The first quarter of 2023 brought a cautious start for both companies and consumers, with financial conservatism and purposeful spending behaviors prevailing over the top advertising trends observed.
To drive growth in a challenging retail media landscape, brands and agencies are looking for trending industry insights that can help guide their near-term strategies. We recently published our quarterly CPC report and hosted a webinar detailing Pacvue's comprehensive research in Q1 advertising performance for Amazon, Walmart, and Instacart Ads.
Watch the full webinar here:
The decrease in cost-per-click (CPC) for Amazon Sponsored Products and Brands ads between Q4 2022 and Q1 2023 was expected due to the post-holiday shopping season.
Despite a pullback in ad spending during Q1 2023 caused by rising inflation, some brands increased their budgets in March, demonstrating confidence in the economy and a willingness to invest in advertising. This shift could lead to more strategic and targeted campaigns, and as the economy stabilizes, more opportunities for brands to connect with audiences.
Amazon's Sponsored Products and Sponsored Brands have experienced diverging CTR trends, with Sponsored Products increasing and Sponsored Brands decreasing. In addition to more conservative budgets due to macroeconomic considerations in the market, brands have been opting for more intentional and focused ad strategies, such as investing in Sponsored Products ads over Sponsored Brands, hence the divergence in CTR.
Walmart Connect Sponsored Ads have shown remarkable growth in CTR and ROAS, indicating a strong upward trend for the platform. Back in June 2022, Walmart Connect changed to a second-price auction and made changes to search relevancy, ultimately leading to reduced costs and increased brand awareness for advertisers on the platform, which led to Walmart Sponsored Ads CTR increasing significantly YoY.
Meanwhile, benchmark data for Instacart Sponsored Ads shows promising signs with ROAS increasing QoQ and YoY. Instacart Sponsored Ads have seen an increase in ROAS after three consecutive quarters of decline, suggesting an opportunity to improve ad efficiency on the platform.
Overall, things for brands advertising on Instacart continue to perform well, and we’re seeing it across most core metrics – costs down, ROAS up – new capabilities that are public will be rolling out soon with display and video APIs further adding to tailwinds for the platform.
As always, retail media platforms are constantly evolving. Here’s a quick recap of some of the shifts that impacted results in Q1 of 2023:
For full insights into Q1 trends, download the full report and start benchmarking your performance on Amazon, Walmart, and Instacart.
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