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The 2018 Thanksgiving and Black Friday Results Are In: High Cost and High Reward for Search, Social, and Ecommerce Advertisers

Chris "Coz" Costello, Senior Director of Marketing Research @ Kenshoo

November  27, 2018

With direct integrations that include Google, Amazon, Facebook, Instagram, Bing, Pinterest, Snapchat, Oath, and others, Kenshoo’s advertising performance dataset spans over 3,000 advertiser and agency accounts across 20 vertical industries and over 60 countries. In this post, Kenshoo’s Senior Director of Marketing Research, Chris ‘Coz’ Costello, dives into two of the biggest U.S. shopping days of the year: Thanksgiving and Black Friday

This year, the prime holiday shopping season is going to be stretched to its maximum length with 32 days between Thanksgiving and Christmas. This means that consumers will really be able to take advantage of all of the deals and steals that this time of year has to offer.

Last year, Thanksgiving and Black Friday accounted for 37% of total spending what is now being dubbed The Cyber Five, which are the five days between Thanksgiving and Cyber Monday.

2017 thanksgiving black friday ad spend

These two days have historically been huge for online retailers and can be a good first indication of how well the season will shape up.

The following are key trends we saw from last week’s Thanksgiving and Black Friday shopping days that provide strong evidence that 2018’s online holiday shopping season will end up being as big as the experts predict.

Marketers follow through on their plans to increase spending on major platforms

As we reported in our recent Digital Advertising Trends for the 2018 Holiday Season white paper, a majority of marketers planned to increase their spend across the major ad players including Google, Facebook, Instagram, and Amazon.

2018 holiday plans

So how did Kenshoo clients spend versus our pre-holiday survey? So far, out of all advertisers who spent on the respective channels in both 2017 and 2018, 58% of Kenshoo clients increased their spend on Thanksgiving and Black Friday in Search and Social, and a whopping 78% of clients increased their Ecommerce channel ad spending this year.

This increase in holiday spending with the biggest publishers is no surprise. More money has been flowing to these publishers for some time now as they offer arguably the richest consumer datasets to surgically target ads across audiences. These ad platforms also offer the large inventory that marketers need during the holiday season, replacing complex portfolios of smaller publishers required for mass reach.

Search marketers: return outpaces spend for a happy holiday

Ecommerce search advertisers increased spend across Thanksgiving—up 20% year-over-year (YoY)—and Black Friday (up 16% YoY) in 2018. This is a bit of a reversal from 2017 when Black Friday was the bigger growth day than Thanksgiving.

Compared to last year, search cost-per-click (CPCs) dropped during these two giant shopping days with the average price of a click decreasing 8% YoY on Thanksgiving and 10% YoY on Black Friday. This is consistent with what we saw in the Kenshoo Q3 2018 Quarterly Trends Report where we reported an overall CPC decline in search advertising of 15% YoY from Q3 2017, a trend driven largely by the growth of lower-priced mobile shopping ads.

2018 CPC search trends

Even though CPCs declined YoY during these key days, search click prices increased from $0.27 during the three week ramp-up period of November 1-21 to $0.41 on Thanksgiving and $0.50 on Black Friday. This reflects the increased value marketers put on shoppers with higher levels of purchase intent, which was justified by increases in conversion rate over the same time frame (4%, 5.6%, and 8.3%, respectively). We can also say with high certainty that advertiser ROI not only held firm in light of these market-inflated prices but even improved on Black Friday compared to early November.

2018 paid search holiday metrics

Leading the charge into the holidays, once again, has been mobile search, and specifically, mobile shopping campaigns. Year-over-year spending on these ads grew by 44% and 43% for Thanksgiving and Black Friday, respectively, outpacing all other combinations of device and campaign type. Desktop keywords, on the other hand, received decreased investment compared to last year.

2018 spending growth

Social engagement is at the heart of the holidays

Ecommerce social advertisers continued investing heavily at the outset of the holiday shopping season with 32% YoY spending increases for both Thanksgiving and Black Friday. A YoY increase in cost per thousand impressions (CPM) of 32% across both days was the primary driver of those spending increases, accelerating from a YoY CPM increase of just 22% during the pre-Thanksgiving ramp-up period.

As the 2018 shopping season has progressed and purchase intent (along with the price of an impression) began to rise, consumers have responded by showing greater willingness to interact with these social ads from Ecommerce advertisers, and the engagement (website clicks, likes, shares, and other interactions) rate with these ads grew from 2.7% in the first three weeks of November to 2.9% on Thanksgiving and 3.1% on Black Friday.

2018 paid social holiday metrics

Looking again at the overall YoY growth for Thanksgiving and Black Friday, two specific types of ads have played big roles. Dynamic Ads for Products have provided advertisers with a specialized, direct response-focused ad that has resonated with consumers, while Video ads continue to grow in prominence outside of branding campaigns. Each of these ad types outpaced overall social growth, and account for the lion’s share, if not all, of the increased spending in the channel compared to last year.

search holiday spending growth

Amazon sparkles as ecommerce shines at the top of the tree

Ecommerce channel ads saw an incredible lift with a 3X increase in average daily sales on Black Friday. Already the third biggest digital ad platform in the world, Amazon is a true no-brainer for retail marketers throughout the year and even more critical during the holiday shopping season.

In our Q3 2018 Quarterly Trend Report, we showed Ecommerce advertising—largely driven by Amazon—tripled in marketer spend in the 7-month span between January and July of this year, giving us confidence Q4 would also show tremendous growth.

2018 ecommerce spending

This year’s Black Friday produced 3X the average daily spend during the pre-holiday advertising month of October. Advertisers spent 134% (or 2.1X) more on Black Friday than the average daily spend in the three-week holiday ramp-up period (November 1 – 21) prior to Thanksgiving.

The investment paid off: Black Friday sales increased 348% versus an average day in October, and 229% versus the holiday ramp-up period in November. Because the advertising return outpaced spend this year, ROI jumped by 55% while cost-per-acquisition (CPA) dropped 16% compared to October;  ROI increased 41% and CPA decreased 14% compared to November 1-21.

With Thanksgiving and Black Friday kicking off the most critical dates of the shopping season, Amazon advertisers are expected to continue on their record-setting pace.

Another Thanksgiving and Black Friday in the books! Check back here at the Kenshoo Blog on Wednesday to read the full 2018 Cyber 5 wrap-up.

Research Methodology
The year-over-year analysis is based on advertisers with ad spending in a particular channel on the Kenshoo platform during both the 2017 and 2018 holiday seasons and can be considered “same advertiser” analysis. The 2018-specific analysis uses all Kenshoo advertisers in the Ecommerce vertical or using Kenshoo’s Ecommerce platform. Some outliers may be removed. Average daily metrics are calculated by taking the sum of all activity in the period across all advertisers divided by the number of days in that period.

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Tags: 2018 Holiday Season, amazon, bing, ecommerce, Facebook, Google, instagram, Kenshoo Marketing Research, Oath, pinterest, Retail, snapchat, xTLx
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Host(s) kenshoo.com
Cookie Name trd_utmcampaign, trd_utmsource
Cookie Expiry 1 year

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