COLUMBIA, Md.--(BUSINESS WIRE)--Merkle (www.merkleinc.com), a leading technology-enabled, data-driven performance marketing agency, announced the release of its Q2 2016 Digital Marketing Report today. The report includes insights on recent Google product announcements and other contributors to Google’s growth rate. It also contains analysis on whether Facebook can sustain its impressive results, as well as observations on Yahoo’s big move to show Google search ads as traffic from its Gemini platform and Bing declines. In support of the research findings, Merkle is hosting a complimentary webinar on Thursday, July 28 at 2:00 p.m. ET. To download the full report or to register for the webinar, visitwww.merkleinc.com.

The Digital Marketing Report analyzes trends in paid search, SEO, social media, product ads, programmatic and display advertising, comparison shopping engines, and more. It also provides comprehensive and detailed insight into digital marketing developments using data from Merkle’s vast client base. In Q2 2016, the data shows that growth in advertiser spending on Google search ads remained robust, despite a slight deceleration from Q1 growth levels. Google’s ad revenue growth picked up in the second half of last year, so it will look to new developments like the addition of a fourth top-of-page ad on mobile results, along with its officially announced product changes, to help keep advertiser spending growth strong.

Also propelling Google growth, Product Listing Ads (PLA) click volume grew nearly five times faster than Google text ad volume in Q2. An influx of PLA traffic from Google partners, including Yahoo and Google image search, has been a major contributor to the strength of PLAs, which are poised to produce over half of retailers’ Google search ad clicks by year’s end.

Additionally, combined volume from Bing Ads and Yahoo Gemini platforms continues to weaken. However, untangling the performance of Bing and Yahoo is a complex exercise with Yahoo now serving ads on its properties from all three major US search ad platforms, including Google AdWords.

The display channel proved to be a potent source of advertiser spending growth in Q2, outpacing all other major channels. Facebook drove the trend with long-term advertisers branching out to test new partners and ad formats, such as Dynamic Product Ads.

Other notable Q2 2016 highlights include:

Paid Search

• Advertiser spending on Google paid search grew 22% Y/Y in Q2 2016, a slight deceleration from 25% growth in Q1. Click growth increased slightly to 34%, but cost-per-click (CPC) fell 9%.
• Spending growth for Google text ads slowed to 10% Y/Y as CPC growth for brand keywords fell from 10% in Q1 to 0% in Q2. Google Shopping Ad spending growth rose to 43% as an influx of partner traffic bolstered total click volume.
• Early Google Expanded Text Ad results show the new format producing as much as 16% higher click-through rates than Google’s legacy text ad format.
• Combined spending on Bing Ads and Yahoo Gemini search ads fell 17% Y/Y as click declines continued to decrease. Bing Product Ad spending fell for the first time since the format’s launch, likely the result of Yahoo moving to show more Google PLAs.
• Phones and tablets produced 53% of all paid search clicks in Q2, the same rate as a quarter earlier, but up 12 points from a the previous year. Google’s share of clicks from mobile increased slightly to just over 57%.

Organic Search & Social

• Organic search visits fell 7% Y/Y in Q2, down from 11% Y/Y growth a year earlier, as organic listings face increased competition from paid search ads, particularly on mobile.
• Mobile’s share of organic search visits rose to 46%, but that still lags behind the 53% of paid search clicks that mobile produces, as well as the 47% share that mobile produced for organic search a year ago.
• Google produced 86% of all organic search visits in the US and 90% of mobile organic search visits. Google’s share of mobile organic search has increased by nearly two points in the past year.
• Social media sites accounted for 2.8% of site visits in Q2 2016, with Facebook producing 63% of all site visits driven by social media.

Comparison Shopping Engines

• The eBay Commerce Network commanded a majority of advertisers’ comparison shopping engine (CSE) spending for the first time in Q2. Along with Connexity, the two dominant CSE platforms accounted for 97% of all CSE ad spending.
• Advertiser revenue produced by eBay Commerce Network and Connexity listings grew by 33% and 23% Y/Y respectively, however, the two platforms combined for less than 10% of the revenue produced by Google Shopping Ads among advertisers participating in all three platforms.

Display Advertising

• Total display advertising spending grew 62% Y/Y driven by very strong results from Facebook, where Merkle advertisers increased their investment by 121% Y/Y. Retargeting accounted for 62% of all display spending in Q2.
• The Google Display Network (GDN) also delivered spending growth, with advertisers seeing its share of total Google ad spending increase to 12%.

About Merkle

Merkle is a global data-driven, technology-enabled performance marketing agency and the largest independent agency in the US for CRM, digital, and search. For more than 25 years, Fortune 1000 companies and leading nonprofit organizations have partnered with Merkle to maximize the value of their customer portfolios. The agency’s heritage in data, technology, and analytics forms the foundation for its unmatched skills in understanding consumer insights. When combined with its strength in performance media, Merkle creates customer experiences that drive improved marketing performance and shareholder value. With more than 3,400 employees, the privately held corporation is headquartered in Columbia, Maryland with 15 additional offices in the US and offices in Barcelona, London, Shanghai, and Nanjing. For more information, contact Merkle at 1-877-9-Merkle or visit www.merkleinc.com