Study reveals the top holiday retail advertiser
Retailers are stepping up their small screen advertising investments this holiday season.
Between Oct. 30 and Nov. 16, retailers spent $353 million on national television ads for the holiday season, up from $323 million during the same time period in 2016, according to Kantar Media. Walmart has been the top retail advertiser during this time period, spending $51 million on national TV ads.
Target ranked second at $42 million. It was followed by Best Buy ($19 million), Kohl’s ($17 million) and J.C. Penney ($17 million).
In 2016, retailers spent $3.2 billion on holiday advertising across all channels, including TV, magazine, newspaper, radio, Internet display, online video, mobile web, mobile app, cinema and outdoor. Spending also appears to be in line with previous years, according to the data.
Additionally, retailers averaged $357.6 million and $346.9 million in weekly spending across all media channels in 2016 and 2015, respectively.
The key weeks for both years were those leading up to and encompassing Black Friday. Weekly retail ad spend in 2016 peaked at $488.4 million the week of Nov. 28 (Black Friday was Nov. 25). Similarly, spending hit its highest mark, $550.6 million, the week of Nov. 30, 2015 (Black Friday was Nov. 27), the data revealed.
The top search ad options that drive conversion rates are…
Word choice, branding and dynamic keyword insertion all impact the performance of search ads — some more than others.
Retailers that understand the best copy to use in their search ads can gain insight into the nuances of consumer behavior as it relates to search, according to a new study from NetElixir. The report examined over 60,000 Google AdWords Expanded Text Ads that appeared between February and September 2017. Performance was measured across nine verticals by click-through rate (CTR) and conversion rate (CVR). The data set was comprised of more than 100 NetElixir retail clients.
According to the data, stricter character limits are making search marketers more cognizant of the words they use in their search ads. The top search ad word choices are driving click throughs are:
• “Shop” vs “Buy” – “Shop now!” was the winner with a CTR of 2.55% vs. a CTR of 1.64% for “Buy now!” “Show now” also had a higher conversion rate (4.46%) vs 3.31% for “Buy Now!” These results indicate that customers are shopping around and researching products online when searching. Interestingly, “Buy now!” was dominant in the food category, which NetElixir explains as related to preferences people have when purchasing food items online.
• “Fast Shipping” vs “Free Shipping” – “Free shipping” was the winner with a CTR of 1.8% vs. “fast shipping,” which had a 1.03% click-through rate. Conversely, “fast shipping” had a much higher conversion rate (14.49%) than “free shipping,” which only averaged 2.6% for CVR.
• “High quality” vs “wide variety” – “High quality” was the winner with an average CTR of 1.58% vs. “wide variety,” which averaged 71%. Conversion rates were also higher for “high quality,” averaging 3.76% while “wide variety” averaged only 2.95%.
• “Now” vs “Today” – “Now” was the click-through rate winner with 1.95% vs “today,” which averaged .98%. But “today” scored higher for conversions with a CVR rate of 9.05% compared to 4.38% for “now.”
Branding is also impacting search ads. The study compared branded copy was compared to unbranded copy, as well as the use of trademark symbols. The result: branding has a positive impact on ad performance.
For example, search ad copy containing business names, or branding, averaged 6% for CTR and 7.8% for CVR. Ad copy without business names had an average CTR of 1.38% and CVR of 4.11%.
Meanwhile, trademark symbols also positively impacted ad performance. Ads with trademark symbols had 4.3% CTR compared to just 1.6% for those without the symbols.
Another variable tested was the impact of dynamic keyword insertion (DKI), or an advanced feature in AdWords that dynamically changes the ad text to match the search query of the user. Surprisingly, non-DKI ads scored higher for CTR with an average rate of 2%, while DKI-enabled ads had a lower CTR rate of 1.45%. The only vertical to not follow the trend was food, which saw much higher CTR rates for DKI-enabled ads.
“Our study yielded interesting results, especially as we compared performance across various verticals. For example, we found that the food category deviated heavily from the rest, which suggests that consumers are shopping for food products differently online than they do for other products,” said Udayan Bose, CEO, NetElixir. “As e-commerce behavior continues its shift to mobile devices and expand to newer platforms like voice-enabled assistants, we can expect behaviors to continue to evolve and adapt accordingly.”
Canadian retail conglomerate steps up analytics commitment
The Loblaw Cos. is banking on a new centralized portal to reshape the way it makes business decisions.
The Canadian retail conglomerate will create a single access retail analytics portal that will deliver customer, marketing and merchandising insights for users across its grocery and pharmacy retail divisions. The new portal is set to launch in 2018.
This new portal, from consulting and analytics firm Precima, a division within Alliance Data, will provide data to support merchandising and marketing strategy development, promotional effectiveness, assortment decisions, supplier collaboration, and consulting across the company’s retail network.
The project is an expansion of Loblaw’s relationship with Precima, a partnership that kicked off in 2014.
“Loblaw is committed to leveraging best-in-class analytic tools to drive our business forward,” says Jim Noteboom, senior VP, loyalty and consumer insights, Loblaw Companies Limited. “This new portal will provide greater access to data, enabling us to offer the product assortment and services our customers are looking for, ensuring a better shopping experience.”