Ad spending grew across major digital platforms owned by Google, Meta and Amazon last quarter, even as CPMs remained soft (although also recovering in some cases), according to data from independent agency Tinuiti.
In streaming, YouTube saw a 31% surge in spending while other streamers saw a far more modest 6% growth. Netflix and Max commanded by far the highest CPMs [the cost to reach 1,000 viewers].
The data covers clients of Tinuiti, which bills itself as the largest independent performance marketing agency. As such, the data provided is skewed toward retail and direct-to-consumer advertisers more than brand marketers. But Tinuiti pulls out data from new clients, so the data comes from a stable client base year over year.
This is the first time since the fourth quarter of 2021 that all five of the biggest platforms tracked—Google Search, YouTube, Facebook, Instagram and Amazon Sponsored Products—saw spending growth in Tinuiti’s data. Part of that owes to soft comparisons a year ago, but it also reflects an uptick in spending broadly, said Andy Taylor, VP of research for Tinuiti.
Instagram led growth, up 31% year over year, on the strength of its Reels video platform, Taylor said. Its Meta sibling Facebook had the slowest growth of the five, however, up only 2%.
At the same time, all five of the platforms saw pricing on a CPM basis flat or down substantially. Instagram, while growing fastest, also had the biggest CPM decline, which Taylor attributed to newer platforms such as Reels tending to have lower pricing and attracting lots of spending.
In a similar fashion, spending on TikTok, a relatively newer platform with a steady stream of new ad products, rose 11% even as CPMs fell 4%.
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Google paid search spending growth has stabilized since the fourth quarter, up 11% last quarter up from 10% last quarter, and cost per click was flat after declining last quarter. Cost per click among retail advertisers continued at a healthy pace from last year, up 25%. This was despite the average order value rising only 1%, which means a margin squeeze for Google search advertisers.
Spending growth on Amazon Sponsored Products slipped to 8% in the second quarter from 12%-25% in the prior three quarters, with cost per click declining 2%. Amazon Sponsored Display spending declined by 1% on a 10% decline in cost per click.
Walmart grew faster, with sponsored products spending up 39% on a 4% decline in cost per click. The retailer’s move last year to second-price auction bidding continued to help drive spending, but the decline in CPC moderated year over year, Taylor said, and Walmart’s CPC actually soared 41% in June as it hit the anniversary of the second-price auction move.
Video and connected TV advertising saw a divergence between YouTube winning on lower pricing while Netflix and Warner Bros. Discovery’s Max won with soaring CPMs.
In video, YouTube saw continued declines in CPMs, down 18% year over year in the second quarter, declining for the fifth straight quarter, though spending among Tinuiti clients still rose 9%. YouTube saw spending on its connected TV offering soar 31% in the quarter, CTV now accounts for 26% of spending on the platform by Tinuiti clients.
But streaming video excluding YouTube rose a far more modest 6%, which suggests networks have reason for their worries about the Google platform’s growing CTV incursion.
Netflix and Max commanded the heftiest CPMs among streamers, with Netflix commanding CPMs nearly three times those of other streaming services. The heavy demand is likely one reason that Jeremi Gorman, global director of advertising for Netflix, was able to tell a P&G conference earlier this month the service will forgo P&G business if it insists on buying through its demand-side platform (The Trade Desk), though Netflix is open to ultimately working with a limited number of DSPs.
Netflix and Max CPMs are fairly comparable, which Taylor attributes to “how much advertisers are willing to pay to get in front of those premium users,” he said. “Advertisers are willing to pay that premium and invest heavily in it particularly with a newer platform.”
Both platforms have viewers who can’t be readily reached through other networks, Taylor said. “The relative value of that investment is going to vary depending on the advertiser,” he said. “But they wouldn’t really be investing if they weren’t seeing the return.”
