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2020 Holiday Spend Report: October eCommerce

Published: November 12, 2020

Author: Jessica Guedes


2020 Holiday Spend Report: October eCommerce

Ad Engagement Increased in the Early Season

Sr. SEM Strategist Shawn Grenald contributed to this report.
In our 2020 Holiday Retail Guide, 3Q’s Growth Sciences team predicted that advertisers would begin to ramp up holiday spend much earlier this year because of a combination of COVID-19 behavior shifts and November election spending.
We crunched October numbers (both paid search and Facebook/Instagram) from five major eCommerce clients (who are representative of 3Q’s full eCommerce portfolio) and compared them to October 2019 numbers. That prediction of earlier was borne out, and an even more significant finding is dramatically increased engagement up the funnel, in Facebook, and Instagram campaigns.
Let’s dig into the data.

1) Paid search and paid social spend is (way) up.

Year over year, the five eCommerce clients averaged 76% more paid search spend and 87% more Facebook and Instagram spend in October 2020.

2) CPCs and CPMs are not experiencing increases commensurate with spend.

The five eCommerce clients averaged a paid search CPC increase of 12% in October 2020, although one outlying client discovered CPC efficiency through heavy adoption of automated Google features, including Smart Shopping. For Facebook and Instagram, year-over-year costs are nearly identical, and year-over-year CPMs are down slightly, though they’re normalizing after experiencing lows early in the pandemic.
The upshot is that to this point, advertisers should be smart yet aggressive about paid search and Facebook/Instagram investments for Q4.
We’ll continue to break down data for November and for Q4 in total, so stay tuned!

3) Facebook and Instagram engagement has increased dramatically.

While Facebook and Instagram investment is up 87%, website traffic from those campaigns is up 137%, which suggests that users are more inclined to engage with ads and navigate outside of the Facebook/Instagram ecosystem. This assumption is supported by the 13% YoY increase in CTR on the same channels, which shows a continuation of behavior since the start of the pandemic.
Users are consuming more media and shopping more online, and we recommend that our clients continue to prioritize disruptive creative and capitalize on a more intent-driven audience this holiday.

4) Down-funnel metrics are not following suit.

While paid search spend is up 76%, conversions have increased less precipitously, with October 2020 yielding 41% more conversions than October 2019.
For Facebook and Instagram, CVR is down 76% year over year, and ROAS is down 36%, perhaps in part because of high unemployment rates.
Our recommendations based on these metrics: lean into the entire consumer experience, with optimized landing pages, ad copy that highlights value props like free shipping and easy returns, and a product mix that addresses consumer spending budgets that may have decreased in 2020.
Contact 3Q Digital for more information about working with our in-house Creative Services and Paid Social Media Advertising teams.


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