This year we launched the Market Observer to help the PPC community monitor cross-industry Google Ads performance in volatile times, opting for weekly and later bi-weekly updates during COVID-19 lockdown. As the frequency of noteworthy occurrences has slowed down, we will focus on bigger chunks for our analyses. Click here for past analyses.
At an aggregate level, CPCs for Google Shopping and text ads are continuing a weekslong YoY downward trend, most recently at -18.5%. While the details vary per industry, there are no major exceptions to the trend, but rather variations on it: for example, consumer electronics exceeds the average decrease at -30% while health & beauty remains a bit closer to the 2019 benchmark at -11%.
With lower CPCs and many commercial activities limited to online by physical store closures, it’s no surprise to see a run on costs across most advertisering verticals. This in turn has yielded strong weekly developments in YOY impression and click volume.
But how are those clicks performing? Conversions remain a bit more variable at the moment, recently trending downward. Looking at click-through-rates and conversion rates, we can see this outcome is due to weekly decreases in YoY conversion rate performance, , finally sinking below the YoY benchmark in Week 17. It’s certainly possible that advertiser spend is currently beginning to outpace consumer demand. Additionally, it could well be that consumers stuck at home are starting to shop in a more casual or passive manner, potentially losing willingness or cash reserves to buy non-essential items as the crisis prolongs.
Whether this downward trend in conversion rates will continue remains to be seen. Check back weekly for the latest metrics and at least bi-weekly analysis
Compared to last week we can't spot any further developments which aren't already covered by our last analysis. The developments are slowing down and therefore we will publish our analysis in a bi-weekly schedule until further notice. We are still constantly surveying everything and will of course let you know immediately if something is up.
At an aggregate level, Google Shopping and paid search have continued an enjoyable weeks-long decline in average CPC. However, the COVID-19 conversion bubble seems to have burst – despite elevated YoY impression and click volumes. This development has been driven of course by a downward trend in conversion rates, which had spiked immediately after lockdown but then slowly deflated every week since. This strongly suggests that consumer urgency and purchasing intent is diminished, perhaps reflecting a decrease in non-essential shopping as unemployment rates remain at historic highs. As European economies increasingly ease out of lockdown, it could be that conversion rates will improve in coming weeks.
Note that these trends will vary according to industry and geography among other factors. For fascinating examples, have a look at Health & Beauty or Pet Care in Shopping – or alternately, Pharmacy or Tickets & Events in paid search.
Travel & Hotels – Search
Welcome news in the booking industry: conversions are rising out of their YoY depression, driven by seasonal demand and softening of lockdown measures in many European countries. While impressions remain notably down, they are rallying and are supported by high YOY click-through-rates. The bad news: average CPC swung from far below to far above the YoY benchmark as advertisers fight for clicks. Look for changes in consumer behavior such as reduced international and increased domestic bookings, which might be highly relevant for ad targeting and keyword strategies.
Consumer Electronics – Shopping
CPCs have been relatively stable for weeks in the electronics sectors, seeing 30-34% reductions YoY. Unfortunately, conversion rates have finished a full month of sharp decline – with the result that conversions finally dropped below the 2019 benchmark for the first time last week. Impressions, however, remain very high. This suggests that consumer interest is there, but that the economic picture might be preventing purchases.
Fashion – Shopping
The last two weeks have seen some favorable developments in fashion for Google Shopping. This includes a sharp drop in average CPC YoY, reaching a recent historical low, plus an uptick in impressions. Offsetting these developments, however, are CTRs that have improved relative to the 2019 benchmark but remain subdued, and declining conversion rates. Still, the outcome remains quite positive, with conversions up 26% YoY against a 12% increase in costs.
Health & beauty – Shopping
YoY impressions remained sharply elevated the last two weeks with average volume twice as high as that observed in 2019. Moving down the funnel, subdued click and conversion rates yielded overall a 41% YoY increase in conversions. Considered against an YoY cost increase of only 18%, the picture looks reasonably rosy for the Beauty sector.
Furniture & decoration
CPCs have held a relatively stable range during the COVID-19 crisis but reached a recent low last week at -22.5% YoY. Impressions and clicks fell from a peak in the first week of June, yet remain elevated – and so do costs, suggesting retailers remain quite motivated to buy what traffic they may.
Industrial & machinery
Jumping to B2B, the industrial sector saw interesting movement in costs the past two weeks: CPCs leaped up by 21% and 32% YoY. Actual costs have been erratic in recent months – along with most other KPIs in this sector – but also saw peaks the last two weeks. On the bright side, conversion rates were up sharply, suggesting the budget has been well-spent.