Recap: Holidays Reveal Longer Online Buying Cycle

  |  January 14, 2005   |  Comments

This holiday season, Internet marketers banked on shoppers searching earlier and buying later.

Internet marketers descended on the 2004 holiday season armed with strategies to target consumers early and keep them buying until the day before Christmas.

Those efforts culminated in a surge of late buying activity that raised overall holiday online retail sales to $15.8 billion, according to comScore. That's a 29 percent increase over the $12.3 billion in purchases recorded in November and December of 2003.

That robust figure, which excludes online travel sales, exceeded comScore's projections of 23-26 percent, based on an unprecedented surge in last-minute online purchases.

According to the researchers, online holiday shopping was on pace to increase 23 percent over 2003 going into the last two full weeks of the year. During the weeks ending December 19 and 26, online sales increased 57 and 53 percent, respectively.

The final surge in buying activity was based partly on the success of last-minute sales offered to consumers online. In-store pick-up offers and local delivery services encouraged shoppers to buy gifts up until December 24.

Other factors contributing to the elongated buying cycle include online retailers' later shipping deadlines; the popularity of online gift-card purchases; and flower and gift baskets, the fastest growing products this holiday season.

Keywords

In many cases, those last-minute incentives were the final salvo in campaigns that began with aggressive keyword search advertising in October.

According to Fathom Online, keyword prices were up an overall 24 percent to $1.70 in Q4, from an average $1.37 in Q3, driven by month-over-month increases of 50 percent in October and 25 percent in November.

Advertisers began decreasing their search ad spend in the second week of December, resulting in an overall 3 percent drop in spending on retail keywords for the month, said Chris Churchill, chief executive of Fathom Online.

Fathom Online Keyword Price Index™
Month Automotive Comsumer-
Retail
Comsumer-
Services
Comsumer-
Travel/Hosp
itality
Finance-
Investing
Finance-
Mortgage
Telecom-
Broadband
Telecom-
Wireless
Avg of
Tracked
Industires
Sept 2004 $1.54 $0.32 $0.54 $0.64 $1.76 $3.17 $1.89 $1.09 $1.37
Oct 2004 $1.39 $0.48 $0.96 $0.85 $1.60 $4.31 $1.78 $1.06 $1.55
Nov 2004 $1.35 $0.60 $1.27 $0.90 $1.70 $4.74 $1.59 $1.09 $1.66
Dec 2004 $1.41 $0.58 $1.36 $0.97 $1.76 $4.79 $1.63 $1.09 $1.70
Sept-Oct % change -10% 50% 78% 33% -9% 36% -6% -3% 13%
Oct-Nov % change -3% 25% 32% 6% 6% 10% -11% 3% 7%
Nov-Dec % change 4% -3% 7% 8% 4% 1% 3% 0% 2%
Source: Fathom Online Corp.

"Retailers begin tapering off their keyword buying starting December 10 because they are facing fulfillment and shipping problems, a lot of business in too short a time," Churchill said. "Similarly, online starts a month earlier because consumers are taking into account the shipping time. So it... is actually a longer buying season for e-tailers than for brick-and-mortars."

Search Engine Ad Efficiency Spikes

Those Internet campaigns' bottom lines were impressive for advertisers.

According to DoubleClick's "Holiday 2004 Shopping Report," the average number of daily ad clicks in December was more than double (144 percent) the Q3 daily client average.

Total gross revenues generated by merchant search marketing programs increased 375 percent above the Q3 average. The average return on investment (revenue/click charges) rose 58 percent compared to the average figure for the Q3.

Conversion rates, meanwhile, increased 124 percent, compared to the average daily conversion rate figures. Total conversions, meanwhile, measured by clicks resulting in purchases or other marketing objectives, increased 446 percent.

ClickZ Live New York What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!

ABOUT THE AUTHOR

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Stats delivers stats headlines to your inbox twice a week. Subscribe today!

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

    Information currently unavailable

Jobs

    • Lead Generation Specialist
      Lead Generation Specialist (The Oxford Club) - BaltimoreThe Oxford Club is seeking a talented writer/marketer to join our growing email lead-generation...
    • Health Marketing Editor
      Health Marketing Editor (Agora Inc.) - BaltimoreCome flex your intellectual muscle as part of Agora, Inc’s (http://agora-inc.com/) legal team...
    • Technical Business Analyst
      Technical Business Analyst (OmniVista Health) - BaltimoreOmniVista Health is looking to add a Technical Business Analyst to our expanding team...