In its fourth annual study on the retail industry's performance in Google Ads, Sidecar recommends that e-commerce retailers rethink their strategies and find the white space. The company published the research in its 2020 Benchmarks Report: Google Ads in Retail, a comprehensive study on the retail sector’s performance in Google Ads.
Sidecar’s findings indicate key lessons for retailers to consider throughout 2020, especially amid the fluid environment created by the COVID-19 outbreak. 2019 was more competitive than ever, yet retailers were able to successfully maintain revenue by adapting to the climate, focusing on their audience strategy, and prioritizing incremental growth, as opposed to massive increases. That muscle to adapt is the key for keeping businesses moving and supporting consumers throughout this period of volatility.
Mike Farrell, Senior Director of Integrated Digital Strategy at Sidecar
Key Factors of Retail Google Ad Performance:
Sidecar uncovered the following factors that impacted retailer performance in 2019:
- Budget shifts – Retailers realigned Google Ads spend in 2019, prioritizing low-funnel activity on Google Shopping and retooling their paid search campaigns for cost savings.
- Priority on efficiency – Retailers emphasized efficiency in paid search, in part by investing in less costly mobile ads, leading to similar revenue acquisition year over year.
- Competition from Amazon – This competition lowered Google Shopping conversion rates across devices, forcing retailers to uptick spend to maintain revenue growth.
- Emphasis on audience strategy – Retailers increased their focus on more granular audience targeting to better map Google Ads to all stages of the purchase funnel.
- Unwavering attention on Google – Retailers maintained revenue from the longstanding Google Ads platform, and are seeking additional gains through newer ad platforms, such as Amazon and Pinterest.
Looking ahead, Google is certain to continue shaping its Google Ads platform to compete with growing and competitive marketing platforms such as Facebook, Instagram, and Amazon.
Key Findings of the Retail Google Ads Benchmarks:
- Retailers rose to the competitive challenge. Retailers grew more efficient in paid search, saving 8% on costs year over year, while driving similar revenue. Retailers were able to tick up Google Shopping revenue by 7% with a commensurate 7% increase in spend.
- Retailer ad spend shifted. Google Shopping made up 80% of retailers’ budgets between these two channels, as it plays a growing role in converting bottom-funnel buyers. While paid search comprised the remaining 20% of spend, retailers are approaching these ads with greater granularity to efficiently attract shoppers at the top of the funnel.
- Amazon’s Google Shopping impression share topped 60% for the B2B, house & home, and mass merchant verticals in Q3 2019. Amazon’s impression share declined slightly in Q4, letting retailers win back some exposure during a critical time of the year.
- Amazon’s impression share moved slightly in paid search in 2019, hovering around 40% or lower for all retailers analyzed. Retailers in the health & beauty and house & home verticals saw Amazon’s impression share decline by approximately 7 to 8 percentage points in their segments over 2019. These findings show that paid search can be a valuable tool for retailers to cope with Amazon and other competitors’ presence on the paid SERP.
- Prime Day offers retailers new opportunities on Google Ads. Year-over-year growth was witnessed in impressions and revenue across devices during the full week of Prime Day on Google Shopping. For shopping ads on mobile, there was year-over-year growth across key KPIs (4% for orders, 6% for clicks, and 13% for revenue). Additionally, paid search mobile ads saw significant gains with increases of 25% in orders and 28% in revenue year over year.
Access the full report and you can get KPIs for your specific retail vertical, including major trends impacting the retail landscape along with Sidecar's recommendations.
Sidecar offers performance marketing excellence to retailers and brands. Sidecar’s advanced technology and proprietary data, combined with years of performance marketing expertise, help its customers unlock the full potential of today’s most powerful search, shopping, social, and marketplace channels.