Paid Search Performance: Election Impact Now & Into Holiday
With the results of the 2016 presidential election now in, there are many new questions lingering on the minds of the American population. Retailers, in particular, are weighing the potential impacts a Trump presidency could have in both the short and the long term. After an initial plunge in the early morning hours of Wednesday, the markets have since stabilized; in fact, the S&P 500 rose 1.1% on Wednesday, when historically, we’ve seen a slight decline the day after an election. As we come into the most crucial time of year for the retail industry, all eyes will be on consumers to see whether the surprise election results depress holiday spending, or alternatively, if folks will be seeking some retail therapy in the increasingly uncertain days ahead.
As we anticipated, election distraction resulted in soft online performance on Election Tuesday and through Wednesday. Though considerable time was likely spent online, shopping wasn’t necessarily on the minds of consumers during the final day of the presidential race. We analyzed paid search performance on Google for PMX clients over 11/8 and 11/9, and topline numbers revealed a 44.4% year-over-year decline in conversion rates and a 46% year-over-year decline in conversions. The downward trend was felt across much of the industry, with Adobe Digital Insights pointing to a 3.7% year-over-year decline in online sales growth on Tuesday, and a 17% decline on Wednesday.
The Daily Breakdown: 11/8 and 11/9
With eyes glued to news coverage on TV and social media throughout Election Tuesday, there was enough distraction to cause a 43% year-over-year decline in CVR, leading to a 40% decline in conversions. Impressions and clicks remained relatively flat over the prior year, however, it’s clear customers were not converting.
While some industry voices predicted an almost immediate upswing in online activity and shopping the day after the election, the return to normalcy unfortunately didn’t come to fruition in the way that we’d hoped. For our retail clients, the more dramatic impact came Wednesday, which saw a 48% year-over-year decline in CVR and 51% decline in conversions.
The feelings of shock across all of America, regardless of party or candidate affiliation, have seemed to elongate consumer distraction. While this may cause the retail industry to experience some preliminary panic, the current state of things isn’t necessarily indicative of what’s to come over the next several weeks leading up to Holiday. With the highly unexpected nature of this year’s presidential election, it’s hard to say exactly what consumer behavior will be. That’s why it’s up to retailers to re-engage their customers to lift holiday spirits and encourage holiday spending. In other words, it’s time to stay calm and shop on people!
What We Recommend From Here
We’re only getting closer to Black Friday and Cyber Monday weekend, which means now isn’t the time to put a pause on holiday marketing. As we mentioned in Monday’s blog, bringing your customers back into the swing of things means reconnecting them to your brand in meaningful ways. Right now, people are likely looking for some sense of stability, transparency, and personal connection – all things that brands can be sensitive to in their holiday marketing messages. Great storytelling experiences, particularly now around the happiest season of the year, can serve as an escape for emotionally drained consumers looking to recharge.
With the considerable decline in CVR over a large portion of this week, getting back in front of customers through remarketing and RLSA tactics is crucial. Consumers may be more tentative to shop over the next couple of weeks, which means personalized reminders can help bring them back onto the shopping track. Search teams should be well in sync with other marketing groups in order to provide consistency across all customer touch points, and to align promotional messaging and creative. Email is also a key part of the buying journey, and will be an important area for holiday remarketing campaigns.
As of October of this year, the NRF predicted average holiday spending per household would be somewhere near $935. But as we’ve learned, particularly over the last week, these projections aren’t set in stone. A more recent survey by Prosper Insights & Analytics revealed that 51% of shoppers would consider spending a little extra this season for a “really good sale or promotion.” To cut through the current distraction, retailers might consider hooking their customers with earlier than planned, or added promotions.
While it has been a tumultuous few months, and even more tumultuous week, all hope is not lost for a successful holiday season. Consider taking a closer look at your current strategy and promotional calendar in order to determine what the best options are for getting your customers back on their shopping game, sooner rather than later.