The Facebook-Google Duopoly still commands advertiser budgets, but Amazon is catching up
BOSTON — Nanigans, the leader in performance advertising software, today announced new research outlining how retailers plan to spend their digital ad budgets during the 2018 holiday shopping season. Based on survey responses from 100 senior digital advertising executives, the results indicate that retailers plan to invest more of their spend on Black Friday than any other day this holiday season.
“Nearly half of U.S. consumers now start their product search on Amazon, meaning the retail giant offers an attractive model for brands hoping to capture the attention of active buyers during the 2018 holiday shopping season”
Marketers revealed that a quarter of their annual ad budgets are used to target shoppers during Black Friday/Cyber Monday weekend. With total U.S. digital ad spend by retailers expected to exceed $23 billion in 2018, retailers plan to allocate almost $6 billion dollars in media toward this four-day period.
In terms of where advertisers are putting their dollars, the Facebook-Google Duopoly is the clear winner. Retailers indicated that Google Search and Display (35 percent) and Facebook (18 percent) dominate their planned channels, but Amazon is a close third (15 percent). This underscores the appeal of Amazon’s evolving online ecosystem to retailers, and reinforces the company’s growing momentum in digital advertising.
“Nearly half of U.S. consumers now start their product search on Amazon, meaning the retail giant offers an attractive model for brands hoping to capture the attention of active buyers during the 2018 holiday shopping season,” said Ric Calvillo, CEO and co-founder of Nanigans. “However, retailers’ decision to pump ad spend into Amazon may be shortsighted. The company has built an ecosystem that makes it both an attractive ecommerce ad platform and a retailer’s top competitor.”
Notably, marketers overwhelmingly value Black Friday itself over the Saturday, Sunday, or Cyber Monday that follow it, with 63 percent planning to prioritize ad budgets on that day alone. Conversely, just 20 percent of brands plan to spend more serving digital ads to Cyber Monday shoppers. This could indicate that marketers believe brick-and-mortar retail still plays a significant role in total holiday season revenue, or that Cyber Monday is an antiquated concept for consumers accustomed to regularly shopping online year round.
Additional key findings from the study include:
- More than half (51 percent) of retailers plan to keep 2018 holiday season ad budgets about the same as last year, while 48 percent plan to increase the amount they spend on holiday ads.
- Retailers don’t focus much of their holiday ad spend on last-minute shoppers, which could be a missed opportunity as it’s a pivotal time to generate brand exposure. Almost half (47 percent) prioritize early-season campaigns, 48 percent focus on prime-season buyers, and just 5 percent target late-season shoppers.
- Retail marketers plan to dedicate 14 percent of their campaign budgets to video ads during the 2018 holiday shopping season.
- 30 percent of retailers want to see higher ROI from their holiday ad spend, and 87 percent would reallocate some of this budget to other areas if they could. Specifically, 49 percent of respondents would reinvest their holiday ad spend in martech and adtech technology, if possible.
- 29 percent of marketers surveyed agree that they can’t change holiday ad spend strategy due to organizational leaders holding them back.
- For a majority of retailers, the holidays positively impact acquiring more customers with significant value, but the trade-off is the fact that 25 percent of marketers report dramatically higher cost of customer acquisition during this time.
- The holiday advertising season starts early for the majority retailers, with 64 percent of those surveyed implementing campaigns before Halloween.
About the Survey:
Partnering with Advertiser Perceptions, Nanigans commissioned an online survey of 100 retail digital advertising decision-makers with a title of Director or above. Each decision-maker represents a company that generates at least $100 million in online sales annually, earns at least part of its revenue from selling products online and allocates part of its annual advertising budget to the 2018 holiday shopping season. Respondents were polled during a three-week period in August 2018.
Nanigans arms marketing teams to drive incremental revenue with the most powerful and transparent cross-channel buying platform. Sophisticated commerce advertisers currently optimize more than $700M in annual ad spend through the Nanigans platform. Nanigans is headquartered in Boston with offices in New York, San Francisco, London, Singapore and Seoul. For more information on Nanigans, please visit www.nanigans.com.