2013 global online retail seasonal shopping report: final edition · 2020. 1. 22. · global 2013...

© 2014 Kenshoo Inc. | CO-04-0004-EN 1

2013 Global Online RetailSeasonal Shopping Report: Final Edition

Covering Global Search Advertising TrendsUpdated through December 31, 2013

Release Date: January 15, 2014

© 2014 Kenshoo Inc. | CO-04-0004-EN 2

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Global Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Search engines represent a key resource during 2013 global online shopping season as retailers generate year-over-year increases in paid search metrics 5

Calendar Breakdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Global 2013 Calendar Recap – Day-over-Day Online Retail Paid Search Impression Opportunity 6

Global 2013 Calendar Recap – Day-over-Day Online Retail Paid Search Revenue Opportunity 7

U .S . Insights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2013 U.S. revenues driven by 34% year-over-year increase on Thanksgiving Day 7

Key dates in the U.S. shopping season garner double-digit increases in revenue during 2013 7

Black Friday continues to be a key date during the 2013 U.S. shopping season with 48% year-over-year growth in online transactions 8

U.S. search retailers get more bang for their buck during the 2013 shopping season 9

U.S paid search spend up 19% YoY during 2013 U.S. shopping season, with retailers ramping up spending earlier this year 111

U.S. Free Shipping Day paid search year-over-year 2013 performance improves slightly with 2% and 8% increases in impressions and clicks respectively 112

Strong paid search conversion rates and returns prove paid search to be an essential part of the 2013 U.S. online shopping season 13

U .K . Insights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

U.K. retailers increase investment in paid search with 17% boost in ad spend YoY and 65% YoY increase in ad spend on Boxing Day alone 15

Retailers generate nearly 300% year-on-year growth in paid search revenue on Black Friday in the U.K. 16

Average order value on Black Friday jumps 50% year-on-year during the 2013 shopping season in the U.K. 16

U.K. retailers generate an average return on ad spend of £8.30 throughout the 2013 shopping season, peaking on Black Friday at £17.04 17

U.K. retailers see vast year-on-year increases in click and impression volume for Black Friday and steady growth throughout the entire 2013 shopping season 18

Cyber Monday booms in the U.K. in 2013 with 95% year-on-year revenue growth 19

Green Monday continues to shine during the 2013 U.K. shopping season with double-digit year-on-year growth in impressions, clicks, conversions, and revenue 20

U.K. retailers generate over 100% year-on-year revenue growth on Boxing Day 20

Full 2013 U.K. online shopping season brings in record high year-on-year increases in revenues 21

Table of Contents

© 2014 Kenshoo Inc. | CO-04-0004-EN 3

Global Product Listing Ads Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Global online retailers embrace PLAs during the 2013 shopping season with 138% YoY increase in ad spend 22

Global retailers needed less PLA impressions to generate more clicks this shopping season 23

138% YoY increase in global retail PLA spend during 2013 shopping season yields nearly 9 to 1 return on ad spend 24

Global retailers drive a 49% higher return on ad spend with Product Listing Ads than text ads 25

Global Mobile Ad Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Phones and tablets generate year-over-year gains in traffic and revenue during the 2013 global shopping season 26

Over 32% of retail paid search ad spend allocated to mobile devices during the 2013 global shopping season 27

U .S . Mobile Ad Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

32% of U.S. retail paid search ad spend targeted to mobile devices during 2013 peak shopping season 28

More than 1 out of every 3 U.S. retail paid search clicks originated from mobile devices during the 2013 shopping season 28

Computers are still the biggest driver of paid search revenues with tablets catching up in 2013 29

U .K . Mobile Ad Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Tablets trigger double-digit YoY growth in clicks, conversions, and revenue during the 2013 U.K. shopping season 31

Over one-quarter of 2013 U.K. retail paid search ad spend allocated towards tablets during 2013 shopping season 32

Over 40% of U.K. retail paid search clicks originate from mobile devices during 2013 shopping season 33

Key SEM Imperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

About Kenshoo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Table of Contents

© 2014 Kenshoo Inc. | CO-04-0004-EN 4

2013 was another record year for paid search during the peak shopping season with year-over-year (YoY) increases in virtually every key performance indicator (KPI). Ad spend, revenue, and clicks were all up, indicating a very healthy paid search forecast to begin 2014.

As reported in the Kenshoo 2013 Global Online Retail Seasonal Shopping Report: Early Edition, key dates such as Thanksgiving, Black Friday, and Cyber Monday were big not only in the U.S., but in the U.K. as well. This complete analysis of the 2013 shopping season includes performance data from key dates later in the season such as Green Monday, Free Shipping Day, Boxing Day, etc.

Two major trends represented big news during the 2013 shopping season .

• Mobile devices accounted for over 36% of all clicks and over 32% of paid search ad spend was allocated to these devices.

• Paid search retailers embraced Product Listing Ads with spend up 138% YoY globally and total global revenues from PLAs up 269% YoY.

Please enjoy this analysis from the Kenshoo Marketing Research team along with our best wishes for a prosperous 2014.

NOTE: For the purposes of this final edition report, the shopping season is defined as the 61-day period from November 1st through December 31st.

Introduction

© 2013 Kenshoo Inc. | CO-04-0004-EN 4

http://www.kenshoo.com/2013globalshoppingearlyedition/

© 2014 Kenshoo Inc. | CO-04-0004-EN 5

Search engines represent a key resource during 2013 global online shopping season as retailers generate year-over-year increases in paid search metrics As expected, the role of online shopping continued to grow in importance during the peak shopping season of 2013 as retailers increased their YoY investment to reach consumers via search engines. Following the record-high increases in paid search performance during the 2012 shopping season, consumers actively responded to paid search messaging in 2013 with a 13% YoY increase in clicks leading to a 4% YoY lift in online sales revenue. Of all KPIs, paid search conversions saw the biggest lift with a 21% YoY increase.

Throughout the 2013 season, global retailers benefited from YoY increases in click-through rate and conversion rate. It’s clear that these retailers served more tailored and engaging messaging, garnering an actual click-through rate of 2.33%, a 7% YoY increase. With conversion rate at 4%, overall return on ad spend (ROAS) for the season was a very healthy 6 to 1 ratio.

Source: Kenshoo 2013 Global Online Retail Seasonal Shopping Report: Final Edition© 2014 Kenshoo LTD, All Rights Reserved

7.31%4.96% 12.63% 8.44% 21.15% 3.60% -3.73% 7.56%

Increases in 2013 U.S. Retail Shopping Season Product Listing Ads Key Metrics Year-over-Year

IMPRESSIONS CLICKS AD SPEND CONVERSIONS REVENUE CTR CPC CONV. RATE


2.33% 4.07% $5.93

Key Global Online Retail Paid Search Metrics for 2013 Shopping Season

CLICK-THROUGH RATE CONVERSION RATE RETURN ON AD SPEND

Global Overview

© 2014 Kenshoo Inc. | CO-04-0004-EN 6

The following calendars break down the 2013 shopping season and highlight days with the greatest opportunity for paid search retailers during November and December. Opportunity is measured by looking at impressions (i.e., available traffic) as well as revenue (i.e., online retail sales from paid search). These tables should be useful for assessing the 2013 shopping season at a glance and making predictions and preparations for next year.

December

More

Less

Mon. Tue. Wed. Thu. Fri. Sat.

= Thanksgiving, Black Friday

Sun. Mon. Tue. Wed. Thu. Fri. Sat.Sun.

Mon. Tue. Wed. Thu. Fri. Sat.Sun.Mon. Tue. Wed. Thu. Fri. Sat.Sun.

November

DecemberNovember

Global 2013 Calendar Recap – Day-over-Day Online Retail Paid Search Impression Opportunity

Global 2013 Calendar Recap - Day-over-Day Online Retail Paid Search Revenue Opportunity

=Cyber Monday, Green Monday, Free Shipping day, Christmas

= Thanksgiving, Black Friday =Cyber Monday, Green Monday, Free Shipping day, Christmas

Calendar Breakdown

© 2014 Kenshoo Inc. | CO-04-0004-EN 7

U.S. Insights

2013 U.S. revenues driven by 34% year-over-year increase on Thanksgiving DayTotal sales revenue driven by paid search for the 2013 holiday season in the U.S. were quite strong. As seen in 2012 and many years past, key dates for online sales revenue in the U.S. include Thanksgiving, Black Friday, and Cyber Monday. Thanksgiving Day is growing in importance as a critical shopping date, with a 34% YoY increase in online sales revenue. In the 2013 shopping season, Cyber Monday continued to produce the greatest amount of online sales revenue, with Black Friday close behind.

Key dates in the U.S. shopping season garner double-digit increases in revenue during 2013Consumers’ online paid search activity continues to grow on Thanksgiving and Black Friday with 2013 Thanksgiving Day revenue from paid search increasing 34% YoY. U.S. consumers started their seasonal shopping spending earlier in 2013, reacting to the more compressed shopping timeline.

2013 U.S. Online Retail Sales Revenue Driven by Paid Search

20132012 Thanksgiving Black Friday Cyber Monday Green Monday Free Shipping Day Christmas

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© 2014 Kenshoo Inc. | CO-04-0004-EN 8

Black Friday continues to be a key date during the 2013 U.S. shopping season with 48% year-over-year growth in online transactionsOnline transactions during the 2013 U.S. shopping season grew steadily, with a 26% increase in total transactions throughout the entire season. Retailers saw a massive jump on Black Friday, with a 48% YoY increase in online sales transactions. Consumers are enticed by one-day sales and free delivery promotions offered on dates such as Black Friday and thus, tend to make purchases at multiple retailers, contributing to the high YoY increases in the number of sales transactions.


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2013 U.S. Retail Online Sales Transaction Volume Driven by Paid Search

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2013 Year-over-Year Increases in U.S. Retail Revenue from Paid Search on Key Dates

Thanksgiving Black Friday

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U.S. Insights

© 2014 Kenshoo Inc. | CO-04-0004-EN 9

U.S. search retailers get more bang for their buck during the 2013 shopping seasonThroughout the entire 2013 U.S. shopping season, retailers got more bang for their buck by generating 19% more clicks YoY with only a 7% increase in impressions. This level of efficiency – especially during such a competitive shopping season – implies that retailers were able to use paid search more effectively than last year to get the right messages in front of the right consumers at the right time. Specifically on Black Friday and Thanksgiving, consumers were eager to jump start their shopping with 20% and 17% YoY increases in clicks respectively.

2013 Year-over-Year Increases in U.S. Retail Online Sales Transaction Volume Driven by Paid Search


Black Friday Cyber Monday Full Shopping Season

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2013 U.S. Retail Paid Search Impression Volume up 7% Year-over-Year

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U.S. Insights

© 2014 Kenshoo Inc. | CO-04-0004-EN 10


2012 U.S. Retail Paid Search Click Volume up 19% Year-over-Year

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ImpresssionsClicks

Thanksgiving Black Friday Cyber Monday Full Shopping Season

2013 Year-over-Year Increases in Retail Paid Search Click and Impression Volume on Key Dates

18.88%

6.91%

U.S. Insights

© 2014 Kenshoo Inc. | CO-04-0004-EN 11

Retailers generated a YoY increase in clicks and impressions on all key dates in 2013. For example, on Green Monday, U.S. retailers saw a 23% YoY increase in clicks while only increasing spend by 16% YoY. Similarly, retailers upped their ad spend on Free Shipping Day by 3%, yet observed an 8% YoY increase in clicks. Online retailers should keep this in mind for next year and invest on these key dates to see the best return.

2013 U.S. Retail Paid Search Ad Spend Up 19% Year-over-Year


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U.S. Insights

U.S paid search spend up 19% YoY during 2013 U.S. shopping season, with retailers ramping up spending earlier this yearThanksgiving has traditionally kicked off the major lift in advertising spend, but retailers ramped up spending earlier in anticipation that consumers would begin shopping earlier this year. As you can see in the day-over-day (DoD) chart, spending on the days leading to Thanksgiving 2012 rose steadily, but in 2013, there was a dramatic uptick in spending after the first few weeks. Tremendous increases in spend were observed during the 2013 U.S. shopping season on Thanksgiving Day and Black Friday with 65% and 47% YoY increases respectively.

© 2014 Kenshoo Inc. | CO-04-0004-EN 12

U.S. Free Shipping Day paid search year-over-year 2013 performance improves slightly with 2% and 8% increases in impressions and clicks respectivelyFree Shipping Day is the last day consumers can take advantage of standard online retail free shipping promotions prior to Christmas. During the 2013 U.S. shopping season, Free Shipping Day (December 18th) saw slight YoY improvements. The 8% increase in clicks against 3% increase in ad spend proves this day to be very efficient for search retailers.

2013 U.S. Free Shipping Day YoY Increases in Paid Search Metrics


2.3% 7.7%

IMPRESSIONS CLICKS

3.3%

CONVERSIONS

3.0%

AD SPEND

U.S. Insights

2013 Year-over-Year Increases in Retail Paid Search Metrics for Key Dates

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Black Friday Cyber Monday Green Monday Free Shipping Day Day After Christmas

Clicks Ad Spend

© 2014 Kenshoo Inc. | CO-04-0004-EN 13

2013 Shopping Season U.S. Retail Paid Search Key Metrics


2.54% $4.66

CTR ROAS

4.42%

CONV. RATE

$58.16

AVE. ORDER VALUE

U.S. Insights

Strong paid search conversion rates and returns prove paid search to be an essential part of the 2013 U.S. online shopping seasonFor the entire period, online sales transactions driven by paid search were up 26% YoY with 19% more clicks and 7% more impressions.

Other key paid search metrics also increased in the 2013 U.S. shopping season. With a conversion rate of 4.42%, retailers leveraged better targeting and messaging to prompt consumers to click on their ads and make a purchase.

2013 Year-over-Year Increases in Key Paid Search Metrics During Full Shopping Season


24.44%

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Sales Transactions Clicks Impressions

© 2014 Kenshoo Inc. | CO-04-0004-EN 14

2013 U.S. Retail Paid Search Return on Ad Spend


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U.S. Insights

As seen in the day-over-day chart below, ROAS increased on key dates including Black Friday and Cyber Monday. With a 47% and 28% YoY increase in ad spend on those key dates, retailers’ investments paid off, yielding them the most return on those two days out of the entire shopping season.

© 2014 Kenshoo Inc. | CO-04-0004-EN 15

U.K. retailers increase investment in paid search with 17% boost in ad spend YoY and 65% YoY increase in ad spend on Boxing Day aloneU.K. retail search retailers increased their investment in paid search during 2013 shopping season with a 17% YoY increase in ad spend. Retailers saw great opportunity to reach consumers on Cyber Monday, with a 20% YoY increase in ad spend as the day has grown in importance in the U.K. with every passing year.

2013 Year-on-Year Increases in U.K. Retail Paid Search Ad Spend on Key Dates

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Cyber Monday Boxing Day Full Shopping Season

20.26%

64.91%

16.89%

Retailers didn’t wait long before targeting consumers with post-Christmas sales messaging. Boxing Day (26 December) saw a 65% increase in YoY ad spend, the greatest YoY increase throughout the entire shopping season. Retailers are seeing (and seizing!) the opportunity to lengthen the shopping season by extending their efforts after Christmas, in hopes of more efficiency and traffic during a time that has historically seen less shopping activity.


2013 U.K. Retail Paid Search Ad Spend up 17% Year-on-Year

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© 2014 Kenshoo Inc. | CO-04-0004-EN 16

Retailers generate nearly 300% year-on-year growth in paid search revenue on Black Friday in the U.K.During the 2013 shopping season, we noted a drastic change in U.K. buying patterns when compared to 2012. Cyber Monday and Green Monday produced high revenue for retailers in the 2012 shopping season; however, in 2013, Black Friday produced remarkably more revenue than any other day, driving a 264% YoY increase.

Average order value on Black Friday jumps 50% year-on-year during the 2013 shopping season in the U.K.Throughout the entire 2013 U.K. shopping season, average order values saw a 21% YoY increase. Specifically on Black Friday in 2013, average order values increased 50% YoY. As seen in the previous revenue chart, Black Friday is becoming a more important date in the U.K., and consumers are taking advantage of these one-day sales and filling up their shopping carts.


2013 U.K. Revenue from Paid Search Peaks on Black Friday

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© 2014 Kenshoo Inc. | CO-04-0004-EN 17

U.K. retailers generate an average return on ad spend of £8.30 throughout the 2013 shopping season, peaking on Black Friday at £17.04U.K. retailers saw the greatest ROAS on Black Friday in the 2013 shopping season, peaking at nearly £17.04. Bumping up spending on Black Friday clearly paid off for U.K. retailers as consumers packed more in their shopping carts, thus increasing retailers’ return.

2013 Year-on-Year Increases in U.K. Average Order Values on Key Dates

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2013 U.K. Retail Average Order Value for Online Sales Transactions Driven by Paid Search Spikes on Black Friday


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© 2014 Kenshoo Inc. | CO-04-0004-EN 18

U.K. retailers see vast year-on-year increases in click and impression volume for Black Friday and steady growth throughout the entire 2013 shopping season2013 U.K. paid search growth was driven by steady increases in clicks and impressions, specifically on Black Friday, with a 51% YoY growth in clicks and 52% YoY growth in impressions. Post-Christmas sales drove a considerable amount of traffic in the 2013 U.K. shopping season, with a 58% YoY increase in clicks. Consumers are showing interest in extending the shopping season past the Christmas holiday and responding to post-Christmas, or Boxing Day, sales.

2013 U.K. Retail Paid Search Return on Ad Spend


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U.K. Insights

© 2014 Kenshoo Inc. | CO-04-0004-EN 19

Cyber Monday booms in the U.K. in 2013 with 95% year-on-year revenue growthIn the U.K., retail advertisers and consumers kicked into high gear on Cyber Monday with ad spend jumping by 20% YoY and revenues up an incredible 95% YoY. U.K. retailers also drove a 47% increase in conversion rate on Cyber Monday, attributed to more accurate targeting and relevant messaging.

2013 U.K. Retail Paid Search Impressions Up 27% Year-on-Year


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© 2014 Kenshoo Inc. | CO-04-0004-EN 20

Green Monday continues to shine during the 2013 U.K. shopping season with double-digit year-on-year growth in impressions, clicks, conversions, and revenueTypically, as Green Monday rolls around, the U.K. shopping season is in full gear. In 2013, Green Monday fell on 9 December, with only about 2 weeks until the Christmas holiday. Retailers ramped up spend by 18% YoY, yielding them a 55% YoY increase in revenue. With double-digit YoY growth in impressions, clicks, conversions, and revenue, Green Monday continues to be an integral date during the U.K. shopping season.

U.K. retailers generate over 100% year-on-year revenue growth on Boxing DayRetailers and consumers in the U.K. have turned Boxing Day into one of the most important online shopping days of the Christmas season. This year, retailers spent 65% more on paid search ads on Boxing Day – and consumers responded by spending over 100% more on online purchases. Advertisers improved the effectiveness of their ads with a 13% increase in conversion rates.


40.96% 25.89% 84.66% 20.26% 94.83% 46.68%

2013 Cyber Monday YoY Increases in Key U.K. Retail Paid Search Metrics

IMPRESSIONS CLICKS CONVERSIONS AD SPEND REVENUE CONV. RATE


35.71% 14.82% 42.82% 17.52% 55.13%

2013 Green Monday YoY Increases in Key U.K. Retail Paid Search Metrics

IMPRESSIONS CLICKS CONVERSIONS AD SPEND REVENUE

U.K. Insights

© 2014 Kenshoo Inc. | CO-04-0004-EN 21

U.K. Insights

Full 2013 U.K. online shopping season brings in record high year-on-year increases in revenuesOverall, for the 2013 U.K. shopping season, we saw YoY increases in all key retail paid search metrics. Advertisers increased ad spend by 17% YoY, but saw an incredible 63% YoY increase in online sales revenue. Drilling in further, we saw 35% more conversions YoY and a 39% YoY increase in return on ad spend.

Adding to the revenue equation, consumers filled up their shopping carts with a 21% increase in average order value. Paid search has yet again proven to be an efficient and effective channel for U.K. retailers to capture online traffic and revenue, making the 2013 shopping season quite successful.


27.14% 14.42% 34.81% 16.89% 62.58%

Year-on-Year Increases in Key U.K. Retail Paid Search Volume Metrics for 2013 Shopping Season

IMPRESSIONS CLICKS CONVERSIONS AD SPEND REVENUE


£ 8.28 4.78% £ 87.51

2013 Shopping Season U.K. Retail Paid Search Key Metrics

RETURN ON AD SPEND CONVERSION RATE AVERAGE ORDER VALUE


44.38% 57.93% 78.63% 64.91% 101.27% 13.11%

2013 Boxing Day YoY Increases in Key U.K. Retail Paid Search Metrics

IMPRESSIONS CLICKS CONVERSIONS AD SPEND REVENUE CONV. RATE

© 2014 Kenshoo Inc. | CO-04-0004-EN 22

Global Product Listing Ads Performance

Global online retailers embrace PLAs during the 2013 shopping season with 138% YoY increase in ad spend Product Listing Ads (PLAs) provide prime location on the search results page for retailers to capture online traffic. Global retailers spent nearly 138% more YoY on Product Listing Ads during the 2013 peak shopping season. With a 97% YoY increase in clicks and 269% YoY increase in revenue, this ad type proved to be very effective.

As seen in the day-over day chart, ad spend for PLAs stayed relatively consistent throughout the 2013 global shopping season except for key dates. On Black Friday and Cyber Monday, ad spend spiked 314% and 273% respectively YoY.

Year-over-Year Increases in 2013 Global Retail Shopping Season Product Listing Ads Key Metrics


Spend Clicks Impressions Revenue

96.92%

56.69%

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Global Retail Product Listing Ads Spend Year-over-Year

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© 2014 Kenshoo Inc. | CO-04-0004-EN 23


Global retailers needed less PLA impressions to generate more clicks this shopping seasonDuring the 2012 shopping season, the click-through rate on PLAs was 2.7%. That rose 26% YoY to an average CTR of 3.4% in 2013. With this increased efficiency, merchants were able to generate 97% more clicks from only 57% more impressions YoY.


25.68% 96.92% 56.69%

Year-over-Year Increases in 2013 Global Retail Shopping Season Product Listing Ads Key Metrics

CLICK-THROUGH RATE CLICKS IMPRESSIONS

Retailers are still gaining experience with this ad format so this dramatic increase in global click efficiency is a sign that they are finding best practices in the way they approach PLAs.


Global Retail Product Listing Ads Click Volume Year-over-Year

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© 2014 Kenshoo Inc. | CO-04-0004-EN 24


138% YoY increase in global retail PLA spend during 2013 shopping season yields nearly 9 to 1 return on ad spend Total global revenues from PLAs increased 269% YoY with ROAS reaching $8.84 in 2013. With nearly a 9 to 1 return on their investment, retailers investing heavily in this ad format reaped the benefits, while those who missed the boat should be lamenting the missed opportunity.


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© 2014 Kenshoo Inc. | CO-04-0004-EN 25


Global retailers drive a 49% higher return on ad spend with Product Listing Ads than text adsProduct Listing Ads performed better across the board versus traditional paid search ad metrics. PLAs drove 49% higher returns than paid search with an average ROAS of $8.84, while also producing a 47% higher click-through rate of 3.42%.

$ 8.84

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2013 Global Retail Product Listing Ads vs. Text Ads

PLAs

Difference

Paid Search

RETURN ON AD SPEND CLICK-THROUGH RATE

© 2014 Kenshoo Inc. | CO-04-0004-EN 26

Global Mobile Ad Performance

Phones and tablets generate year-over-year gains in traffic and revenue during the 2013 global shopping seasonGlobal consumers were reaching for their tablets and phones when searching for and buying products during the 2013 shopping season, with over 36% of all clicks combined. While the majority of ad spend (67%) and conversions (81%) was still devoted to computers, tablets have proven to be effective devices for purchases, accounting for almost 20% of all revenue.

63.10%

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5.70%

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2013 Global Retail Shopping Season Paid Search Key Metrics - Breakdown by Device

Computer

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Phone

CLICKSDEVICE CONVERISONS REVENUE AD SPEND CONV. RATE


2013: Global Retail Shopping Season Clicks and Conversions by Device

Share Of Paid Search Clicks Share Of Paid Search Conversions

63.10% 81.39%

13.76%4.85%

20.76%

16.14%

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Phone

Tablet

© 2014 Kenshoo Inc. | CO-04-0004-EN 27

Global Mobile Ad Performance

Over 32% of retail paid search ad spend allocated to mobile devices during the 2013 global shopping seasonThis shopping season, global retailers still allocated the majority of their paid search spend to computers (67%), but phone and tablet devices are slowly catching up with over 32% of total ad spend. Google’s big shift to enhanced campaigns was likely a significant driver in this lift in mobile spend as advertisers are now automatically opted in to tablet and phone targeting by default within the AdWords program.

As seen in the pie chart below, this investment is paying off when it comes to tablet devices, where 18% of total revenue stems from tablet devices with only 17% of total ad spend. On the other hand, only 4% of total online revenue originates from phones when retailers are spending 15% of their total investment on this channel. However, global retailers are still confident that paid search activity on mobile devices influences purchases, with consumers actively searching for product information and researching on their mobile devices and turning to computers to make their purchases soon after.


2013: Global Retail Shopping Season Ad Spend and Revenue by Device

Share Of Paid Search Revenue Share Of Paid Search Ad Spend

18.20%4.24%

77.57% 67.23%15.43%

17.34%

Computer

Phone

Tablet

© 2014 Kenshoo Inc. | CO-04-0004-EN 28

U.S. Mobile Ad Performance

More than 1 out of every 3 U.S. retail paid search clicks originated from mobile devices during the 2013 shopping season36% of all U.S. paid search clicks came from mobile devices in 2013’s shopping season, a 27% YoY increase from 2012. The biggest driver came from tablets, where clicks jumped from 8% of total clicks in 2012 to 14.5% of total clicks in 2013 (a lift of 77% YoY). Phone clicks increased just 7% YoY to 22% of total clicks.


U.S. Retail Shopping Season Share of Paid Search Ad Spend by Device

Computer

Phone

Tablet

2013 2012

15.77%

12.30%

68.17%79.62%

16.07% 8.08%

32% of U.S. retail paid search ad spend targeted to mobile devices during 2013 peak shopping seasonDuring the shopping season of 2012, paid search retailers in the U.S. allocated just 20% of total spend to mobile devices (12% to phones and 8% to tablets). That number increased 56% YoY to 32% in 2013 with phones and tablets each taking roughly 16%.

Computers (desktops, laptops, etc.) still maintained top priority for U.S. retailers in 2013, with over 68% of all spend allocated to those devices. However, this is a decrease of 14.4% YoY from 2012 where computers captured 80% of total U.S. retail search investment.

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Computers are still the biggest driver of paid search revenues with tablets catching up in 2013In 2012, 91% of all U.S. paid search revenues during the peak shopping season came from computers. In 2013, computer revenues (although up year-over-year), saw a decrease in total revenue device share by 11.4% YoY to 81% of total.

Tablets more than doubled from 6.6% of total U.S. revenue in 2012 to 15% in 2013 – a 128% YoY increase. With almost one-fifth of total revenue coming from tablets, this shopping season marks a major turning point in the importance of this device for retailers and consumers.

Phones captured just 4% of U.S. revenue share in 2013, yet retailers remain confident in the ability for phones to ultimately influence and impact purchase decisions. Advertisers know that consumers rely on their phones as an important resource for product information and pricing research, but will still turn to larger screen devices when they are ready to order online.

U.S. Retail Shopping Season Share of Paid Search Clicks by Device


Computer

Phone

Tablet

2013

63.77%21.70%

14.53% 8.20%

2012

71.54%20.26%

U.S. Retail Shopping Season Share of Paid Search Revenues by Device


Computer

Phone

Tablet

2013 2012

6.60%

2.12%

91.28%80.84%

15.06%4.10%

Source:

Kenshoo 2013 Global Online Retail Seasonal Shopping Report: Final Edition

© 2014 Kenshoo LTD, All Rights Reserved

Source:

Kenshoo 2013 Global Online Retail Seasonal Shopping Report: Final Edition

© 2014 Kenshoo LTD, All Rights Reserved

© 2014 Kenshoo Inc. | CO-04-0004-EN 30



63.77%

21.70%

14.53%

84.20%

4.49%

11.31%

80.84%

4.10%

15.06%

68.17%

15.77%

16.07%

5.79%

0.91%

3.41%

Computer

Tablet

Phone

CLICKS2013 CONVERISONS REVENUE AD SPEND CONV. RATE

71.54%

20.26%

8.20%

91.59%

2.30%

6.11%

91.28%

2.12%

6.60%

79.62%

12.30%

8.08%

5.20%

0.46%

3.03%

Computer

Tablet

Phone

CLICKS2012 CONVERISONS REVENUE AD SPEND CONV. RATE

10.86%

7.10%

77.21%

8.07%

95.22%

85.15%

11.44%

93.33%

128.17%

14.39%

28.18%

98.86%

11.28%

97.14%

12.61%

Computer

Tablet

Phone

CLICKS% Change in

Share YoY CONVERISONS REVENUE AD SPEND CONV. RATE

2013 U.S. Retail Shopping Season Paid Search Key Metrics - Breakdown by Device

© 2014 Kenshoo Inc. | CO-04-0004-EN 31

U.K. Mobile Ad Performance

Tablets trigger double-digit YoY growth in clicks, conversions, and revenue during the 2013 U.K. shopping seasonThis shopping season, U.K. retailers experienced a shift in the use of mobile devices (smartphones and tablets) with a larger portion of clicks, conversions, and revenue originating from tablets. More specifically, tablets drove 40% more clicks, 48% more conversions, and 39% more revenue this shopping season than in 2012. U.K. retailers were able to capitalize on tablets’ lower costs-per-click and higher average order values (when compared to computers) to get the most of out their investment.


Computer

Tablet

Phone

CLICKS2013 CONV. REVENUE AD SPEND

2013 U.K. Retail Shopping Season Paid Search Key Metrics - Breakdown by Device

59.46% 65.99% 65.92% 61.44%

6.75% 4.56%

29.52% 25.20%

13.36%

27.25%

15.30%

25.24%

Computer

Tablet

Phone

CLICKS2012 CONV. REVENUE AD SPEND

68.88% 78.07% 75.32% 78.74%

3.62% 3.40%

21.27% 14.17%

7.09%

18.31%

13.09%

18.02%

Computer

Tablet

Phone

CLICKS% Change in Share YoY CONV. REVENUE AD SPEND

13.68% 15.47% 12.48% 21.97%

86.54% 34.22%

38.78% 77.86%

88.42%

48.85%

16.87%

40.09%

© 2014 Kenshoo Inc. | CO-04-0004-EN 32


Over one-quarter of 2013 U.K. retail paid search ad spend allocated towards tablets during 2013 shopping seasonComputers still capture the majority of U.K. retailer’s paid search ad spend -- totaling 61% of spend in the 2013 shopping season -- but tablets are slowly catching up. With a 78% YoY increase in ad spend (14% in 2012 and 25% in 2013), U.K. retailers are capitalizing on the opportunity tablets bring. Phones are not far behind, capturing 13% of overall ad spend, an 88% YoY increase.

2013

25.20%

61.44%

13.36%

U.K. Retail Shopping Season Share of Paid Search Ad Spend by Device


Computer

Phone

Tablet

2012

14.17%

7.09%

78.74%

In 2012, tablets accounted for just 21% of U.K. online revenues from paid search. In 2013, that number jumped to almost 30%, a 39% YoY increase. U.K. advertisers are still seeing the power of their investment in computers with 66% of revenue originating from computers with only 61% of ad spend.

© 2014 Kenshoo Inc. | CO-04-0004-EN 33


Over 40% of U.K. retail paid search clicks originate from mobile devices during 2013 shopping season41% of all retail paid search clicks in the U.K. came from mobile devices in the 2013 shopping season, a 30% YoY increase from 2012. Tablets made the biggest impact in 2013 with a 40% YoY increase in clicks, whereas phones saw a slightly lesser lift from 13% to 15%, a YoY increase of 17%.

U.K. Retail Shopping Season Share of Paid Search Revenue by Device


Computer

Phone

Tablet

2013

4.56%

65.92%

29.52%

2012

3.40% 75.33%

21.27%

U.K. Retail Shopping Season Share of Paid Search Clicks by Device


Computer

Phone

Tablet

2012

68.89%13.09%

18.02%

2013

59.46%

25.24%

15.30%

© 2014 Kenshoo Inc. | CO-04-0004-EN 34

Key SEM Imperatives

Use historical data to anticipate critical days of opportunity and competition Every year, retailers gain insights into consumer behavior on key dates such as Black Friday, Cyber Monday, and Green Monday. As performance changes year-over-year, be sure to apply learnings from the previous year to your search marketing strategy. For example, since U.K. consumers made more online purchases on Black Friday than years’ past, you should allocate more budget towards that day next year and be prepared for the influx in traffic.

Although being prepared will give you a leg up, make sure to use technology wisely in order best manage your paid search efforts to truly maximize your performance. Advanced bid management platforms can offer valuable tools to help you run your programs more efficiently including budget forecasting, automated marketing calendar integration, scheduled campaign actions, etc. Additionally, sophisticated portfolio optimization using actionable attribution models can increase your Return on Investment (ROI) without requiring manual management of keywords, bids, and budgets on key dates during the season.

Diversify your paid search ad types – PLAs deliver excellent returnsThe paid search landscape has evolved and grown tremendously in the past few years. Newer ad formats such as Product Listing Ads (PLAs) offer engaging and visual ways to connect with consumers. As seen in this year’s shopping season, retailers drove a 63% YoY increase in clicks and 82% YoY increase in revenue from PLAs, proving it to be a highly effective ad type during the 2013 shopping season.

You should continue to leverage PLAs beyond the shopping season and fine tune your strategies as this format continues to mature. One of the biggest steps that you can take to ensure you are getting the most out of your PLA programs is to ensure accuracy of your feed so that products which have been discontinued or are currently out of stock do not get promoted. This can waste valuable clicks and frustrate consumers who reach your site. Other best practices to consider are to use impactful images that stand out on the search engine results pages (SERPs) and add negatives as you would with standard paid search campaigns to weed out wasteful traffic. Finally, leverage bid management platforms that can integrate directly with your feeds and merchant center accounts for holistic optimization.

Adjust paid search strategy by device to account for mobile and tablet growthConsumers are changing their search and purchase habits, and retailers need to understand the shift that is occurring from desktop to mobile paid search traffic and adjust bids and budgets accordingly. More than 1 out of every 3 global paid search clicks originated from mobile devices (smartphones and tablets) during the 2013 shopping season – a 27% YoY increase.

You need to not only make sure your campaigns are optimized for mobile devices, but also utilize tools such as mobile bid adjustments to target your consumers on each device. Overall, the best strategy is to approach consumers on their devices in the manner in which they wish to be engaged. For example, is your site optimized for smart phone or tablet visitors? Do you have a mobile app that works well and provides a truly likable experience for your consumers? Does your ad copy address the intent of the consumer’s search based on context and location? Are you using location extensions? Mobile visitors expect you to communicate appropriately based on the device they are using and provide the most relevant information.

Tailor keyword selection and messaging strategy to increase efficiencyDuring the peak shopping season, global retailers are investing heavily in paid search, resulting in a race to break through the noise. To make this investment worth your while, it’s critical to capture consumer intent on all searches related to your offering. Furthermore, ad content must be engaging and tailored to attract consumers to click-through, thus improving the

© 2014 Kenshoo Inc. | CO-04-0004-EN 35

Key SEM Imperatives

chances of conversions and, in turn, revenue. Choosing keywords based on what products you have in stock and adding a layer of targeting, whether it be by time of day or geography, will allow you to reach your desired consumers at the right place and time to improve overall paid search performance.

One of the more innovative developments in digital marketing is real-time integration of paid search with inventory systems. Through advanced bid management platforms, you can customize ads with up-to-the-minute promotions, tie keywords to merchandising systems and pause out-of-stock items, etc. You now have more options than ever to leverage technology to help make keyword and creative optimization more efficient and impactful. During the busy shopping season, every incremental tactic can help you outflank your competition and drive meaningful revenue.

© 2014 Kenshoo Inc. | CO-04-0004-EN 36

Glossary

FormulasClick Through Rate (CTR) = Clicks/Impressions

Cost Per Click (CPC) = Cost/Clicks

Return on Ad Spend (ROAS) = Revenue/Cost

TermsBlack Friday: The Friday after U.S. Thanksgiving Day. In 2012: November 23rd. In 2013: November 29th.

Click: When a potential customer clicks on an ad and is taken to the retailer’s website or mobile application.

Conversion: An action taken by a customer to make a purchase or complete a retailer-defined goal after having been brought to the website or application by a paid search ad.

Cyber Monday: The Monday following U.S. Thanksgiving. In 2012: November 26th. In 2013: December 2nd.

Free Shipping Day: The last day consumers can order goods online in time to be delivered via standard retailer free shipping options (December 17th in 2012 and December 18th in 2013)

Green Monday: The second Monday of December. In 2012: December 10th. In 2013: December 9th.

Impressions: The number of times an ad is shown or the number of times a keyword triggers an ad to be shown.

Keyword: The word or words entered on a search engine that trigger an ad to be shown.

Product Listing Ads (PLAs): A Google ad format that is linked to a product feed and contains an image.

Revenue: Money earned by a retailer for their online sales driven by paid search.

Shopping Season: November 1st through December 31st (61 days)

Spend: The amount of money an advertiser spends on their ads. Also the total cost of all paid search clicks.

© 2014 Kenshoo Inc. | CO-04-0004-EN 37

Methodology

The data analyzed in this report reflects a representative cross-section of Kenshoo clients (advertisers and agencies) managing paid search programs for the retail vertical with active campaigns tracking impressions, clicks, conversions and revenue from November 1, 2012 through December 31, 2013. All year-over-year (YoY) comparisons are from retailers engaged in paid search marketing in both the 2012 and 2013 seasons so key metrics can be considered “same store sales.” 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 January 2, 2014 but subject to change as delayed conversions continue to accrue.

The data set covers over 20+ billion paid impressions and clicks on search engines like Google, Yahoo!, and Bing that delivered more than $1.7 billion dollars in online sales revenues during the November and December periods.

For all charts with day-over-day breakdowns, volume metrics have been normalized to a factor of 1 based on the initial volume for the first day of data. Data points from subsequent days are based on a multiplier from the first day. For example, 3.1 means that volume is 210% greater than volume on initial day measured.

© 2013 Kenshoo Inc. | CO-04-0004-EN 37

© 2014 Kenshoo Inc. | CO-04-0004-EN 38

About Kenshoo

Kenshoo is a digital marketing technology company that engineers premium solutions for search marketing, social media and online advertising. Brands, agencies and developers use Kenshoo Search™, Kenshoo Social™, Kenshoo Local™ and Kenshoo SmartPath™ to direct more than $200 billion in annual client sales revenue. Kenshoo is the only Facebook strategic Preferred Marketing Developer with native API solutions for ads across Google, Bing, Yahoo, Baidu, Twitter, Facebook, and Facebook Exchange.

The Kenshoo platform delivers Infinite Optimization™ through closed-loop targeting, universal integration, and dynamic attribution. Kenshoo powers campaigns in more than 190 countries for nearly half of the Fortune 50 and all 10 top global ad agency networks. Kenshoo clients include CareerBuilder, Expedia, Facebook, KAYAK, iREP, John Lewis, Resolution Media, Sears, Tesco, Travelocity, Walgreens, and Zappos. Kenshoo has 18 international locations and is backed by Sequoia Capital, Arts Alliance and Tenaya Capital.

Please visit www.Kenshoo.com for more information.

© 2013 Kenshoo Inc. | CO-04-0004-EN 38

http://www.kenshoo.com/

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