Online Ad Spending Increases as Holidays Approach
In the race to get shoppers into their stores this holiday season, retailers have doubled their online advertising buys since July, according to Internet advertising measurement firm AdRelevance.
In the race to get shoppers into their stores this holiday season, retailers have doubled their online advertising buys since July, according to Internet advertising measurement firm AdRelevance.
In the race to get shoppers into their stores this holiday season, retailers have doubled their online advertising buys since July, according to Internet advertising measurement firm AdRelevance.
In its report “‘Tis the Long and Busy Season for Online Advertisers,” AdRelevance found that total online retail ad spending increased by a combined average of 100 percent during the period beginning July 5 and ending the week of Nov. 8, 1999. The largest share increases were made by drug and toiletry vendors, auction houses, and toy and collectable vendors (see Table).
The number of retailers advertising online grew from 236 to 473 during the period, representing a more than 100 percent increase. On average, retail ad campaigns increased by 73 percent moving from 695,000 impressions in July to 1.2 million in November. The top four retail spenders by category were department stores, at 33 percent of total impressions, auction houses (16 percent), and drug and toiletry vendors (9 percent each). See Table.
Auction sites eBay, Ubid, and Yahoo significantly increased online ad activity from the week of Aug. 9 to the week of Nov. 8, according to the report, but Amazon.com went from the most visible auction advertiser, with 40 million impressions during August, to only 3 million impressions in November. See Table.
The ever-popular toy companies, led by ToyTime.com, Toys R Us, and eToys, focused on the adult market by offering a range of purchasing incentives such as free shipping, buy-one-toy-get-the-second-free, 20 percent discounts, and car giveaways.
“It’s no secret that the e-tail sector is growing at torrid rates,” said Charlie Buchwalter, vice president of media research at AdRelevance. “In fact, our numbers show that online ad impressions in the category doubled over the past four months alone.”
There is also tremendous variation by sub-segment within the retail sector, Buchwalter said, and also in company-by-company ad placement strategies.
The effectiveness of banner ads in drawing online shoppers did receive some support recently from an Andersen Consulting study of 1,500 experienced Internet users. The study found that 25 percent said banner advertising drove their holiday online shopping activities, beating out newspapers or magazine ads (14 percent), television commercials (11 percent), radio spots (4 percent), and billboards (4 percent). The Andersen study also found that the creative used in most e-commerce Internet ads and the factors that motivate people to shop online do not match. While Andersen says most Web site banner ads are price-oriented in nature, less than half of experienced Web users cite price as the primary factor driving their holiday Web purchases. Instead, Andersen’s respondents cited convenience, time savings, and site security as more meaningful factors in promoting e-commerce during the holidays.
1.Drug & Toiletry2.0%8.9%6.9%8.Home & Garden1.3%2.3%1.0%9.Apparel0.5%1.4%0.9%10.Event & Ticket*0.0%0.7%0.7%
Retail Categories with Largest Increase in Share of Online Ad Impressions | ||||
---|---|---|---|---|
Rank | Category | Week of 7/5/99 | Week of 11/8/99 | % Increase |
2. | Toys & Collectibles | 1.6% | 7.9% | 6.3% |
3. | Auction Houses | 11.4% | 16.3% | 4.8% |
4. | Office Supply | 0.7% | 4.7% | 3.9% |
5. | Jewelry & Accessory | 0.0% | 1.6% | 1.6% |
6. | Grocers | 0.0% | 1.6% | 1.5% |
7. | Pet Supply | 0.1% | 1.5% | 1.3% |
* Advertising began week of July 19 Source: AdRelevance |
8.Book, Movie, & Music Vendors4
Percentage of Overall Online Ad Spending By Retail Category (Week of November 8) |
||
Rank | Category | Percentage of Impressions |
---|---|---|
1. | Department Stores | 33 |
2. | Auction Houses | 16 |
3. | Drug & Toiletry Vendors | 9 |
4. | Technology Vendors | 9 |
5. | Toys & Collectibles Vendors | 8 |
6. | Office Supply Vendors | 5 |
7. | Flowers & Gifts | 5 |
9. | Home & Garden Vendors | 2 |
10. | Other | 9 |
Source: AdRelevance |
Online Ad Leaders in Online Auction House Category (By Impression) |
|||||
Week of August 9 | Week of November 8 | ||||
---|---|---|---|---|---|
Rank | Company | Impressions | Rank | Company | Impressions |
1. | Amazon.com | 40,000,000 | 1. | eBay | 36,000,000 |
2. | Ubid | 20,000,000 | 2. | Ubid | 34,000,000 |
3. | eBay | 20,000,000 | 3. | Yahoo | 11,000,000 |
4. | Yahoo | 7,600,000 | 4. | Infoseek | 6,200,000 |
5. | Onsale | 2,700,000 | 5. | First Auction | 4,900,000 |
18. | First Auction | 84,000 | 7. | Amazon.com | 3,100,000 |
n/a | Infoseek | n/a | 9. | Onsale | 1,200,000 |
Source: AdRelevance |