Digiday+ Research: Is Google’s value to brands past its prime with holiday shopping underway?

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We’re hitting the heart of the holiday shopping season, and as brands take this time to up their marketing on TikTok and Amazon, the story looks a bit different for Google. While brands and retailers still see Google as an important part of their marketing strategy during the holidays and throughout the rest of the year, it’s possible that Google’s value to marketers has already peaked.

That’s according to Digiday+ Research surveys of more than 100 brand and retailer professionals conducted throughout the year in 2022 and 2023.

Digiday’s surveys found that, while the vast majority of brands and retailers are marketing on Google this year as they have in years past, the percentage of those doing so has actually dropped since last year. Just shy of three-quarters of brand and retailer pros (73%) said in Q4 of this year that they’ve used Google as a marketing channel so far this year — which is a lot.

But that 73% is down significantly from Q4 last year, when 84% of brand and retailer pros told Digiday they had used Google for marketing by that point in the year.

This drop in brands’ usage of Google as a marketing channel makes sense when we look at how confident brands are that Google drives marketing success for them. That’s because Digiday’s surveys found that brands’ confidence in Google has actually stalled this year.

About one-third of brand pros have told Digiday throughout 2023 that they’re confident (as opposed to very confident or somewhat confident) Google drives marketing success (33% said they were confident in Google in Q1 and 34% said so in Q3). The previous year, about half of brand pros said the same (48% in Q1 2022 and 55% in Q3 2022).

Meanwhile, the percentage of brand pros who said they’re very confident that Google drives marketing success saw a significant drop between Q1 and Q3 of this year (from 36% to 21%), and those who said they’re not confident at all in Google saw a noteworthy increase. This increase is noteworthy because in Q1 2023, zero respondents to Digiday’s survey said they weren’t confident at all in Google’s ability to drive marketing success. But 8% of brand pros said they weren’t confident at all in Google in Q3 2023.

Additionally, the percentage of brands who said they’re only slightly confident that Google drives marketing success has been trending upward over the last year, from zero respondents in Q3 2022, to 9% in Q1 2023, and then to 13% in Q3 2023.

In terms of marketing spend, all of this translates into brands spending less on Google as a marketing channel than they have in the past. Digiday’s surveys found that the percentages of brands who put a large or very large portion of their marketing budgets toward Google saw significant dips from Q1 to Q3 of this year, while the percentages of those who spend a small or very small amount on Google saw significant increases over the same period.

To be specific, nearly a quarter of brand pros (24%) said in Q1 of this year that they put a very large portion of their marketing budgets toward Google, compared with just 9% in Q3. And the percentage of brands who put a large portion of their marketing budgets toward Google has been trending downward since Q3 2022, when 52% of brand pros told Digiday they spent a large amount of their marketing spend on Google. That percentage fell to 36% in Q1 2023, and fell again to 23% in Q3 2023.

At the same time, the percentage of brands who said they spend only a little on marketing on Google saw significant increases. In Q3 2023, 23% of brand pros told Digiday they put a small portion of their marketing budgets toward Google, up from just 9% in Q1. And while zero respondents to Digiday’s survey in Q1 2023 said they spent a very small amount on Google, 7% said the same in Q3.

With the percentage of brands putting a large portion of their marketing budgets toward Google trending downward and the percentage of brands putting a small portion of their marketing budgets toward Google trending upward — with both meeting at 23% in Q3 2023 — it’s a possible indication that, from marketers’ point of view, Google’s value has surpassed its peak and could stall into 2024.

But marketing on Google is certainly not out for the count by any means. In fact, Digiday’s surveys found that it remains an important part of brands’ and retailers’ holiday marketing plans this year — albeit at about the same rate it was important last year (i.e. it’s not growing in importance).

A slight majority (51% of brand and retailer pros) said in Q4 this year that Google’s importance to their holiday marketing plans will stay the same this year, while just short of half (47%) said the channel will be more important this year than it was last holiday season. These percentages are essentially unchanged from Q4 2022, when 50% of brands and retailers said Google’s importance to their holiday marketing would remain unchanged and 45% said its importance would grow.

Meanwhile, just 2% of brands and retailers said in Q4 this year that Google would be less important to their holiday marketing plans this year.

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