Traffic to Google Ads grew faster than conversions for e-commerce retailers in 2018, according to new research from Sidecar. The weakened conversion rates, coupled with rising CPCs, demand that retailers think in terms of the big picture as they navigate competition and add value to their marketing funnels in 2019.
Statistics, charts, and go-forward recommendations are available now in the 2019 Benchmarks Report: Google Ads in Retail from Sidecar. The annual report includes retailers’ performance benchmarks in Google Ads broken down by ad format, device, and across 14 retail verticals. Sidecar is also publishing supplements to the 2019 Benchmarks Reportthroughout the year on the company’s content hub, Sidecar Discover.
Strengthen the Top of the Funnel
Sidecar’s report found the conversion rate dipped by 1% YoY in Google paid search (text ads), and slid by 3% YoY in Google Shopping in 2018. At the same time, Google Shopping CPC averaged $0.57 in 2018, up from $0.55 in 2017 (+4%). Google paid search CPC increased even more, from $0.62 in 2017 to $0.71 in 2018 (+14%).
“As cost and competition rise on direct response channels like Google Ads, performance marketing in retail will become a battle for filling the top of the funnel with more targeted shoppers,” said Mike Farrell, Senior Director of Market and Customer Intelligence for Sidecar. “In 2019, retailers need to create a larger and more valuable upper funnel through channels like social, and fuse it to the bottom funnel, for a more cohesive approach overall.”
Drive Cohesion Across Google Ads
Sidecar’s report shows that cohesion is also critical within Google Ads. Paid search and shopping campaigns can each play a number of roles—new customer acquisition, customer retention, brand exposure, and others—depending on a retailer’s goals, product catalog, and competitive environment.
That’s why, for instance, verticals like apparel saw 29% more conversions on Google Shopping than on Google paid search. By contrast, verticals like office supplies saw 46% more conversions on paid search than Shopping. And still other verticals, like health & beauty, saw less than a percentage point difference in conversions on paid search versus Shopping. What’s more, within those vertical averages, marketers know every business is different.
“Google paid search and Shopping are each uniquely equipped to move consumers along the acquisition journey,” said Steve Costanza, Senior Analytics Consultant for Sidecar. “Retail marketers must get more granular in 2019 to understand where their customers like to research product categories, versus learn about specific items, versus buy those items.”
Data & Methodology
The 2019 Benchmarks Report: Google Ads in Retail is available now. The annual report includes retailers’ performance benchmarks in Google Ads broken down by
- Shopping ads vs. paid search ads (text ads)
- Mobile vs. desktop
- 14 retail verticals, including apparel, automotive, books/music/video, electronics, flowers & gifts, food & drug, health & beauty, house & home, jewelry, mass merchant, office supplies, pet care, sporting goods, and toys & hobbies
- Metrics including impressions, clicks, ad spend, conversions, revenue, return on ad spend (ROAS), cost per click (CPC), conversion rate, average order value (AOV), and click-through rate
- Showcase Shopping performance
- Local Inventory Ad performance
- Amazon’s impression share in major retail verticals
- Holiday KPIs, including conversion rates and revenue growth
- Cyber Five KPIs, including ad spend and impressions
Sidecar examined a representative sample of several hundred U.S. retailers that had active campaigns in Google’s paid search and Shopping channels for the full years of 2017 and 2018. Findings are based on Google Ads data. The analysis took place in January 2019.
- 2019 Benchmarks Report: Google Ads in Retail – http://bit.ly/2CqEeQd (All graphs can be re-published.)
- 2019 Benchmarks Report Supplements – http://bit.ly/2Tbp3jj
- Keeping Up With Google Series – http://bit.ly/2Cq2gdP
- Webinar: Why Now Is the Time to Cash in on Mobile Google Ads – http://bit.ly/2TbloSw
Sidecar is a technology company dedicated to retail. Our mission is to maximize the value of performance marketing. By combining deep data, knowledgeable humans, and inspired technology, Sidecar is the magic behind retail’s smartest marketing campaigns.