• by Laurie Sullivan , Staff Writer @lauriesullivan, April 26, 2023

Ad investment slowed in the second half of 2022, even as year-ago comparisons declined, according to data from performance marketing agency Tinuiti.

Advertisers focused ad spend on channels and formats known for bolstering bottom-of-funnel demand capture, such as Google paid search and Amazon Sponsored Products, a trend that has continued in 2023.

Tinuiti’s latest Digital Ads Benchmark Report explores the digital ads landscape across Google, Meta, Amazon, TikTok, and others. A few interesting data points follow, but the report is full of interesting trends. 

One interesting insight from the data, in the second half of the first quarter, Amazon's share of Google Shopping impressions rose an average of 20 points compared with a year earlier. The ecommerce giant greatly increased its visibility in Google Shopping results, while rival Walmart’s impression share slipped to end the quarter.

Amazon Sponsored Products spend grew 12% year-over-year (YoY) in the first quarter without a major Prime member event since Q2 2022.

Ad pricing declined relative to last year for the second straight quarter, although advertisers in several product categories saw cost per click (CPC) rebound to positive territory in Q1 after Q4 declines.

Google released revenue numbers on Tuesday, but they do not provide details of search and CPC growth or decline.

Tinuiti’s report shows total U.S. spending on Google paid search text and Shopping ads grew 9% YoY in Q1 2023, down from 10% growth a quarter earlier. Clicks grew 11% YoY in Q1 -- up three points from Q4 2022 -- but CPC growth decelerated for the seventh quarter in a row.

Google search ad CPCs fell 1% YoY in Q1 2023, the first decline advertisers have seen since Q3 2020. Since that time, Google CPCs had grown by as much as 36% YoY in Q2 2021, as they rebounded from significant declines during the early months of the pandemic.

Google search CPCs are still running considerably above pre-pandemic levels.

Retailers saw CPCs close the gap with 2022 levels by the end of the quarter. Weekly retail Google search CPCs were up by an average of 20% compared to 2019 levels in Q1 2023, down from 27% average growth a year earlier. After a weak start to the year, retail CPC growth picked up, with CPCs ultimately running higher than 2022 for the final full week of Q1.

Official measures of inflation show that U.S. consumer price growth has been decelerating since mid-2022, but growth in the average order value (AOV) generated by Google search ads has continues to slow for the past year.

With comparisons against the early months of the pandemic, AOV growth spiked to 14% YoY in Q2 2021, but has trended lower since, which may help explain why Google search CPC growth has slowed during the same period.

In Q1 2023, Google search ad AOV was up just 2% YoY, according to Tinuiti data.