Paid Search Spending Increases Over Thanksgiving Weekend

By Rory Betteridge | 04 Dec 2014

Retailers have spent more than ever on paid search this Black Friday weekend, and it’s produced matching amounts of revenue.

Retailers this Black Friday were pouring more money than ever into paid search spending, and it paid off well.

Predictive marketing software developer Kenshoo reported yesterday that paid search in the US peaked over the Thanksgiving weekend, with retailers spending 18 percent more on paid search. Generally the investment paid off, with retailers benefiting from a 34 percent increase in revenue specifically from paid search.

Seasonal Paid Search Spend and Revenue

Tracking the numbers year-over-year for each day of the season, paid search spending on Thanksgiving Day was up 49 percent, raking in 54 percent more revenue; on Black Friday, spending rose 24 percent for a revenue increase of 42 percent, and Cyber Monday spending rose 18 percent to pull in 34 percent more revenue.

While spending on Thanksgiving and the days leading up to it saw marked increases in investment, the days thereafter saw retailers be relatively frugal.

“While investments increased across the board, it’s notable that both Black Friday and Cyber Monday saw the smallest YoY spend increases,” Kenshoo’s Kelly Wrather explains this. “At the same time, we saw advertisers consistently boosting spend on the immediate days leading up to Thanksgiving and the weekend following. As retailers release promotions earlier throughout the season due to consumer trends shifting, they are similarly upping paid search investments to reflect the evolution to catch early shoppers.

“Despite Black Friday and Cyber Monday seeing smaller YoY changes, both dates came out as the highest spending dates of the season thus far and saw higher yearly revenue upticks, which means positive ROI gains for retailers. So, don’t declare these key dates dead just yet.”

Increase in Paid Search Spend

Looking back on previous years, the spending on paid search has increased dramatically. Taking the daily paid search spending at the start of the season (three weeks before Thanksgiving) as a baseline, by Cyber Monday 2012 paid search was on average three times that of the baseline. This year, paid search spending was closer to double what it was in 2012; by Cyber Monday this year retailers spent more than eight times as much as they did that first day two years ago.

The National Retail Federation had a number of take-away points from the weekend, most notably the willingness of retailers to treat the season as one sustained effort instead of singular days of sales. The NRF also viewed the weekend as a sign of an improving economy.

“We remain positive about the future of sales for this holiday season, but it’s a marathon and not a sprint,” said the NRF’s Matt Shay. “Many consumers are far from finished with their shopping, and retailers are still working hard to earn every sale.

“As Ben Franklin once observed, “If you’re finished changing, you’re finished.” I happen to work in an industry that changes daily and is never finished changing how it provides the best value for its customers, its employees and the communities it serves.”

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