Chris "Coz" Costello, Senior Director of Marketing Research @ Kenshoo
The five-day period from Thanksgiving through Cyber Monday is now being referred to as “Cyber Five,” which ends up being a nice, consistent lens through which we can view the holiday performance of digital marketing. It has three of the biggest shopping days of the season, it doesn’t have a variable length of time from year to year, and it has the word “cyber” in it, so you know it’s a big deal.
This is not to be confused with the “Cylon Final Five,” which I won’t explain in case you still want to binge-watch the remake of Battlestar Galactica. I’ve probably already said too much.
What follows below is a deep dive into what happened over the five days that define the holiday shopping season.
Unless otherwise noted, all results are based on global e-Commerce/Retail industry advertisers who had ad spend in both 2015 and 2016 between November 1 and December 25.
Same-store search spend for this period (with a few outliers removed) increased 35% over the same period last year, and advertiser sales increased 43%. If you do the math, that means that search ROI increased by 5% as well.
Cyber Monday is still the biggest spending day of the weekend, but not by much. Thanksgiving and Black Friday showed the biggest YoY spending growth for search (+41% and +49%, respectively). Last year, Cyber Monday captured 27% of the total search spend to Black Friday’s 23%, this year, that gap narrowed to 26% for Black Friday and 25% for Cyber Monday.
Two possible reasons for this shift come to mind.
First, it could be that advertisers are seeing the value of reaching idle consumers on their couches after the big Thanksgiving meal, along with those who don’t want to brave brick-and-mortar stores on Black Friday.
Second, it could be that Cyber Monday–which was born out of bad data analysis in the first place, but that’s a rant for another time–has maxed out, and advertisers pretty much have to look elsewhere.
As we have come to expect from search marketing, mobile growth continues to be a dominant factor in the story. Mobile spend increased 81% YoY, while desktop increased 21% over the five-day period. Mobile sales for e-Commerce advertisers grew 105%, while desktop grew 39% over last year. So while desktop search had a respectable showing, mobile is still the headline.
Is mobile now the majority of search volume? For impressions (51%) and clicks (56%), the answer is yes. As a percentage of total spend, mobile grew from 33% last year to 44% this year, which narrows the gap with desktop to just 2%.
As for where customers are actually spending their money after clicking on search ads, mobile continues to grow, accounting for 30% of advertiser sales this year, compared to just 22% last year. Desktop continues to have a larger share of those search-driven consumer dollars, although that share has declined from 65% to 59%.
What about the price of a search click versus last year? If we break it down by device, both desktop and mobile cost-per-click (CPC) are up slightly over last year. However, with the bigger increase in the volume of the lower-priced mobile clicks, overall CPC actually remained the same as last year. This seems counter-intuitive, but it’s really just math.
Search Shopping Campaign spend increased 86% over last year, with keyword ads increasing only 20%. Product Listing Ads now make up 31% of Cyber Five ad spend, compared to just 22% last year. Sales from these ad types increased 127% YoY, and now make up 24% of all consumer dollars spent via search ads for the period, up from 15% last year.
Cost-per-click for these ads increased 7% YoY, from $0.50 to $0.54, but advertisers got their money’s worth, as both conversion rates and average order sizes also went up compared to last year. This boosted the ROI of Product Listing Ads and continuing to demonstrate the effectiveness of this specialized ad type.
For Social e-commerce advertisers, same-store ad spend increased 63%. Impressions increased 74% and clicks increased 138%. The biggest driver of this jump in clicks (and subsequently, click-through rate) is the Dynamic Product Ad type, which we knew was going to be a much bigger deal this year than last year, when they were brand new.
The 2015 holiday season for social marketers followed on the heels of Facebook’s introduction of the Dynamic Product Ad (DPA), which is similar to Product Listing Ads on the search side in that it can plug directly into product data feeds in order to create unique ads across an advertiser’s entire product offering.
Needless to say, advertisers have been receptive to this new ad type and even more so during the holidays. Spending on DPAs tripled for e-Commerce advertisers over the “Cyber 5” time period, and jumped from 16% of total spend last year to 32% of total spend this year. Clicks, however, quadrupled, and actually made up the majority (60%) of e-Commerce social clicks over those five days in 2016, up from 35% last year.
Why the bigger jump in clicks? DPAs represent Facebook’s biggest effort to design ads specifically for direct response. And holiday shoppers are clearly responding. Directly, even.
This high level of engagement creates an interesting situation when it comes to DPA pricing. On a CPM basis, Dynamic Product Ads are actually more expensive than other social ad types, but because of that higher click-through rate, the cost of a click on one of these ads is actually cheaper. Clicks, of course, are of paramount importance to online retailers, so the relatively lower pricing is likely to make these ads even more attractive to advertisers as they continue to gain traction in the social landscape.
What does the Cyber 5 mean for the rest of the holiday season for retailers? How will this one long weekend affect the big picture for social and search marketers in the fourth quarter? Stay tuned to Kenshoo for more on this in the weeks ahead, have a safe and happy holiday season, and as always, be mindful of Career Limiting Moves (CLM) at your office holiday parties. I’m looking at you. Yes, you.