After an unusual holiday season, consumers kicked off 2021 with continued interest in e-commerce. The COVID-19 vaccine distribution accelerated, and two separate stimulus checks gave Americans a short-term influx in their disposable income. The prospect of traveling again became more promising as well. Overall, these factors contributed to positive growth in digital ads over the first quarter of the year.

Let’s dive into some key stats from Merkle’s Q1 2021 Digital Marketing Report:

Google paid search Y/Y growth accelerated in Q1

Spend increased 20% Y/Y, marking the highest spend growth experienced since the start of the pandemic, driven by 21% Y/Y click growth at stable cost-per-clicks (CPCs) (-1% Y/Y). Both text and shopping ads experienced spend growth Y/Y, though only text ads saw increases in CPCs.

Growth on Amazon’s Sponsored Brand ads

With clicks up 38% and spend up 26%, growth on Amazon Sponsored Brand ads remained strong Y/Y. Sales growth did not keep up with click growth, though, and Sponsored Brands’ relative sales-per-click compared to Sponsored Products fell to 75%. Sales growth continued to be strong, however, at 36%, and Sponsored Products still captured the majority of spend share across Sponsored Products, Sponsored Brands, and Sponsored Display ads.

Organic search visits on Google were up 18% Y/Y

Growth decelerated compared to the previous three quarters—primarily driven by desktop searches. Most of this deceleration occurred on desktop, where impressions grew less and click-through rate declined more Y/Y when compared to mobile.

Retail continued to show Y/Y strength; similar to paid search, the greatest Y/Y growth for the quarter occurred in January. Travel and high tech/B2B, two industries impacted negatively by the pandemic, both showed strong Y/Y growth in visits in March. Mobile visit share decreased slightly Y/Y, with modest growth in phone share offset by larger declines in tablet share.

Investment across Facebook and Instagram continues to grow 

Impression growth on Facebook is minimal compared to the sharp increase in investment, up 19% and 21% in Q1 the past two years – signaling an uptick in competition and rising CPM. Instagram continues to be an opportunity for growth across brands at a more efficient CPM, as ad spend increased 58% Y/Y and 30% Q/Q and CPM reduced by 5%. Outside of Facebook-owned properties, Pinterest continues to receive solid investment from advertisers at an 8% share, slightly lower Q/Q.

Want to learn more? Download Merkle’s Q1 2021 Digital Marketing Report here.