The following data is excerpted from the 2020 Benchmarks Report: Google Ads in Retail.The report, now in its fourth year, analyzes Google Ads data for a representative sample of over 300 U.S. retailers across 14 verticals. It is the most comprehensive look at Google Ads performance, trends, and strategies for 2019 and beyond. Download the complete report.
Efficiency & Incremental Growth Dominate Retailers’ Tactics
With greater competition than ever before on Google Ads, many retailers are no longer seeing the massive sales gains of the past. Instead, they are developing targeted strategies to reach their most valuable audiences and drive consistent, incremental revenue.
To that end, retailers realigned their Google Ads budgets in 2019. They increased Google Shopping spend 7% year over year while pulling back on Google paid search spend 8% year over year. The shift exemplifies the changing roles of these two channels in retailers’ customer acquisition strategies.
In 2019, retailers increased spend in Google Shopping because of its unique ability to reach shoppers immediately before a purchase. Many retailers dedicated more of their budgets to branded Google Shopping campaigns to engage low-funnel shoppers who are more likely to convert.
“Google Shopping tends to drive a lot of revenue for retailers because it engages shoppers immediately before a purchase, while paid search engages shoppers earlier in the journey. Both play an important role in driving the final purchase, and we saw those roles become more defined in 2019.”
– Sandie Shin, Director, Customer Strategy, Sidecar
On paid search, retailers focused on efficiency, limiting the number of keyword bids and focusing on their most valuable products and terms. Despite the reduction in spend, retailers were able to achieve similar revenue growth as 2018. This demonstrates that a more granular approach can deliver the same or even better results for retail marketers on Google paid search.
Mobile Drives Revenue Growth Across Google Ads
Despite increased competition and greater saturation on both Google Shopping and Google paid search, mobile revenue grew substantially across the channels. In 2019, revenue increased 17% year over year on mobile shopping ads and 18% year over year on mobile paid search ads. ROAS also increased on these channels, up 3% on Google Shopping and 13% on Google paid search year over year.
In addition, mobile captured the majority of clicks on both channels, making mobile ads an invaluable avenue to engage shoppers throughout their shopping journey. In particular, consumers tend to conduct the majority of their product research on their mobile devices. In Google paid search, mobile ads accounted for 57% of clicks, while in Google Shopping, mobile ads captured 69% of all clicks.
Marketers have prioritized mobile not just because of the large traffic volume but also because of its efficiency. On both Google Shopping and Google paid search, CPCs were lower on mobile devices than desktop in 2019. That makes these ads particularly valuable in achieving retailers’ efficiency goals and reaching shoppers earlier in their shopping journey.
Read More About the Changing Roles of Shopping & Search
Get the performance marketing benchmarks you need for 2020. Download the 2020 Benchmarks Report: Google Ads in Retail and learn how you stack up against other retailers in your vertical, how to navigate Amazon’s growing presence in Google Ads, and about seasonal opportunities that you can take advantage of throughout the year.