Search ads in Canada surge with expanded ecommerce and ‘near me’ lookups

Search advertising is the oldest form of digital promotion, with roots in Google’s rise during the late 1990s. Search engine optimization (SEO) and search engine marketing (SEM) were disciplines that brought legitimacy to digital marketing departments. The sustained performance of search to this day is a big part of why Google remains such a powerful digital ad platform.

We expect a resurgence in search ad spending. Growth will be 9.3% this year, but that rate will more than double to 19.0% in 2023, then moderate to 14.3% in 2024.

Search ad spending in Canada will account for 44.5% of digital ad spending this year. That’s down from 49.7% five years ago, as display formats—especially in social media and video—gained a larger share of the digital market. Display formats will account for slightly more than half (54.2%) of the digital market this year.

Retail media networks will provide a boost to search marketing. The rise of retail media is tied closely to Canada’s recent surge in ecommerce sales: a whopping 75.0% growth rate in 2020 and a 25.5% increase in 2021, driven by pandemic buying. Retail search ad products are bottom-of-the-funnel tactics, one click away from many purchases. Amazon Ads leads in this regard, but Walmart Connect is also aggressively marketing search ad products in Canada.

“Near me” searches on mobile are helping to push search marketing forward. Mobile will account for 76.0% total search spending in Canada this year, as queries based on the user’s location data have become a common form of search. For everything from restaurants to gas stations to hardware stores, smartphones are the primary tool for searching on the go.