upload longer videos opens up opportunities for brands to engage audiences with more storytelling and immersive content experiences.
- For TikTok: This feature test aligns with TikTok's goal of fostering creativity and offering diverse content options, potentially attracting a broader user base and increasing engagement.
As TikTok continues to innovate and expand its capabilities, brands should stay attuned to these developments to leverage the platform effectively for their marketing strategies.
Netflix's ad-supported tier surges to 40 million subscribers
Netflix's ad-supported tier has experienced rapid growth, reaching 40 million monthly users globally. This move, initially considered risky, has proven successful for Netflix in diversifying revenue streams amidst fierce streaming competition.
Expanding Opportunity: Netflix's platform offers advertisers access to a large and expanding pool of potential customers, making it an attractive advertising opportunity for brands.
Subscribers Growth: Within six months, ad-supported subscribers have surged from 5 million to 40 million, with over 40% of new Netflix sign-ups opting for the cheaper ad-supported plan where available.
In-House Advertising Platform: Netflix is bolstering its ad business by developing its own advertising platform to match the excellence of its streaming technology. Partnerships with Google, Microsoft, The Trade Desk, and Magnite are part of this strategy.
Netflix co-CEO Ted Sarandos: "Our ad membership has been an overwhelming success. We’re just getting started on that journey."
Netflix's president of advertising Amy Reinhard: "We're launching our own advertising platform to power the ads plan with the same level of excellence as our streaming tech."
As Netflix continues to expand its advertising initiatives, advertisers should monitor developments for potential opportunities to engage with its vast audience base.
