Search Advertising is Firing on All Cylinders

29 October 2021


For the first time in many years, search advertising has seen growth with a 16% increase in search volume and 17% increase in search pricing. 

Consumers have seen their old spending habits disrupted by COVID, and the new e-commerce focused status quo will persist beyond the COVID crisis. This is the primary reason that has driven spending for the past 5+ years; small businesses are spending to support online commerce. Shopping-related search advertising spending has grown by +50% and shopping-related spending is seeing an additional $28 billion of spending this year globally. 

However, that is not the only driver of search advertising spending this year. Core search engine spending is also spiking and will increase by $33 billion. This is partially driven by the weak comparison from last year when core search engine spending declined during COVID. It is also reflective of budgets more broadly shifting towards keyword advertising. In the current privacy landscape where there is pushback against targeting, keyword targeting remains the gold standard for privacy-safe campaigns. Consumers are telling the advertiser what they are interested in on keyword-based formats, and this holds true on both core search ads and on e-commerce sites. 

By search provider, Google remains the dominant global search provider, with more than 60% total share. E-commerce sites like Alibaba and Amazon are catching up, with huge size, faster growth, and new ad formats being introduced. Future search advertising innovations such as voice search, visual search and new enhanced search ad formats, should also be noticed. These will all contribute to a continued tailwind to search advertising spending despite it already being the dominant portion of digital budgets. 

Finally, while search advertising is the current beneficiary of the growth of e-commerce, social networks are trying to take some of those incremental budgets. Most social media networks are developing in-app commerce solutions that will make it easier and more convenient for consumers to complete transactions within individual walled gardens. For a full picture of search advertising, download MAGNA’s Global Search Report by filling out the form below. 

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