Digital advertising was front and center in 2018. During the holiday season alone, ecommerce saw $126 billion in online sales, representing a 16.5% year-over-year increase, according to Adobe Analytics. Increases in digital advertising helped drive this strong ecommerce performance with investments resulting in greater return on ad spend and higher revenue for retailers than years prior
Adlucent’s 2018 “Holiday Discoveries Report” revealed that retailers who invested in digital delivered an 18.1% increase in ecommerce revenue year over year (YoY), a 35% increase in orders and a 41% growth in revenue driven solely from paid search. Retailers saw even stronger performance in mobile—search revenues surged 155% from the previous year, with orders almost doubling and product listing ad (PLA) revenue up 48% YoY. With this significant YoY growth, what can retailers learn from 2018 to help guide their strategies moving forward?
Improve Mobile, Improve Sales
Mobile stole the show in 2018. During the holiday season, retailers saw a 50% increase in mobile orders and a 49% increase in mobile revenue. Ultimately, mobile accounted for a 65% share of total impressions.
Mobile commerce is ascending at impressive rates, and retailers must pursue an all-encompassing approach to digital advertising that leverages the traits of each device and complements conversion across the ecosystem. By next year, there’s a high possibility of mobile and desktop having an equal impact when it comes to sales. With this growth expected to continue, a key mindset for retailers in 2019 should be, “improve mobile, improve sales.”
Improving mobile means making mobile advertising more convenient and engaging for customers. This includes optimizing videos, navigation and checkout processes for small screens, as well as adding big navigation buttons, generous spacing, limited forms and dropdowns, and incorporating auto-sizing without autoplay. Advertisers who don’t strive to differentiate desktop and mobile experiences will ultimately create subpar mobile ads. Additionally, ad extensions in PLAs for mobile devices help make consumers’ search experiences easier.
Optimize PLAs to Drive Conversion
Product listing ads (PLAs) also excelled in 2018, influencing more conversions than in 2017. This was especially true on big shopping days like Cyber Monday. On these days, mobile PLA performance saw not only big jumps in impressions but in revenue as well. In 2018, mobile PLA impressions grew 113% YoY, with PLA mobile orders up by 152%, and revenue from PLAs on mobile jumping 239%.
What does this mean for retailers?
Optimize Your Feed
Maintaining and optimizing your product feed is critical to success, as the keywords in your feed are used to properly match products to search queries. Getting the right product to show for the right queries is both an art and a science.
It is vital to make use of product categories, as well as follow best practices for titles and descriptions. Ensuring appropriate keywords are in your title can go a long way toward improving your performance.
Don’t Use a One-Size-Fits-All Approach
Test different ads, review the data and identify what works. There’s no one-size-fits-all campaign structure out there; it’s essential to tailor each one to an advertiser’s specific strengths and goals.
Optimize Search Queries
Analyze KPIs on an ongoing basis. While several products may match to a particular query, retailers have little control over whether the right product is showing. Use advanced analytics and query-level architecture to funnel traffic to the right products, and away from unprofitable queries, to help you grow PLA revenue efficiently.
You must continually measure results and act accordingly. Be aware of real-time signals and data on factors such as competitor pricing, promotions and seasonality to make rapid changes in bids; this saves time and maximizes revenue. Because external forces like the marketplace, Google auction and competitors are constantly changing, it’s necessary to measure results and try new solutions to ensure the highest return on ad spend at every turn.
Take a Granular Approach
When developing and rethinking your PLA structure, creating specific ad groups for each individual retailer and brand can be extremely lucrative. Making the search query funneling more granular improves the relevance of search results and allows advertisers to consequently achieve higher revenue per click. This kind of enhanced PLA structure allows advertisers to be more efficient, grow revenue and use those savings to further invest in a channel for better results.
Take a Performance-Based Approach for Paid Social
Paid social represented one of the key channels of increased investment in 2018, with a 60% increase in paid social spend YoY. Notably, although Black Friday and Cyber Monday were the top pre-Christmas revenue drivers for social, the largest spike in YoY revenue growth was seen after Christmas. In the week following the holiday, revenues jumped 123% YoY, nearly double the growth seen across the rest of the season.
The 2018 data shows the importance of taking a performance-based approach in 2019. To truly measure success, reliable and accurate data is a must. Don’t just take data from one place, take it from every aspect of your campaigns, including first-party data, third- party data, Facebook (especially from the optimizing Pixel) and more. From this data, you can build a cohesive social strategy, constantly feeding data in and out and continuously evaluating ads for improvements.
Creative also plays an important role in a successful social strategy. To optimize visuals, use different formats, include vertical videos in ads,conduct tests to analyze performance and then iterate on findings.For best results with creative, be sure to employ A/B, multivariate or split testing as you continue to test different lifestyle and product variations in your images as well as various headlines and CTAs in your copy to find the top-performing combinations.
Success Requires an Omnichannel Approach
When planning your social media strategy, consider how social interacts with your other advertising channels. An omnichannel mindset ensures that every area of your social media investments are accounted for and planned to be as complementary as possible.
As retailers continue full speed ahead with their 2019 advertising programs, strategic investment in mobile, PLA and social advertising programs will be critical. The trends are undeniable, with mobile growing at a rapid pace and PLA performance skyrocketing. As such, emphasizing these areas, in addition to optimizing creative, will help facilitate better ads, more engagement and ultimately, a successful 2019 holiday season.
Adlucent is a digital marketing agency.