Holiday Paid Search Budgets Up, Returns Steady

December 12, 2011

This article is included in these additional categories:

Analytics, Automated & MarTech | Data-driven | Digital | Paid Search | Retail & E-Commerce

kenshoo-holiday-paid-search-budgets.jpgSearch advertising budgets for the holiday season to date (defined as November 1-28) were significantly higher than in the comparable days last year, as retail advertisers increased their overall investment by 29% during the 4 weeks leading up to Cyber Monday, according to [download page] a December 2011 report from Kenshoo. Data from the “2011 Online Holiday Shopping Report: Early Edition” indicates that the average cost per click (CPC) for the four-week period was up 9%.

Despite the overall increase in competition on individual keyword bid auctions, return on ad spend remained steady year-over-year at $5.22 for the period, meaning that for every dollar retailers spent on paid search, they made more than $5 in sales revenue.

Black Friday boasted the largest share of search advertising revenue for the 4-week period (10.93%), followed by Cyber Monday (9.34%), and Thanksgiving (7.09%).

Consumers Spend More

During the four-week period, total sales revenues for retailers driven by search advertising rose 22% compared to the corresponding days in 2010, powered by increased per-session spending by consumers: the average order value (revenue / conversions) for the period was up 4.6% year-over-year, rising from $124.28 to $129.94.

CTRs Up 11% Y-O-Y

kenshoo-holiday-ctr.jpgFor the 4-week period studied, total search advertising impressions rose year-over-year by 8% and clicks by 19%, while the five days from Thanksgiving through Cyber Monday saw a 16% increase increase in clicks, even with a 9% decline in total impressions. Overall, paid search advertising click-through rates for the holiday season to date in 2011 rose 11% over 2010.

Bigger Bang for the Buck on Cyber Monday

performics-spend-clicks-cpcs.jpgMeanwhile, according to Performics, paid search spend and clicks exploded year-over-year on both Black Friday and Cyber Monday for the aggregate group of its retailer clients. On Black Friday, clicks were up 69% and spend up 112%, while on Cyber Monday, clicks were up 89% and spend 68%. The biggest Cyber Monday story for Performics’ clients, though, was that CPCs dropped 11% compared to Cyber Monday 2010, meaning that they saw bigger bang for their paid search buck on Cyber Monday than Black Friday.

More details on paid search strategies for the holidays can be found at MarketingVox.

About the Data: The Kenshoo data is based on the Kenshoo U.S. Retail IndexTM, a cross-section of Kenshoo retail advertisers covering verticals like apparel, electronics, entertainment, home improvement, gifts, luxury goods, and toys. The data set includes paid search advertising in the U.S. across channels like Google, Yahoo, and Bing for the 28 days leading up to Cyber Monday in 2011 and compared to that same period in 2010. The 2011 statistics were culled from an aggregation of more than 12 billion total search advertising impressions, 160 million clicks and 3 million online sales transactions.

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