• by Aaron Goldman , Op-Ed Contributor, November 28, 2012

I’ve just been served a hearty portion of paid search data from Thanksgiving weekend and Cyber Monday, as my company looks to benchmark U.S. retail industry performance. Before the food coma (aka data paralysis) sets in, I thought I’d share some of the early observations.

1. Thanksgiving Day is game on. No, I’m not referring to American football. Although that game was on in our house, we were too busy shopping online to notice. And it seems we weren’t the only ones. On Thanksgiving Day, sales revenue from search marketing soared 65% year-over-year (YoY), driven by just a 10% increase in search ad spend. Turkey day also saw the highest YoY increase in average order value, up 19%, as consumers loaded up their carts in single swoops.

2. Black Friday packs an in-store punch. As this video from a Walmart in Georgia shows, shoppers got off their couches on Black Friday to do some good old-fashioned bargain hunting, er, brawling. Indeed, Black Friday appears to be more of an in-store phenomenon, showing lower YoY online revenue growth compared to other key days but still delivering a healthy increase of 24%. This trend, along with the previous one, can potentially be attributed to the newer practice by many retailers of starting their Black Friday sales online during Thanksgiving Day.

3. Cyber Monday brings out cyborg marketing. Consumers came back to work on Monday ready for action, and marketers had technology automation in place to capture the increased demand. Cyber Monday delivered huge YoY increases in paid search impressions (66%) and clicks (57%), as consumers actively searched and clicked. Meanwhile, marketers capitalized, driving a 52% increase in conversions and 44% lift in revenue (note: both numbers expected to rise further after latent conversion data rolls in), based on a 51% increase in spend. Here, average order value was down 5% YoY as consumers did more shopping around, taking advantage of free shipping offers to get just what they wanted from each merchant, rather than loading up through a mass retailer.

4. Paid search presents a present opportunity.  For search marketers, there’s no time like the present. And there’s no better present than increased holiday season return on ad spend. Overall, for the period starting Nov. 1 and ending Nov. 26, retail search marketers generated roughly $6 for every $1 spent on paid search. That equates to an 11% increase YoY in return on ad spend, as online sales revenue grew at a faster pace (42%) than ad budgets (28%). Google Product Listings Ads (PLAs) continue to perform well, and the Yahoo Bing Network (YBN) continues to deliver quality inventory and conversions. The key for retailers is to leverage advanced technology tools that can manage PLA and text search ads holistically from feeds of up-to-date inventory and promotions. From there, deploying sophisticated portfolio algorithms can yield optimal results by running thousands of models on each keyword to determine marginal ROAS and set proper bids. 

Chef’s Notes

As you chew on these numbers, take a moment to review the ingredients:

The data reflects a representative cross-section of our clients (advertisers and agencies) managing paid search programs for the retail vertical in the United States with active campaigns tracking impressions, clicks, conversions and revenue over the 12+ month period from Nov. 1, 2011 through Nov. 26, 2012. This index includes all major retail categories such as, but not limited to, electronics, books, apparel, appliances, shoes, sporting goods and more. All data is accurate as of Nov. 27, 2012, but subject to change as delayed conversions are added in subsequent days.