‘Tis the Season: Cyber Monday Increase in Media Spend Fuels Increase in Sales

eCommerce sales generated from paid search saw healthy gains for PM Digital retail clients on Cyber Monday, consistent with what we experienced last week on Black Friday.  Yesterday, PM Digital clients spent 58% more this year vs. last, yielding a 30% lift in sales. Part of the spend increase funded media costs that were 16% higher and resulted in 36% more clicks YOY.  The increased media cost was much higher yesterday than Black Friday’s +5% increase, which illustrates how consistently competitive Cyber Monday becomes each year with a flood of new advertisers entering the auction and elevated bids for those already there.

Most retailers have seen paid search costs rise steadily over the past year, which is partially due to the July rollout of Enhanced Campaigns and also to channel shift within paid search.  For example, Product Listing Ads (PLAs) used to be free when they were Google Product Search.  Now that they are paid and have much better positioning on the search engine result page, retailers are investing more and more in the image-friendly ads.  Paid search for Trademark ads, non-brand ads, and PLAs all have different costs, so when budget shifts from one type of ad unit to another, YOY cost per click comps will likely change.

A few other notable KPIs from this year’s Cyber Monday include a flat conversion rate vs. last year and a YOY lift of impressions by 9%.  Impression gain is interesting insofar as having visibility to organic growth in the paid search channel.  The impression lift was even greater on Black Friday (+18%) showing how important the traditional retail shopping day has become to online. That said, YOY conversion rate was much lower on Black Friday than Cyber Monday (-10%) which indicates a heightened level of showrooming in retail locations, with a lot of researching – but not as much purchasing – being done on smartphones.  Lastly, Cyber Monday’s average order value fell by 3.5% which is consistent with NRF reports of lower weekend spends, per person, at brick and mortar retail locations.  We saw a similar decline in AOV on Black Friday, as well.

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