January 15, 2013, 10:57 AM

Paid search revenue jumps over the holidays

Kenshoo’s U.S. retail clients report a 23% increase in paid search revenue.

Amy Dusto

Associate Editor

Lead Photo

Online retailers worldwide increased their revenue from paid search this holiday season by 36% year over year, according to digital marketing technology company Kenshoo. The Kenshoo 2012 Global Online Retail Holiday Shopping Report includes data from more than 24 billion paid ad impressions and clicks on various search engines for the company’s clients between Nov. 1, 2011, and Dec. 31, 2012. Among U.S. e-retailers, paid search revenue over the holidays was up 23% year over year, Kenshoo says.

Other key findings for U.S. retailers in the Kenshoo report include:

  • Thanksgiving drew the highest average order values from paid search clicks of any day in the season, $150, up 19% year over year. The average order value for the holidays overall was $109.46.
  • The Monday after Thanksgiving, often called Cyber Monday, garnered 51% more paid search spending year over year, resulting in a 66% increase in ad impressions and a 57% rise in clicks.
  • Free Shipping Day, a marketing event that took place on Monday, Dec. 17, stood out as generating the highest conversion rate of any day at 4%, which Kenshoo says is a 45% increase from Free Shipping Day 2011, which was on a Friday.

Mobile phones in the United States generated about 6% of all paid search clicks over the holidays, up 20% from 2011, Kenshoo reports. The conversion rate from mobile phones, though, decreased from 0.87% in 2011 to 0.46% in 2012, accounting for only 2% of total paid search revenue, the report says, without offering an explanation for the decline. It may indicate shoppers were using their mobile phones more to check directions, hours and search for deals, rather than for shopping.

Meanwhile, tablets in the United States generated 8% of paid search clicks, 6% of total conversions and almost 7% of total revenue over the holidays, Kenshoo says. The average order value from paid search clicks on tablets was $105.50 this year, compared with $90.11 on phones and $97.34 on computers, it says. Kenshoo did not provide last year’s average order values.

According to research by IgnitionOne, another digital marketing technology provider, U.S. retailers are paying more for paid search on tablets versus smartphones as of the end of 2012, with spending on ads that will appear on tablets up 163% year over year compared with a 87% increase for phones. Together, phones and tablets accounted for 18% of total paid search spending in 2012, IgnitionOne says.

“Tablets have become a very important device for advertisers, especially retailers,” says Roger Barnette, president of IgnitionOne. “Smart marketers took advantage of the high level of engagement on these devices during the critical Q4 shopping season, and we will continue to see budget shifts to mobile campaigns in the new year.” 

Ten retailers in the Internet Retailer Top 500 Guide list Kenshoo as their search advertising provider. Two list IgnitionOne.

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