Strong Q4 Ad Spend Signals Strong Holiday Sales in the Cards for Retailers
Ad spend rose significantly in the fourth quarter, according to IgnitionOne. This signals strong holiday sales for retailers.
According to IgnitionOne’s mid-Q4 2011 “U.S. Holiday Shopping Report,” in the first half of the fourth quarter, multi-channels retailers boosted their paid search spend by 31 percent year-over-year across all major search engines (Google and Yahoo/Bing). This reflects slowed growth when compared to the 37 percent year-over-year increase observed in the first half of the fourth quarter in 2010.
IgnitionOne notes that while the media is focused on decreased consumer confidence, this report’s findings show positive consumer behavior and growing spending online. The report notes that the number of transactions has increased 120 percent, while revenue has increased 52 percent ahead of the peak holiday shopping season.
Meanwhile, revenue per click rose 5.5 percent, “which points to the ability to monetize advertising at increasing rates.” Conversion rates for search ads increased 52 percent, which outshines last year’s growth of 29 percent.
Display spending by retailers rose by 27 percent compared with the first half of the fourth quarter last year, according to IgnitionOne.
The report also notes that paid search clicks on mobile rose 355 percent, while mobile ad spend on Google alone is up 288 percent year-over-year. “This matches with the current trends in mainstreaming of tablets and the increasing ease of use for smartphones,” the company said in the report. “We expect this growth in mobile ads to continue.”
Based on the strong growth in ad spend and increase in transactions and conversions, IgnitionOne predicts a strong holiday retail season for online marketers.
“With the incredible growth of mobile search ads over the past year, it is clear that search advertising on mobile devices and tablets is now a critical part of any retailer’s online strategy. In addition, display advertising is becoming an increasingly important tactic for promotions and driving qualified website traffic.”
The shopping report tracked more than 5 billion impressions and 75 million clicks on Google and Yahoo/Bing search networks, Google AdEx and other display networks from Oct. 1, 2010, to Nov. 13, 2011, across IgnitionOne’s retail clients.
According to a separate report from comScore, Black Friday saw $816 million in online sales, which makes it the heaviest online spending day to date in 2011. It also reflects a 26 percent increase from the $648 million spent on Black Friday last year.
Sources:
http://www.ignitionone.com/en/news/green-black-friday-retailers-ad-spending-says-yes
