What do the numbers say about the effect of COVID-19 on digital marketing?

Marketing Tips

It is no surprise that COVID-19 has affected the economy, however, from a quantitative point of view just how significant has that effect been?

We've taken a close look at The Kenshoo Q1 2020 Quarterly Trends Report to have a more comprehensive understanding of the situation from a digital marketing standpoint.

Regarding Paid Search, if we make a comparison with the last quarter of 2019, there has been a 19% drop, however, a decrease is normal after the festive season. If we look at Paid Search year-over-year, comparing the first quarter of 2019 with the first quarter of 2020, there has been a 1% growth in Paid Search spend.

According to Kenshoo 's study "Click-Through Rates (CTR) were 2.4% (the same as a year ago) while the average cost-per-click (CPC) was down slightly from $0.60 in the first quarter of 2019 versus $0.58 in the first quarter of 2020."

Source: Kenshoo Quarterly Trends Report
Source: Kenshoo Quarterly Trends Report

The fact that these metrics have remained relatively flat, through the COVID-19 crisis indicates that marketers managed to sustain efficiency and also, that the effects were perhaps more about volume than performance.

Concerning Social Advertising, we can again see a drop between the fourth quarter of 2019 and the first quarter of 2020, but this is expected after the festive season. However, even after the effect of many countries going into lockdown during the second half of March, according to Kenshoo "year-over-year spending on Social Advertising grew 25% with clicks up 40% and impressions up 35%". Click through rates remained the same as last year and cost per thousand impressions fell by 7%.

Source: Kenshoo Quarterly Trends Report
Source: Kenshoo Quarterly Trends Report

Although we mustn't forget that the COVID-19 crisis, affected industries in different ways and some may take longer to recover, this data illustrates that marketers seem to be finding ways to spend their budgets wisely.

From these metrics, we may be now faced with the following question; if the numbers haven't dropped drastically, why is the economy in trouble? To answer this question, we ought to understand how different would have these values been if COVID-19 hadn't happened.

Based on growth figures from 2019, the report developed by Kenshoo estimates what the affected period would have been without COVID-19. These are the main conclusions; for all channels, spending would've been more aligned with the stronger growth numbers observed in 2019. Paid Search as well as Social Advertising growth would have reached higher values than actual results, while E-commerce Advertising growth has increased more than we had expected due to the effects of the pandemic reaffirming the idea that marketers have been able to react to the circumstances and adapt their campaigns to make the most of increased online activity.

The key takeaway is that good marketing, especially in the online world, depends on marketers having the ability to understand user behaviour and anticipate how the markets will react to then utilise that knowledge to design adequate strategies.

At Kenshō we love a challenge and nothing makes us feel more fulfilled than driving results, even when the circumstances aren't ideal. Are you in need of a personalised strategy to reach your goals? Get in touch with us, we'll be delighted to show you how we can add value to your business. Say hi@kensho.marketing