2016 Holiday Planning Starts With Lessons From 2015
It’s never too early for retailers to start prepping for the holiday shopping season, even though they've just put a cap on their 2015 efforts. In fact, the proximity to 2015 campaigns could provide a base for 2016 strategies via important lessons learned. A quick glance at Kenshoo’s 2015 Online Retail Seasonal Report shows a few trends worth carrying forward this year. For instance, by increasing digital marketing budgets to engage holiday shoppers, retailers scored healthy revenue gains — particularly from shopping campaigns and new types of social ads — despite competition for consumer attention at peak levels.
Taking a closer look, the report finds that compared to the 2014 holiday season, marketers boosted their investments across the board, with the largest increases in digital marketing spend coming in mobile search and mobile product listing ads (93 percent and 111 percent, respectively), and social advertising (61 percent). In return, marketers were well rewarded. Search advertising sales revenue in the U.S. jumped 15 percent from 2014, while search revenue in the U.K. surged 35 percent. Growth in revenue from U.S. advertisers came squarely from an increased volume of conversions, as average order size remained almost exactly the same.
Big Lessons From 2015
Here are the primary trends from the 2015 holiday season that retailers should be aware as they prepare for this year's holidays:
- Shopping campaigns enrich order sizes: The performance of shopping campaigns — which helped advertisers drive their highest order values in paid search — is especially noteworthy. Despite producing less than 10 percent of total conversions, the average order size for shopping campaigns was more than three times that of nonbrand keywords, with a cost per click of about 25 percent less. On mobile, order size was almost 10 times greater than that of nonbrand mobile keywords.
- New social ad types accelerate value: Performance was also lucrative for advertisers that leveraged new types of social ads, such as Instagram ads and dynamic product ads (DPAs) in the Facebook News Feed. Although year-over-year engagement rates for social ads dropped slightly, the average order value skyrocketed from $52 to $121, raising overall advertiser sales revenue 114 percent and increasing return on investment for social by 33 percent. During the 2015 peak season, DPAs garnered the highest average order size (more than $160) and ROI across Facebook ad types. This demonstrates how marketers are using new ad types to better target and engage consumers.
- Mobile catching up: In the digital marketing mix, mobile is clearly gaining importance, but still has some catching up to do when it comes to conversions and sales attributed. Branded desktop keyword searches represented 31 percent of e-commerce conversions and 41 percent of advertiser sales during the 2015 holiday season. Meanwhile, mobile keyword searches (brand and nonbrand) comprised 27 percent of conversions and just 16 percent of advertiser sales revenue.
Looking Towards Holiday 2016
The 2015 holiday season was a success for retailers in driving volume and performance. As they begin making plans for this year's holiday season, they can look to the key trends from 2015 to inform their digital marketing strategies. Expect shopping campaigns and diversified social ad types to play a key role again in 2016, even as marketers continue to explore new ad types and publishers, as it’s equally important to keep a close eye on the entire digital ecosystem. Ultimately, paying attention to how customers experience brands across all channels and formats is the key to ensuring the best experiences for those customers and the best conversions for the company.
Kelly Wrather is the senior manager of content marketing for Kenshoo, a provider of agile marketing solutions. Kelly can be reached at kelly.wrather@kenshoo.com.
