State of Digital Marketing Report
Marketing and advertising insights for digital marketers.
We analyzed data from tens of thousands of online businesses to help marketers understand overall digital advertising trends and recommend strategies to further improve marketing ROAS and ROI.
Table of Contents
2024 Q4 Report Highlights
- Display CPM in Q3 was up 39% year over year. The CPM movement aligns with historical seasonality trends that are typical as the end of the year draws near. On social media, CPM for TikTok and Pinterest followed a similar trajectory to Display. However, Meta’s CPM started to rise in July, potentially driven by an increase of political ad spend.
- The 2024 peak holiday shopping season, which extends from Thanksgiving to Christmas, is the shortest it’s been in 5 years. This condensed timeline could contribute to increased shipping costs and risks of delay. The U.S. presidential election in early November could also further distract consumers from holiday shopping. To navigate these challenges, marketers need to allocate budget strategically across various periods during the holiday period to optimize their return on investment.
- As many businesses begin 2025 planning, there are a few key areas business and marketing leaders need to consider, including capturing the benefits of CTV advertising, mitigating the impact of a potential TikTok ban in the U.S., preparing for the evolving uses of third party cookies, and experimenting with how to incorporate AI.
What does the CPM trend reveal?
CPM, or cost per mille, is an advertising metric that measures the average cost of showing an ad one thousand times. CPM, similar to the cost of any goods, is determined by supply and demand. In the world of digital advertising, publishers serve as the suppliers; the websites or mobile apps that host and deliver ads to advertisers’ target audiences.
The selling and buying of digital ads on the Web is typically conducted in an auction format that can be handled programmatically by two types of platforms - the Supply Side Platform (SSP), representing the publishers, and the Demand Side Platform (DSP), representing the advertisers. Since the amount of advertising space offered by the publishers doesn't typically fluctuate, changes in CPM are mostly driven by advertisers’ demand for ads.
Display Advertising CPM Trend
The cost of display advertising, as measured by average CPM, was up 39% in Q3 year over year. The timing of this uptick is typical as we approach the end of Q3.
Note: CPM varies by industries, geographies, and channels. CPM of specific campaigns may experience different patterns.
Social Advertising CPM Trend
The cost of social media advertising, as measured by average CPM, across Meta, TikTok and Pinterest all trended upward toward the end of Q3, echoing the trajectory of Display CPM. Meta’s CPM, however, started to increase earlier than TikTok’s and Pinterest’s. Since Meta is the only one of these three social platforms supporting political ads, an increase in political ad spend could be the driving factor behind this spike in July and August.
The Economic Outlook–Light at the End of the Tunnel
The U.S. Inflation Rate continued to trend downward in Q3, dropping to 2.4% in September; its lowest level in three and half years. As a result, the Fed lowered the benchmark federal funds rate by 0.5 percentage points.
US Inflation Rate
U.S. job growth also showed strong gains in September. These numbers for July and August were also amended to reflect a more positive projection compared to the previous estimate.
US Job Growth
The U.S. consumer sentiment index showed signs of rebound in the past few months, signaling the recovery of consumers’ confidence in the economy.
US Consumer Sentiment Index
“In Q4, we're dealing with the last (and often largest) portion of annual marketing budgets. With CPMs reaching annual highs through the peak season, advertisers need to determine daily budgets that effectively promote holiday sales before ‘last ship’ dates—and buying behavior drop-off—in order to prioritize the most effective aspects of Q4.”
Will Yeo Manager, Customer Onboarding
How to Excel in 2024’s Compressed Holiday Shopping Season
With all the encouraging economic data and the interest rate cut in September, businesses should expect an easy-breezy holiday shopping season this year, right? Not quite.
It’s true that consumer spending is expected to be strong this holiday season. According to eMarketer, ecommerce sales in this year’s holiday shopping season are forecasted to grow 9.5% from last year, with mobile commerce growing at an even faster rate of 13.4%, the highest since 2021. However, 2024 has a number of unique challenges that marketers need to navigate carefully.
The Unique Challenges of the 2024 Holiday Shopping Season
2024’s Peak Holiday Shopping Season is Five Days Shorter than 2023’s
The length of the peak holiday shopping season, the period between Thanksgiving and Christmas, changes every year. The 2024 peak holiday shopping season has only 27 days, compared to 32 days in 2023. That means businesses will have five fewer days to meet their holiday sales targets compared to last year.
Number of Days Between Thanksgiving and Christmas
The Election Factor
In a typical year, Halloween kicks off the fall/winter festive season and turns consumers’ attention toward the holidays. However, with the U.S. presidential election taking place on November 5, and given the incredibly tight state of the race, consumers’ attention will be mostly consumed by the election news until a final winner is confirmed. This will further shorten the window for marketers to reach and engage with their target customers for the holiday season.
Shipping Logistics Considerations
Higher consumer spending coupled with a shorter shopping season will add tremendous pressure to holiday shipping logistics, including higher shipping fees and an increased risk of shipping delay. eBusinesses with physical goods will need to pay extra attention to shipping costs and delivery estimates and be transparent to the customers about the delivery dates.
Advertising Budget Allocation Timing
In order to effectively navigate these challenges,advertisers will need to strategically allocate budget across various moments during the holiday shopping season. While there are factors and considerations unique to each industry and business, here are some general guidelines for allocating budget throughout November and December.
- Period
- Pre-Election
- Timing
- Now to the Election Day
- Budget Level
- Low
- Remarks
- No need to compete with political ads while consumers’ minds are not on holiday shopping.
- Period
- Post-Election
- Timing
- After the Election Day
- Budget Level
- Gradual increase to Medium
- Remarks
- The sooner the elections results are clear, the quicker advertisers should increase the budget.
- Period
- Pre-Thanksgiving
- Timing
- A week before Thanksgiving to the day before Thanksgiving
- Budget Level
- Medium or Medium-low
- Remarks
- During the period right before Thanksgiving, consumers tend to hold off shopping and wait for the big sales after Thanksgiving. Ads are important to keep your brand top-of-mind with target customers, but don’t expect a lot of conversions.
- Period
- TG/BF/CM
- Timing
- Thanksgiving Day to the end of the Cyber Monday/Week promotion
- Budget Level
- High
- Remarks
- Expect stronger competition during this period than last year as advertisers may allocate more budget due to the compressed holiday shopping season.
- Period
- Post TG/BF/CM
- Timing
- After Cyber Monday/Week to the Last Ship Date of your business
- Budget Level
- Medium or Medium-high
- Remarks
- Keep in mind that Cyber Monday this year is already in December when accounting for shipping timelines.
- Period
- End of the year
- Timing
- After the Last Ship Date
- Budget Level
- Low
Important Trends to Consider for 2025 Planning
New Channel Dynamics
CTV
Connected TV (CTV) advertising refers to delivering targeted advertisements through internet-connected television sets or devices. It leverages the benefits of precise targeting and cost effective programmatic media buying to deliver video ads straight to the screens in people’s living rooms. According to eMarketer, CTV is projected to grow 13.3% from last year and will reach $32.5 billion in 2025.
Compared to traditional TV advertising, CTV has a much lower barrier to entry. As many demand-side platforms are adding CTV to their offering, it’s relatively easy for businesses to explore this channel.
TikTok
TikTok was the fastest growing social network, in terms of both users and advertising revenue, in the past couple of years. In 2025, however, its validity in the U.S. will be in doubt. While it may be unlikely, yet possible, TikTok will be banned in the U.S. from January 2025, businesses relying on TikTok for brand building and customer acquisition should consider further diversifying their channel mix to mitigate the uncertainty from a potential TikTok ban.
Third Party Cookies
Following Google’s announcement of their updated approach to third party cookie deprecation in July, there hasn’t been much news about Google’s next step. However, businesses need to start preparing for Google’s roll-out of the third party cookie opt-out feature in Chrome. At a minimum, businesses should prioritize building up their zero and first party data collection strategies as a key marketing objective in 2025. For more information regarding advertising strategies in the post third party cookie era, please refer to our zero and first-party data strategy guide.
AI Applications in Advertising & Marketing
Since ChatGPT’s debut nearly two years ago, it seems almost every software platform has incorporated some type of AI functionality. From generating text and images, to optimizing campaign ROI, AI is becoming an essential tool for advertisers and marketers. The proliferation of AI will only accelerate in 2025.
While AI can be used in many areas, it doesn’t mean the more AI, the better. Each business’ AI adoption strategy is unique and should evolve overtime. Exploring and experimenting how AI can help enhance your marketing and business performance should be a priority for business leaders in 2025.
FAQ
What is the AdRoll State of Digital Marketing Report?
The AdRoll State of Digital Marketing Report offers marketers insights into business and marketing trends based on AdRoll’s performance statistics of more than 20,000 online businesses across finance, beauty and fashion, fitness, technology, travel and other industries.
What are the key performance indicators (KPI) reported in the AdRoll State of Digital Marketing Report?
The AdRoll State of Digital Marketing Report provides the average CPM (cost-per-mille) trend on the following advertising media:
- Display Ads
- Meta Ads
- TikTok Ads
- Pinterest Ads
How often will the information in the AdRoll State of Digital Marketing Report be updated?
The information in the AdRoll State of Digital Marketing Report will be updated on a quarterly basis.