Despite costs increasing, conversion rate has remained steady, with advertisers making the most of the latest Google and Meta tools.

Digital advertising spend increased across retail media, paid search, and paid social in Q2 2024, despite rising ad prices, according to new data from Skai.

By the numbers:

• Retail media spend grew 21% year-over-year.

• Paid search spend increased 6% YoY.

• Paid social spend rose 13% YoY.

The big picture. Higher ad prices drove most of the spending growth, while ad volumes (clicks and impressions) slowed or decreased in some channels.

Yes, but: Despite higher prices, key performance metrics like conversion rates have largely kept pace, suggesting improved ad efficiency.

Why we care. Despite higher prices, conversion rates are holding steady, suggesting potential opportunities for advertisers who can navigate the changing landscape effectively and aren’t deterred by all the AI updates.

Between the lines: The shift to newer ad formats like Google’s Performance Max and Meta’s Advantage Shopping Campaigns+ is contributing to the changing dynamics.

• Performance Max now accounts for 13% of paid search spend on Skai’s platform:

• Advantage Shopping Campaigns+ spending grew nearly 6x YoY, but still only makes up 5% of Meta spend

What to watch. As advertisers adapt strategies to handle higher prices, historical trends suggest this period of price increases may be temporary.

Bottom line. Advertisers are navigating a complex landscape of rising costs and evolving ad formats, but so far are maintaining performance through optimization and new tools.