Retailers Spent 58% More on Paid Search this Holiday vs. Last, Driving 53% More Clicks

Posted by Ryan Hornacek, Analyst, Strategy & Analytics

The biggest paid search story of holiday 2011 was that Performics’ aggregate group of retailer clients made early-season investments that led to incremental clicks throughout the entire season.  Every holiday, we see retailers increasing paid search spend earlier and earlier.  Early investments allowed our retailers to level off spend later in the season, but maintain large YoY click increases during the critical holiday weeks.  This was most apparent in the final week before the ground shipping cutoffs (Week 11 on the below chart), where clicks were up 52% YoY but spend was only up 26%.  The effect of early investment also showed in CPCs during the three critical weeks following Thanksgiving (Weeks 9, 10 and 11 on the below chart).  CPCs during this time period were consistently lower than last year (a 3-week average YoY decline of 10%).

In total, Performics’ retailer clients spent 58% more on paid search in Q4 2011 vs. Q4 2010, driving 53% more clicks YoY.  Despite the large increase in spend, CPCs finished the quarter just 5% higher.

We closed out the year with a post-Christmas uptick in clicks as a result of increased spend.  Clicks were up 51% in the week following Christmas (Week 13 on the below chart), while spend was up 64% YoY.  The last-minute spending push caused a slight bump in CPCs, which were up 8% for the week.  However, in the final days of the year, CPCs finally fell back to their pre-Thanksgiving levels.

Year-end benchmark chart

The below graphs show paid search spend, clicks and CPCs for the entire 2011 holiday season vs. 2010:


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