Report Q3/2023
State of Commerce Advertising
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Report Q3/2023
As we embark on the third quarter, we are pleased to present the third edition of our “State of Commerce Advertising” report. How satisfied is the industry with the year’s second quarter? How did sales develop? And above all, how optimistic or pessimistic are experts about the coming months? We answer these and other questions in this brand-new edition of our panel. For the first time, we also asked the panelists to describe their usage behavior vis-a-vis generative artificial intelligence.
Happy reading!
Happy reading!
About the
Commerce Advertising Panel
For the industry index “State of Commerce Advertising Q3/2023”, 45 industry experts were surveyed between June 5 and 19, 2023. The participants were advertisers, publishers, agencies, networks, and technology providers.
Key learnings
1.
Nearly 37 percent of respondents now generate more than a quarter of their sales with Commerce Advertising.
2.
For 67.6 percent, sales remained the same or increased in the past quarter.
3.
Over half (56.8%) are optimistic about
the coming months.
the coming months.
4.
Almost 60 percent expect
sales to increase in Q3.
sales to increase in Q3.
5.
Artificial intelligence (AI) remains the top industry trend: 46 percent of respondents use generative AI tools on a weekly to daily basis.
State of Commerce Advertising
Overall state of industry
The first quarter of the year is traditionally difficult in many industries – including Commerce Advertising. How did satisfaction and optimism develop with regard to Q2 and Q3?
How would you describe your company?
22.2%
Advertiser
22.2%
Publisher
31.1%
Network
24.5%
Agency/other
How satisfied are you with the last quarter?
Close to half of the respondents (48.7%) are either very satisfied or satisfied with the past quarter, and only 21.6% are dissatisfied.
Very satisfied
10.9%
Satisfied
37.8%
Neutral
29.7%
Dissatisfied
21.6%
Very dissatisfied
0.0%
How would you characterize your outlook for the upcoming months?
Respondents are even more positive about the upcoming quarter than they were about the past one. More than half of them (56.8%) are optimistic or very optimistic about the coming months, while the proportion of pessimists is below 11%.
Very optimistic
16.3%
Optimistic
40.5%
Neutral
32.4%
Pessimistic
8.1%
Very pessimistic
2.7%
State of Commerce Advertising
Market Situation Review & Preview
After analyzing the subjective assessments, let's review the measurable key figures to determine whether there was a sales increase in Q2. Let’s also hear how respondents expect sales to develop in Q3.
How did your sales develop compared to the previous quarter?
For 67.6% of respondents, sales in the past quarter remained at the same level (37.8%) or even increased (29.8%). This represents an increase of over ten percentage points compared with the previous quarter. The data thus suggests a positive, rising sales trend in Q2, which could be one explanation for the unflagging sense of optimism.
Q2/2023
Q1/2023
With 67.6 percent of respondents reporting stable or even increased sales figures, we can speak of a positive sales trend – an encouraging tendency in Commerce Advertising. Especially with nearly 30 percent reporting an increase. Overall, this points to positive momentum and inspires confidence for the rest of the year.
Felix Witte
General Manager
& SVP Publishers, mrge
& SVP Publishers, mrge
What is your sales forecast for the coming quarter compared to this quarter?
Sales forecasts for the upcoming third quarter also reflect the respondents’ confidence: Almost 60 percent expect sales to increase. In our last survey, this figure was only 54.8 percent. And just under eleven percent predict a decline in sales (in the last survey, it was more than 14%).
Q2/2023
Q1/2023
State of Commerce Advertising
Trends & Challenges
What key industry trends and growth potentials in Commerce Advertising did respondents pinpoint in Q2? In addition, for the first time in this report, we broached the topic of “generative AI” and asked to what extent such tools are already being used in Commerce Advertising.
In a few words, what is the biggest challenge in Commerce Advertising that you expect in the next quarters?
Once again, we asked participants about what they consider the most significant challenge in Commerce Advertising. Just like last time, inflation and recession and their consequences played a role. Respondents frequently mentioned budget cuts and thriftiness – among companies as well as consumers. Respondents also mentioned the challenge posed by unstable ROAS, for example, and occasionally topics such as artificial intelligence:
What is your favorite billing model?
In contrast to Q1, cost-per-order (CPO) is no longer the sole most popular billing model. CPO and CPC (cost-per-click) are now tied at 40 percent each.
Cost
per Click
per Click
Cost
per Order
per Order
Cost
per Lead
per Lead
Tenancy
placement
placement
Other
What are the top industry trends in Commerce Advertising right now?
Up to 3 answers possible
As in the last survey, the majority of experts see artificial intelligence and machine learning as the hot topic. The figure even increased from 55.8 percent to 63.3 percent. Privacy-friendly advertising (36.7%) and dynamic attribution models (33.3%) follow at a distance. Meanwhile, interest in the Pre-Cyber Week phase saw an increase from 2.9% to 20%. This surge of interest is expected, considering the proximity to Cyber Week. Influencer marketing, on the other hand, lost considerable ground, slipping from 41.2 to 23.3 percent.
Q2/2023
Q1/2023
Have you already used generative AI tools (e.g. ChatGPT, Midjourney) in your everyday work?
The significance of artificial intelligence, which has been identified as a key industry trend in the past two reports, was further validated in this third edition. Its importance remains consistent and continues to have a significant impact on the industry. For the first time, we also asked our panel about their usage habits. The result: Generative artificial intelligence has reached Commerce Advertising. In fact, 80 percent of respondents said they have already worked with generative AI tools.
If you use generative AI tools, how often do you rely on them for your work tasks?
When we look at frequency, however, the picture is slightly more differentiated: One-third of the industry experts use generative AI tools less than once a month, but just under 23.3 percent each use them at least once a week or every day. All in all, almost half (46.6%) of the respondents use generative AI at least once a week.
Which generative AI tools do you use most frequently?
The result of an optional question showcases that almost all respondents mentioned OpenAI's ChatGPT when asked about the specific tools used, with only one person mentioning Google's alternative, Bard.
"These results suggest that generative AI is becoming more and more important in Commerce Advertising and is being used as a valuable tool for daily work. The increasing adoption and use of this technology reflects the innovative spirit of the industry and indicates the high potential for future growth and development in Commerce Advertising."
Nikolaus Spitzy
General Manager
& SVP Advertisers, mrge
& SVP Advertisers, mrge
What are the primary areas of growth potential for publishers and advertisers in Commerce Advertising?
Up to 3 answers possible
The majority of respondents (56.7%) perceive higher commissions as having the greatest potential, specifically among publishers and strategic partners. For whom the increase in commissions has become much more relevant. In contrast, mobile and app tracking (-12.3%), server-to-server tracking (-15.8%), and improved tracking technologies in general (-12.2%) have lost a great deal of ground.
Q2/2023
Q1/2023
What share of your total sales is generated by Commerce Advertising?
36.7 percent of the participating industry experts now generate more than a quarter of their total revenue with Commerce Advertising. This is a sharp increase of over seven percentage points compared to the last quarter. For one-fifth of respondents, the share of total revenue generated by Commerce Advertising is between 15 and 25 percent – double the previous quarter's figure. Overall, more than half of the respondents (56.7%) generate at least 15 percent of their revenue through Commerce Advertising.
Q2/2023
Q1/2023
State of Commerce Advertising Q3/2023
Executive Summary
Commerce Advertising is on the rise
In the past quarter, more respondents reported increased Commerce Advertising sales than in Q1 of 2023. At the same time, Commerce Advertising accounts for an ever-larger share of our respondents’ total sales. Both aspects in combination show that Commerce Advertising is becoming more relevant from quarter to quarter – for advertisers, publishers, and agencies alike.
Satisfaction and optimism
AI has reached Commerce Advertising
The last two editions of our Commerce Advertising Index found that artificial intelligence (AI) is one of the key trends in the industry. In this edition, we surveyed AI usage habits for the first time. The results show that AI tools – ChatGPT, in particular – are already being used extensively. The logical next research step is to discover for what purpose the experts are using these tools within Commerce Advertising.
Join the Panel
For its “State of Commerce Advertising” index, mrge regularly surveys the industry’s top experts and decision makers. Become part of this expert panel and actively shape the future of the industry! Register today, join our next panel survey in September 2023, and receive the results before everyone else:
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