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PLA Spend Nearly Doubled, Global Paid Search Spend Up in 2013 Holiday Season

  |  December 19, 2013   |  Comments

The 2013 Global Online Retail Seasonal Shopping Report by Kenshoo reveals that mobile devices and product listing ads play an important role in driving revenues and paid search metrics during the holiday season.

The 2013 holiday season saw record-high increases in clicks, impressions and revenues. A big part of this growth was driven by mobile devices and product listing ads (PLA), according to 2013 Global Online Retail Seasonal Shopping Report by Kenshoo.

Global Increases in Spend, CTR and Revenues

Retailers prepared early this year for the shopping season, due to there being six fewer days between Thanksgiving and Christmas. This led to a 34 percent year-over-year (YoY) increase in paid search spend, the report says.

The heightened investment in paid search enabled retail advertisers to achieve 26.9 percent YoY growth in clicks, as well as a 12.8 percent YoY increase in CTR. As a result, online shopping revenues were up 19 percent from last year.

A deeper look at specific regions reveals that U.S. marketers allocated 48.1 percent more in paid search spend in 2013 than last year. They were also able to spend more efficiently this year, with a 14.1 percent increase in CTR.

As expected, U.S. paid search retailers reaped the benefits of the uptick in paid search spend, as revenues during shopping season reached a record high, up 37 percent from 2012.

Tablets Gain Momentum in Paid Search Ad

In 2013, paid search marketers allocated 34.4 percent of total spend to mobile devices, a 66.7 increase YoY.

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Mobile devices also drove 36.7 percent of all global paid search clicks in the 2013 shopping season, up 32.1 percent from 2012. At 16.3 percent of total clicks, tablets became the biggest driver, 8.7 percent more than last year. In comparison, Phone clicks jumped 7.5 percent YoY to 20.4 percent of total clicks.

Tablets also saw a doubling in revenues, up from 7.8 percent of total revenues in 2012 to 18.9 percent in 2013. With almost one-fifth of total revenues coming from tablets, this shopping season marks a major turning point in the importance of this device for retailers and consumers, the report says.

Nevertheless, 77 percent of total revenues still came from desktop computers this year.

Product Listings Ads (PLA) Experienced Enormous Growth

Retailers were more adept at using PLAs and nearly doubled their spend on this ad format in 2013. Click-through rates on PLAs reached an average of 3.3 percent, up 30 percent from last year. The increased efficiency enabled businesses to generate 115.6 percent more clicks from only 65.4 percent more impressions YoY, according to the report.

PLAs performed better than traditional paid search ad metrics, with CTR 26.7 percent higher while the average cost per click was 15.3 percent less.

Meanwhile, total global revenues from PLAs increased 417.4 percent YoY, translating to nearly a nine to one ($8.62) return for this investment.

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Kenshoo also provided advertiser suggestions in this report, including:

  • Anticipate consumer shopping behavior and react to market activity
  • Capitalize on the PLA opportunity
  • Embrace the mobile shift and establish a cross-device strategy
  • Don't be afraid to go big during the peak shopping season

Kenshoo analyzed data from its clients (advertisers and agencies), who conducted paid search programs for retailers from November 1, 2012 through December 9, 2013. Download the full report from Kenshoo.

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ABOUT THE AUTHOR

Yuyu Chen

Yuyu Chen is a junior reporter at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.

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