Retailers shift their ad spending from TV, radio and print ads to digital ads.
A new report pegs the value of shoppers acquired via those ads.
While some large marketers like General Motors have said they fail to see the value in advertising on Facebook, that doesn’t mean that the advertising format can’t prove worthwhile for some retailers.
The average lifetime value of a consumer acquired via a Facebook ad spends 30% more with that retailer in her lifetime than the average shopper acquired via Groupon, and 8% more than a consumer acquired via a Google ad, according to a new report from e-commerce technology vendor RJMetrics. However, the report did not factor in the ad formats’ conversion rates, so it stops short of estimating the cost-effectiveness of the various formats.
The report, which also examines how flash sales, daily deals and group-buying sites impact retailers’ bottom lines, is based on sales data from 48 of the company’s e-retailer clients.
The report says that customers of daily deal, group buying and flash sale sites purchase nearly twice as frequently, on average, as shoppers at traditional online retailers. Shoppers return to make a purchase from a daily deal sites, on average, 48 days after their initial purchase. The average span for flash sale sites is 49 days, for group buying sites 52 days and traditional online retailers 89 days.
However, despite the longer lag between purchases, shoppers at traditional online retailers spend more per purchase. Those shoppers spend, on average, $105 per purchase, compared with $82 at group buying sites, and $61 at both daily deal and flash sale sites. Part of the reason for that is ingrained buying patterns, says the report: “Buyers at traditional retail sites tend to group more items into single orders, potentially to save on shipping costs.”