Over the festive period in the UK, paid search ads generated 50% more transactions than last year, resulting in a 26% rise in revenues from the medium, according to new research.
The study, from digital marketing software provider Kenshoo, illustrate the UK’s transition into a nation of online shoppers, increasing click costs of search advertising in the U.K. and the profitable nature of U.K. search advertising.
The report documents year-over-year (YoY) growth of total sales revenue for retailers driven by search advertising (26 percent), search budgets (26 percent) and average search conversion rate (31 percent).
“Online shopping in the U.K. has come of age, with consumers more comfortable than ever to make purchases online,” said Chris Ward, Managing Director of Europe for Kenshoo. “U.K. consumers now shop more often online but they spend less per transaction in an effort to get the best deals. Retailers also appeared more comfortable with search advertising, generating superior conversion rates with better quality ads.”
Other key report findings from the Christmas period include:
• Despite high competition, U.K. retailers generated strong return on ad spend. The average cost-per-click for search advertising rose by 10 percent YoY but the average return on ad spend of £13.21.
• Last-minute shoppers drove U.K. retailer revenue up the week before Christmas. During the final shopping week (17-23 December) online sales generated 74 percent more revenue than last year.
• In the U.K., retailers saw a missed opportunity during the last two weeks of December. Even though budgets decreased four percent from last year, conversion rates and sales transactions increased by 75 percent and 66 percent respectively.
“People joke that Christmas starts earlier every year, but that’s precisely what happened this year with advertisers spending more aggressively starting in early November,” added Ward. “The inverse was seen with online shopping behavior. Shoppers ramped up their spending during the last few weeks before Christmas, making the most of last-minute online bargains, just as retailers’ search budgets were beginning to dwindle. Nevertheless, last minute shoppers flocked online to find bargains, generating an 18 percent increase in average Boxing Day revenue.”
Comparisons with US market
Kenshoo produces a similar report for U.S. search advertising spend during the Thanksgiving and Christmas Holiday season.
Comparing the two reports shows that U.K. consumers are much more willing to shop online than their U.S. counterparts, with total sales revenues for U.K. retailers driven by search advertising nearly 20 percent greater than that seen by the Kenshoo US Retail Index, which saw a 22 percent rise in YoY revenue for the same period.
The Kenshoo 2011 U.K. Online Retail Christmas Shopping Season Report also includes implications for search marketing in 2012, a calendar timeline of day-by-day holiday season revenue fluctuations, and a glossary of search marketing terms and formulas.
The research provided in this report is based on the Kenshoo U.K. Retail IndexTM, a cross-section of Kenshoo retail advertisers covering verticals like apparel, electronics, entertainment, home improvement, gifts, luxury goods and toys.
The dataset includes paid search advertising in the U.K. across channels like Google, Yahoo and Bing from 2 November 2011 through 2 January in 2012 and compared to that same period one year prior.
The statistics from this past season were culled from an aggregation of nearly 1 billion total search advertising impressions, 20 million clicks and 1 million online sales transactions.
Visit www.Kenshoo.com/2011HolidayReport to receive a complimentary copy of the report.
Source: www.Kenshoo.com