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 San Francisco August 10-12: Revolutionize your digital marketing campaigns at ClickZ Live San Francisco! Educating marketers for over 15 years, our action-packed, educationally-focused agenda covers every aspect of digital marketing. Early Bird rates available through Friday, July 17 - save up to $300! 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

Featured White Papers

US Consumer Device Preference Report

US Consumer Device Preference Report
Traditionally desktops have shown to convert better than mobile devices however, 2015 might be a tipping point for mobile conversions! Download this report to find why mobile users are more important then ever.

E-Commerce Customer Lifecycle

E-Commerce Customer Lifecycle
Have you ever wondered what factors influence online spending or why shoppers abandon their cart? This data-rich infogram offers actionable insight into creating a more seamless online shopping experience across the multiple devices consumers are using.

WEBINARS

Jobs

  • Sr. Marketing Specialist, PPC
    Sr. Marketing Specialist, PPC (Charter Communications) - StamfordSr. Marketing Specialist, PPC– Digital Marketing Charter Communications...
  • Online Marketing Analyst
    Online Marketing Analyst (FULLBEAUTY Brands ) - New YorkINTRODUCTION: Are you interested in a unique career opportunity where you can represent...
  • Copy Editor
    Copy Editor (ClickZ / Search Engine Watch) - New YorkROLE OVERVIEW The role of the copy editor for ClickZ has many demands. Ultimately, the copy...