Search spending and sales volume will grow, offsetting declines in average order value; mobile and last minute searchers present cost effective opportunities
Performics today projected holiday retail sales from paid search will grow by 15 percent in 2010 for actively managed campaigns. Along with weekly analysis, Performics will closely monitor the growing importance of the last week of free standard shipping prior to Christmas and its impact on the traditionally busy “Cyber Stretch” period, an eleven day period that begins the Wednesday before Thanksgiving and ends the Saturday after Black Friday.
A few trends and past performance analyses that contributed to this growth prediction include:
- Great holiday success in 2009: Actively managed holiday paid search campaigns spent 25.7 percent more in 2009 and reaped 24.0 percent more in sales year-over-year (YoY)
- Decreasing average order value (AOV): Year-to-date (YTD) AOV is down 9 percent
- The growing popularity of delayed shopping to capitalize on free shipping: Sales during the last week of free standard shipping prior to Christmas increased significantly in 2009
- Increased efficiency of last minute shopping: After the last week of free standard shipping prior to Christmas in 2009, spending and CPCs dropped dramatically; active paid search advertisers can do more for less after December 17
“Performics’ holiday retail client group detailed findings that can help retailers significantly boost results this holiday season, just by making a few fundamental changes to their search management practices,” said Daina Middleton, CEO of Performics. “In mobile search, for example, we’re emphatically recommending that clients design standalone search campaigns specifically to target mobile devices instead of extending their standard paid search campaigns into the mobile arena. Performics’ clients who’ve already made this change have seen costs per click drop by 60 percent on average with click through rates more than doubling.”
Performics recommends paid search holiday advertisers:
- Follow best practices to actively mange campaigns and effectively respond to market forces
- Establish standalone mobile search campaigns to boost efficiencies in the emerging channel
- Offer aggressive promotions to capture early shoppers
- Actively participate in the last week of free standard shipping prior to Christmas
- Continue active management beyond December 17 to further boost efficiency
Performics will release ongoing updates to its holiday paid search forecasts on its blog throughout the holiday season.