Leading to Black Friday, Retailers Increase Paid Search Spend 88% Over 2010

Posted by Ryan Hornacek, Analyst

In anticipation of holiday, Performics has been tracking key paid search metrics for our aggregate group of retailer clients through Q4.  Compared to the same week last year (10/30 to 11/5), our retailers are dedicating significantly more budget to paid search leading up to Black Friday 2011.  Retailers are attempting to capture market share in the weeks before Black Friday.  Over the last week (10/30 to 11/5) specifically, paid search spend is up 88% vs. 2010, and—as a result—paid search clicks are up 43%.

Marketers are counting on this spend increase to boost purchase frequency and accelerate new customer acquisition, which will be key factors in holiday revenue growth over last year.  We expect a competitive season for the retail paid search market and for the retail market as a whole.  And not surprisingly, more competition has already led to higher cost-per-clicks (CPCs).  Over the last week, CPCs were up 32% over last year.

The below graphs show the increases in cost-per-clicks and paid search spend vs. 2011.  As you can see, CPCs and paid search spend spiked starting the week of 10/30 to 11/5.  This is when retailers started to put the hammer down on paid search in anticipation of holiday.  Thanksgiving is Day 0 on the graphs.  This data is from our retailer clients only and includes all engines: