Amazon’s Next Frontier: Local Advertising

Amazon’s Next Frontier: Local Advertising

Amazon

Amazon recently announced for the first time just how big Amazon Ads has become. And the number is very big. As in $31.2 billion. Amazon said in its in 2021 earnings announcement that Amazon Ads had achieved 32 percent year-over-year growth, which includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.

$31.2 billion is not quite the size of Meta’s and Google’s ad businesses. By comparison, Google achieved $209.5 billion in ad revenue for its most recent fiscal year, and Meta achieved roughly $115 billion for the same time period. But Amazon Ads eclipses Microsoft, Pinterest, and Snap, and the company has earned a place alongside Google and Meta as one of the big three online advertising platforms.

And now, it looks like Amazon plans to get bigger in an untapped market: location-based advertising. Business Insider reported recently that Amazon is building a local ad business by advertising positions for a Local Ads team in major cities such as Chicago and New York. Apparently Amazon Ads will offer a slate of ad units, including streaming TV ads and a demand-side platform that sells ads off Amazon’s website. (Note that Amazon generates the lion’s share of its ad revenue from search ads that appear on the Amazon website; but Amazon has invested more in ad tech to get bigger ad budgets from advertisers.)

This is an intriguing development, to say the least. Location-based advertising capitalizes on the fact that local searches by consumers are wildly popular. This is a big reason why hyper local sites such as Nextdoor have achieved strong growth: people typically look for things to buy at stores close to their homes. So, businesses have a strong motivation to rank well in those “near me” searches, and of course advertising can amplify their presence. Meta and Google both offer strong location-based ad services, but lately Meta has taken a financial hit because of the impact of Apple’s Application Tracking Transparency privacy controls, which limit the effectiveness of ad targeting, including location-based ad targeting.

According to a Deutsche Bank report from 2021, 75-percent of Meta’s advertising revenue came from small businesses. Meta could be vulnerable if Amazon’s plans are rolled out. And Amazon doesn’t have to worry about Apple’s privacy controls. The company can sell ads based on first-party data, or data that people on Amazon share when they search and purchase (Apple’s privacy controls do not affect first-party data). Now, consider the fact that Amazon operates brick-and-mortar businesses such as Whole Foods and Amazon Fresh, which rely on location-based advertising. An Amazon location-based ad service could benefit the company’s own stores.

But that’s not all. Just as Amazon sells online ads to merchants, the company is apparently banking on the ability to do that for retailers, automotive dealers, restaurants, and other merchants that need to be present in local search results.

For now, Amazon will continue to grow its ad business mostly through Amazon.com, where companies pay to be listed as a “sponsored product” high up in the search results. Amazon also offers video commercials and ads on Amazon’s FireTV device. Amazon Ads also helps brands with online advertising on sites that it does not own. And Amazon has developed advertising in devices and platforms such as Twitch.

It will be interesting to see how this development plays out especially with Walmart leveraging its own small but growing ad business that capitalizes on the company’s online/offline presence. Walmart could be a strong alternative to Amazon.

We recommend that advertisers manage the online ad solutions that are most relevant to their own customers’ journeys from awareness to purchase. Keep an eye on Amazon. The company has built incredible momentum, and an increasingly privacy-centric landscape favors the growth of its ad business.

Contact True Interactive

At True Interactive, we monitor new ad products all the time and help our clients prosper amid the evolving landscape. Contact us to learn how we can help you. Learn more about our Amazon Ads services here.

Why Google Is Integrating Search and Shopping

Why Google Is Integrating Search and Shopping

Google

Google is as big and influential as ever. But one of the downsides of being big and influential is that Google must fight battles on multiple fronts. We recently blogged about Google’s latest moves to combat the threat of TikTok. At Google’s recently conducted Marketing Live event, the company also took aim at Amazon.

Google versus Amazon

Google practically invented search. Google Search remains the engine that drives Google’s multi-billion dollar advertising business. When people use Google to search billions of times a day, advertisers want to appear alongside their search results. But, in recent years, Amazon has emerged as a powerful search engine all its own, especially for when people are searching for things to buy. Most product searches begin on Amazon, not Google. This is a problem for Google. When people search on Amazon, they search with intent to buy. And they’re not shopping as much on Google. Oh, and Amazon is building off that search activity to grow (impressively) the third largest online advertising business.

Google has been trying to change all that.

At Marketing Live, Google announced a number of developments intended to make Google a more attractive destination for shoppers. To wit:

  • Swipeable shopping ads in search. A new ad display pairs organic shopping results with shopping ads, which makes online shopping more visual. The new swipeable shopping feed is available for apparel brands via Search or Performance Max campaigns. These will be clearly labeled as ads and will be eligible to appear in dedicated ad slots throughout the page. This ad type is coming later in 2022.

A Google ad

  • Product feeds for a shoppable YouTube experience. Also at some point in 2022, advertisers will have the ability to connect product feeds to campaigns in order to create shoppable video ads on YouTube Shorts. With YouTube Shorts, people can quickly and easily create short videos of up to 15 seconds, similar to how TikTok and Instagram Reels are used. Shoppable video ads on Shorts helps Google capitalize on social shopping.
  • 3D models of products in Google Search: merchants will be able to have 3D models of their products appear directly on Google Search, allowing shoppers to easily see them in their spaces. In launching this feature, Google said that more than 90 percent of Americans currently use, or would consider using, augmented reality for shopping.
  • Promoting loyalty benefits. In the coming months, merchants will be able to promote their loyalty benefits to potential customers in the U.S. when they’re shopping across Google. Loyalty programs encourage repeat purchase. Google believes that integrating them into Google Ads will benefit retailers. According to Google, using Performance Max campaigns— along with a product feed — businesses will be able to drive more online loyalty sign-ups across YouTube, Display, Search, Discover, Gmail, and Maps.

A loyalty offer

These developments represent the latest wave of changes taking aim at Amazon. Another occurred in the third quarter of 2021 (more about that here). Google’s strategy is to capitalize on its reach. As popular as Amazon is, Google can rely on more touchpoints for advertisers to connect with consumers, ranging from YouTube to Gmail.

Google’s advertising business overall remains very strong although YouTube has been underperforming against analysts’ expectations. One of the reasons Google has grown so well is that the company does not rest on its laurels. The announcements from Marketing Live are evidence of that.

Contact True Interactive

All these developments are exciting, but It can be a challenge for advertisers to sort through the ever-evolving landscape. True Interactive works with businesses all the time to succeed with digital advertising, and that includes advertising in the Google universe. To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Photo by John Schnobrich on Unsplash

Why Walmart Connect Is Winning

Why Walmart Connect Is Winning

Walmart

For the first time, Walmart shared how much money its advertising business, Walmart Connect, is generating. And business is good. In announcing its quarterly earnings February 17, Walmart said that Walmart Connect achieved $2.1 billion in revenue in 2021. Why is Walmart Connect succeeding?

What Is Walmart Connect?

Walmart Connect is the name of Walmart’s advertising business. Walmart Connect creates targeted advertising by capitalizing on the customer data it has accumulated about search and shopping on Walmart.com and in Walmart stores. Walmart Connect offers many ad units. For example, Search Brand Amplifier makes it possible for a brand’s logo, a custom headline, and up to three of its products appear at the top of a web page (on Walmart.com), thus improving brand recognition and showcasing a company’s product portfolio.

What Did Walmart Announce?

In a conference call with Wall Street analysts, Walmart said that Walmart Connect is growing remarkably well. According to Walmart’s Chief Financial Officer Brett Biggs, “Walmart Connect advertising experienced robust sales growth this year with a strong pipeline of new advertisers and large growth opportunities ahead. In fact, the number of active advertisers using Walmart Connect grew more than 130% year over year. And about half of the ad sales came from automated channels in Q4, more than double last year. We expect Walmart Connect to continue to scale over the next few years with plans to become a top 10 ad business in the midterm.”

Why Is Walmart Connect Succeeding?

Walmart Connect is benefitting because the company relies on first-party customer data. Ad platforms that rely on first-party customer data are becoming more attractive as businesses such as Apple and Google make it harder for advertisers to capitalize on third-party customer behavior data to create online ads. First-party data is beyond the reach of these privacy initiatives. That’s a big reason why retailer-based ad businesses are flourishing – and Walmart is not the only one, as we blogged here.

Another reason for the success of Walmart Connect is that the company has offered automated advertising tools. As noted above, in a call with Wall Street analysts, Walmart said that half the advertising revenue in 2021 came through automated channels. This suggests that Walmart is doing a good job offering programmatic advertising — or the use of automated technology for media buying (the process of buying advertising space), as opposed to traditional (often manual) methods of digital advertising.

Although we don’t have any numbers yet, it’s also likely that Walmart’s physical stores will play a role in the growth of Walmart Connect. Walmart Connect sells ads on more than 170,000 screens — including televisions and self-checkout kiosk screens — located inside more than 4,500 U.S. stores. For example, TV Wall Ads provide placement of an advertisement on thousands of in-store TV screens in stores, with the goal being to influence shoppers while they’re making purchase decisions. Keep an eye on the in-store ad units. They are primed for growth as people become more comfortable shopping in stores post-pandemic.

What Should Advertisers Do?

  • Consider retailer-based ad networks as a complement to your existing digital ad strategy, not as a replacement. If your strategy focuses on Facebook and Google, for instance, don’t move your ad dollars over to a retailer network. Remember that Facebook and Google also already offer proven advertising products that capitalize on their vast user base. For example, location-based digital advertising tools help strengthen Google’s advertising services at the local level.
  • Work with an agency partner that knows the terrain. For instance, at True Interactive, we complement our history of helping businesses advertising on Google and social media with expertise across retailer ad networks such as Amazon and Walmart.
  • Learn more about the ad products that might apply to you – and those products are evolving. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site – meaning advertising across the web, as well as via connected TV.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here and our Walmart Connect expertise here.

For More Insight

Why Retailers Are Launching Ad Businesses,” Tim Colucci, January 11, 2022.

Walgreens Doubles Down on Its Advertising Business,” Tim Colucci, May 19, 2021.

How Google Is Growing Its E-Commerce Advertising Business

How Google Is Growing Its E-Commerce Advertising Business

Google

We all know e-commerce has exploded over the past 24 months. Google knows all too well. The surge in e-commerce was a boon to rival Amazon in terms of search traffic and revenue gained. But as we’ve reported, Google has also been working hard to fight back by becoming a stronger e-commerce player.  And it looks like Google is gaining ground, as a newly published report from Morgan Stanley suggests.

Morgan Stanley says that in November 2021, 57 percent of shoppers first went to Google platforms (including Search and YouTube) to research a new product, up from 54% in May 2021. In addition, the number of Amazon Prime subscribers turning to Google for initial searches increased to 56 percent from 51 percent in the same period.

This is good news for Google, whose core advertising business has been losing market share to Amazon Advertising. Google needs to keep eyeballs on Google in order to attract and keep advertisers. And people searching with intent to buy are incredibly valuable. Morgan Stanley predicts that Google will achieve 37 percent year-over-year e-comm/retail ad spend for fiscal 2021.

It’s interesting to note that according to online selling platform Jungle Scout, 74 percent of U.S. consumers begin their product searches on the Amazon.com site in 2021. It’s impossible to do an apples-to-apples comparison with Morgan Stanley’s numbers because Morgan Stanley counts YouTube searches, and Jungle Scout does not. This is a significant difference because YouTube is the second-most popular search site in the world next to Google Search.

That said, the numbers matter.

Morgan Stanley listed several examples of how Google has developed more e-commerce related features in 2021 alone:

Google e-commeerce

These examples stand out for us:

  • Making online searching and shopping more visually appealing by emulating the product display features you see on Amazon. For certain items such as apparel, Google will return search results with a product results that page that resembles a visual store, not a list of links and text descriptions.
  • Soon introducing a new way to search visually, with the ability to ask questions about what you see. According to a Google blog post, “With this new capability, you can tap on the Lens icon when you’re looking at a picture of a shirt, and ask Google to find you the same pattern — but on another article of clothing, like socks. This helps when you’re looking for something that might be difficult to describe accurately with words alone. You could type ‘white floral Victorian socks,’ but you might not find the exact pattern you’re looking for. By combining images and text into a single query, we’re making it easier to search visually and express your questions in more natural ways.”
  • Including in search a feature, “Things to know,” that will make it easier to explore and understand new topics. For example, if a person searches for “acrylic painting,” Google understands how people typically explore this topic, and shows the aspects people are likely to look at first though “Things to know.” Google says it can identify more than 350 topics related to acrylic painting in this example.

These advances are typically fueled by artificial intelligence applications such as multitask uniform model, an algorithm designed to provide answers to complex queries by concurrently assessing information across multi-language text, images, video and audio.

The next milestone: Google’s parent Alphabet reports fiscal 2021 earnings on February 1. Let’s see how well Google’s ad revenues look.

What Advertisers Should Do

  • Capitalize on Google’s advertising tools that are designed to be more visually appealing. For instance, Google recently rolled out Discovery ads, which are image-rich ads designed for a more “laid back” search experience (more about that here). Google is clearly doubling down on the visual web, and advertisers should expect more visually appealing ad products as it attempts to become a stronger e-commerce player.
  • Make use of more tools that make it easier to connect online searching and shopping. Google isn’t the only company figuring out search and commerce. Instagram is another, as we discussed in a blog post recently. And there are many more apps doing the same thing.
  • Do a gut-check with your organic search team. How well are they aligning content with visual search, for example? How will Google’s “Things to know” feature affect the depth and breadth of content that you provide on your website, Google My Business listing, and elsewhere?
  • Keep your eyes open and your budgets flexible. The online advertising space is getting more competitive and interesting for retailers. We have been blogging about the rise of Amazon Advertingfor some time – as well as the growth of advertising services from retailers such as Macy’sWalmart, and Walgreens. They’re all using their first-party customer data to build online advertising platforms. Depending on your target audiences, they may provide very competitive alternative to Google – an example being Macy’s for fashion-conscious shoppers or Walmart for advertisers whose audience aligns with Walmart’s multi-channel customer. (And we can help you succeed on all these platforms.)

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Image source: https://pixabay.com/photos/eye-google-detail-macro-face-1686932/

Why Retailers Are Launching Ad Businesses

Why Retailers Are Launching Ad Businesses

Advertising

Best Buy recently announced the launch of Best Buy Ads, a new in-house media company. Best Buy Ads offer a range of ad units including paid search ads, onsite and offsite display ads, onsite and offsite video ads, social ads, and in-store ads. According to Best Buy, Best Buy Ads capitalizes on the fact that Best Buy interacts with its customers three billion times a year. From those interactions, Best Buy learns about the search and shopping habits of its customers. This makes it possible for the retailer to sell ad units that target a specific demographic: people with a strong interest in consumer technology.

Best Buy is the latest retailer to launch an ad business. Other examples include:

  • Walmart Connect, the leading ad business run by a brick-and-mortar retailer.

As with Best Buy, they offer services ranging from display to media buying. They all have one thing in common: they monetize their customer data.

Why an Ad Business Appeals to a Retailer Like Best Buy

An online advertising business is appealing to Best Buy for a number of reasons, including:

  • This is a proven model. The growth of Amazon Advertising (Amazon’s own in-house ad operation) speaks for itself. Amazon Advertising is so successful that Amazon is now challenging Google’s and Facebook’s dominance of online advertising. In light of this, we’ve witnessed a slew of retailers jumping into the ad business. For example, Walmart Connect (Walmart’s ad operation) has enjoyed strong growth.
  • Customer data is a competitive weapon. Retailers such as Best Buy collect a treasure trove of data about their customers, starting with their search and shopping preferences. This data gives each retailer an edge because they can promise advertisers access to a targeted audience with intent to buy. As noted, Best Buy targets consumers in the market for home electronics. By contrast, the recently launched ad platform from retailer Macy’s targets a fashion-conscious consumer. Walmart promises entrée to grocery shoppers and price-conscious consumers. Of course, retailers must know how to mine all this data and then develop attractive ad units. But the data provides a built-in advantage.
  • Retailers’ customer data is getting more attractive to advertisers. Businesses are looking for alternative ways to reach consumers amid the demise of third-party cookies, which are crucial for third-party ad targeting, and the advent of stricter consumer privacy controls on Apple’s iOS, which has also made it harder for businesses to target consumers with ads. With third-party ad targeting across the web threatened, platforms that give advertisers entree to shoppers within retailers’ walled gardens are more appealing. Basically, retailers are using their own customer data to do what Apple and Google won’t do for advertisers anymore.
  • e-Commerce is booming. Online ad businesses in particular are catching fire because of the e-commerce boom. According to S&P Global Market Intelligence, “The e-commerce industry is expected to hold on to pandemic-elevated sales into 2022, with big retailers including Amazon.com Inc. and Walmart Inc set to benefit as consumers stick to new, hybrid shopping patterns.” S&P Global Market Intelligence says U.S. e-commerce sales are on track to exceed $1 trillion for the first time in 2022. Businesses want to reach those shoppers, which creates a demand for online advertising. The surge in online commerce also means more people are using retailers’ sites to search and shop, which creates more valuable customer data that retailers’ ad businesses can monetize. This also means advertising.

What Advertisers Should Do

  • Consider retailer-based ad networks as a complement to your existing digital ad strategy, not as a replacement. If your strategy focuses on Facebook and Google, for instance, don’t move your ad dollars over to a retailer network. Remember that Facebook and Google also already offer proven advertising products that capitalize on their vast user base. For example, location-based digital advertising tools help strengthen Google’s advertising services at the local level.
  • Do, however, monitor the effectiveness of your advertising on Facebook and Google amid the demise of third-party cookies and the onset of Apple’s App Tracking Transparency, which includes more privacy controls that may make Facebook ads less effective (which remains to be seen).
  • Work with an agency partner that knows the terrain. For instance, at True Interactive, we complement our history of helping businesses advertising on Google and social media with expertise across retailer ad networks such as Amazon and Walmart.
  • Learn more about the ad products that might apply to you – and those products are evolving. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site – meaning advertising across the web, as well as via connected TV.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

For More Insight

Walgreens Doubles Down on Its Advertising Business,” Tim Colucci, May 19, 2021.

Amazon Unveils New Ad Units Across Its Ecosystem,” Kurt Anagnostopoulos, May 4, 2021.

Why Macy’s Launched an Advertising Platform,” Tim Colucci, March 3, 2021.

Walmart Asserts Its Leadership in Advertising,” Tim Colucci, February 8, 2021.

2021 Holiday Ads: Hope and Realism

2021 Holiday Ads: Hope and Realism

Advertising

Ready for some memorable holiday ads? In response to widely reported supply chain issues, some brands have teed up their holiday ads to come weeks ahead of traditional schedules. And as was the case last year, the campaigns are tasked with addressing the elephant that hasn’t left the room: Covid-19 and its lingering effects. If striking the right tone somewhere between hope and realism can be tricky, a few reliable themes — from connection to music, humor, and cheer — are helping brands thread that needle. Here are some examples:

Connection

We may live in divided times, but Etsy’s hopeful Give More Than a Gift campaign for 2021, which highlights unexpected connections, reminds us of our best selves. In one spot, a friendship springs up between two people from different walks of life. The tightly edited ad runs a mere 30 seconds, but it packs a wallop. The e-commerce company’s focus on unique, handmade items figures into the story, and the implicit message — that Etsy’s constellation of DIY sellers may help shoppers avoid the headache of larger retailers with supply chain issue delays — doesn’t hurt the brand, either.

Music and Surprise

The right music is key to a successful ad campaign, and brands have long been incorporating modern interpretations of classic hits in hopes of connecting with shoppers on a nostalgic level. In fact, according to Chelsea Gross, director analyst at research firm Gartner, nostalgia is particularly resonant this year as consumers potentially gather with loved ones after a year or more of pandemic-era separation.

For financial reasons, advertisers don’t always use the original song. It’s also worth noting that employing a cover can also add a unique spin, beyond the song’s original interpretation, to a nostalgic favorite. Consider the spot from Dutch e-tailer Bol.com, which is set to a cover of Cyndi Lauper’s “True Colors.” In the ad, a boy who originally asked for a doll turns the soccer ball he got instead into an imaginary friend. Cue all the expected cozy feelings — but Bol.com is mining a different theme here, and an unexpected twist at the end of the spot gives Lauper’s familiar song added resonance. (Spoiler alert: this kitten has claws!) By subverting expectations — of a familiar song, of a storyline that, at least initially, seems familiar — the brand grabs our attention.

For a brand like Amazon, deep pockets can mean the freedom to use a song in its original incarnation. This year, the e-commerce giant debuts “Hold On” from Adele’s new album 30; the song hits a home run on several levels, playing backdrop to a spot that doesn’t shy away from the lingering challenges people face from the pandemic. The storyline isn’t overtly festive: two women share a quiet connection over their love of birds. But the ad, which is aligned with the launch of Amazon’s Christmas gift shop, covers a lot of ground, addressing mental health, loneliness, and the power of connection in a subtle two-and-a-half minutes.

Humor

Like Amazon, Extra gum isn’t afraid to look at the curveballs life can throw, but it takes a different tack, using humor to lean into some inconvenient truths about the holidays. As Extra spins it, while it’s great to be gathering for the holidays in a way 2020 simply didn’t allow, some time-honored traditions — from passive-aggressive presents to long-winded relatives — remain as tricky as they ever were before the pandemic. The solution? “Chew it before you do it.” In other words, chewing a piece of Extra gum can give that extra moment of pause, and transform a potentially awkward moment into a time of grace and connection. And who can argue with that?

Cheer

Of course, holiday ads for time immemorial have succeeded by tugging on the heartstrings, and a few notable campaigns from 2021 take that approach and run with it. Consider the McDonald’s U.K. ad that introduces us to a little girl and her imaginary monster friend, who bond over the Christmas ritual of leaving out bags of McDonald’s carrots as treats for Santa’s reindeer. Time passes (a cover of Cyndi Lauper’s “Time After Time” plays in the background – apparently 2021 is Cyndi Lauper’s year), and we think the girl has outgrown her joyful friend. But — spoiler alert! — you might need to pull your hanky out. Some friendships are meant for the long haul.

Finally, consider Apple’s spot, which was filmed with an iPhone 13 Pro by the father-and-son team of Ivan and Jason Reitman. The three-minute short follows the efforts of Olive, a little girl determined to keep her snowman buddy alive all year ‘round. An unexpected finale doesn’t quite cue up as expected, but the overall vibe — and a dedication to the ones we’ve waited all year to be with — goes for the feels in a big way, and succeeds.

Contact True Interactive

Looking to navigate the nuances of a complex world and connect with audiences via digital? Contact us. We can help.

Consumer Shopping Trends for the 2021 Holiday Season

Consumer Shopping Trends for the 2021 Holiday Season

Amazon Google Social media

What does the holiday shopping season hold for businesses? We have already heard plenty about the potential problems that a global supply chain crisis will pose. They include product shipping delays, bare shelves, and higher prices. But how are consumers planning to research and buy as the shopping season kicks into full gear? A recently conducted webinar by ChannelAdvisor, “Navigating Online Consumer Behavior: 2021 E-Commerce Trends and Forecasts,” provided some answers.

ChannelAdvisor and Dynata surveyed 5,000 global consumers to learn how they are shopping this holiday season, including 1,000 U.S. consumers. ChannelAdvisor also relied on secondary research from sources such as eMarketer. Here are some major takeaways:

E-Commerce Is Exploding

eMarketer data

 

Chart showing people shopping more

E-commerce has accelerated by two-to-three years as a percentage of total retail sales. ChannelAdvisor says that the accelerated pace will continue for the next few years. That’s because Covid-19 forced more shoppers online. Nearly 60 percent of consumers are shopping online more frequently than before the pandemic, and 32 percent of U.S. consumers have more confidence shopping online than they did before the pandemic. A whopping 58 percent of consumers are spending more time on Amazon.

Key takeaway: businesses should expect the major ad platforms such as Amazon, Facebook, Google, Instagram, Snapchat, and TikTok to integrate advertising and commerce more aggressively. We recently saw Google make it easier for shoppers to find products through visual search and display. TikTok continues to launch new shopping features. It’s important that businesses capitalize on these opportunities to capture revenue in these moments when people are searching and browsing on digital.

Get Ready for a Strong Holiday Shopping Season

A chart showing people shopping online

Holiday shopping is increasing in 2021

More than half of U.S. consumers will shop online more than before the pandemic. By contrast, 38 percent of U.S. consumers said they’d shop more online when they were surveyed in May 2020. And 37 percent of U.S. consumers expect to do more holiday shopping online compared to 2020. Only 6 percent of shoppers will shop less.

This finding is not surprising. We saw that even during the hardest days of the pandemic when the world faced economic uncertainty, consumers were willing to open up their pocketbooks and spend. But as ChannelAdvisor noted, much of that spending happened online.

Key takeaway: it’s going to be a busy holiday shopping season, and savvy advertisers are already ramping up their holiday shopping advertising. According to Deloitte, consumers will spend 9 percent more this holiday season compared to 2020. A new survey from JLL says that consumers plan to spend an average of $870 per person on holiday expenses this year, a 25.4 percent increase from last year. Consumers are ready to shop. On the downside, if the global shipping crisis is as bad as economists say it’s going to be, those consumers may experience the disappointment of product shortages. So advertisers are encouraging people to shop sooner while inventory is in stock.

Amazon and Google Dominate Product Research and Purchase

 

Research online

Purchase online

Amazon is the Number One destination for people to research product: 41 percent use Amazon to research products. Google, though, is a strong second place finisher. Amazon has built strong trust because when people are checking reviews, prices, and product inventory, Amazon gives them one easy place to do all that. During the holiday shopping season, even more consumers will do research on Amazon, and  65 percent will purchase on Amazon.

Key takeaway: capitalizing on Amazon Advertising products is a must if you want your brand to be visible when shoppers are doing deep product research. But don’t shift your ad budget from Google if you’re already a Google Ads customer. A two-pronged approach works best.

Social Media Is More Important for Younger Audiences

 

chart showing Instagram usage

People buying on social

Social is the key research channel for younger audiences. 53 percent of 18-to-25 year olds have researched products on Instagram. 51 percent have discovered products they purchased on social media sites. Facebook remains a strong source of product research for 26-to-35 year olds. Meanwhile, 30 percent of 26-to-45 year olds will do the majority of their holiday purchasing on social sites.

Key takeaway: although social media sites lag far behind Amazon and Google for product research, they index high for Millennial and Gen Z shoppers. Given the popularity of Instagram as a shopping destination, it’s important that advertisers capitalize on Instagram ad products such as Instagram Shop to reach younger shoppers. Essentially, Instagram ad products make it possible for businesses to turn posts and stories into ads. Instagram also makes it possible to create ads across Instagram and Facebook, which sounds very efficient – but remember that what works on Instagram might not be as effective on Facebook because Facebook appeals to a slightly older audience.

For more insight into holiday shopping trends, read a recently published True Interactive post, “How Retailers Can Prepare for the Holiday Shopping Season.”

Contact True Interactive

To maximize the value of your holiday shopping ad campaigns, contact True Interactive. We help our clients create effective online advertising all year-round, including the holiday season, and we understand the nuances of creating effective holiday ad campaigns.

Photo by Jakob Owens on Unsplash