Holiday eCommerce Blitz: Totals & Takeaways, Part II
December 17, 2019 | Contributed by: Mike Boland
Data Scout is LSA’s series that curates and draws meaning from third-party data. Running semi-weekly, it adds an analytical layer to the industry data that we encounter in daily knowledge building. For LSA original data, see the separate Modern Commerce Monitor™️ series.
Figures continue to roll in for this year’s holiday shopping blitz. After covering the initial surge of offline shopping that kicked off with Black Friday, additional metrics have emerged around online shopping. That includes trending around digital advertising to drive eCommerce.
For example, Tinuiti reports that advertisers spent 32 percent more than last year on Google Shopping ads between Thanksgiving and Cyber Monday. The corresponding jump in Amazon Sponsored Product ads was 50 percent — reflective of Amazon’s overall growth in ad spend.
As a frame of reference, advertisers spent 25 percent more on text ads such as Google Adwords, compared to the same period last year. Along with that increase, text ad clicks increased by 25 percent while shopping clicks grew 31 percent.
Segmenting the market by size of business, Sidecar separately reports that mid-market advertisers such as retailers increased their spend on Google Shopping. This came with a corresponding dip in spending on text ads, suggesting a zero-sum game for their ad budgets.
Not surprisingly, CPCs followed the same trend, as diminished text ad spending lowered bid pressure and thus CPCs for mid-market advertisers. But average shopping ads CPCs were slightly elevated at $1.12 on average compared with $.99 last year according to Sidecar.
Larger businesses spent 24 percent more on Google Shopping year-over-year, and 96 percent more on text ads. Compared to smaller and mid-market advertisers, this across-the-board lift for larger advertisers reflects less budgetary constraints drive eCommerce.
The growth in Shopping spend aligns with other trends we’re tracking. For example, some of the above stems from Amazon’s continued work to ratchet up the competition for customer acquisition and eCommerce conversions, including sponsored ads on Amazon itself.
Panning back, offline spending eclipses eCommerce in sheer dollars, but the latter is growing as consumers get more comfortable ordering a range of products online. eCommerce is growing 13.3 percent YoY according to the U.S. Census Bureau versus 3.2 percent for retail overall.
So while brick & mortar spending is much greater, at about $4.9 trillion in the U.S., eCommerce is growing at a much faster pace and could have a brighter future. This holds key strategic implications for the SMB sector, and the growing importance of eCommerce strategies.
This means brick & mortar SMBs that sell consumer goods (or vendors that serve them) should re-examine eCommerce. There are increasingly accessible functions in the SMB Saas world for managing eCommerce. That starts with tools like Shopify but continues to branch out.
And it clearly has implications for the associated ad spend to drive consumers to eCommerce outcomes, per the above. We’ll keep tracking this moving target for strategic implications.