3 Marketing Trends to Capitalize On This Holiday Season

Retail can be one of the most innovative sectors in advertising. The highly competitive nature of this industry keeps marketers both on their toes and also open to trying new approaches. With the holiday shopping season upon us, understanding the key themes identified in Kenshoo’s Quarterly Trend Report can provide some last-minute campaign optimization tuning that should prove useful to retail advertisers.

Trend No. 1: Product Ads Predicted to Be Huge in Q4

Product ads have been growing as an ad format in both search and social advertising for some time. These ad types — including Google Shopping Campaign Ads (formerly Product Listing Ads) and Facebook Dynamic Product Ads — are driven by product feeds that may contain hundreds, thousands or millions of SKUs. They offer efficiency as advertisers can connect product feeds to these platforms generating ads “on the fly” as needed, with the correct project headline, image, etc.

Last year, the lift from Q3 to Q4 on product ads exceeded 70 percent for both search and social. With a similar positive trajectory, product ads for this year’s holiday shopping season will deliver the biggest quarter in the history of the category.

Because search and social are both auction-based channels, advertisers gearing up for product ads to be a big part of their Q4 strategy should watch their campaigns carefully throughout the season so they aren’t outbid by competitors on key items and product categories.

Kenshoo’s Q3 2018 Quarterly Trend Report

Trend No. 2: Incredible Opportunity in Mobile Search Product Ads

Product ads for search marketers rose to prominence on desktop as a feed-driven alternative to manually creating “non-brand” keyword campaigns. At that time consumers would research on a mobile device, but preferred to check out on desktop.

However, for e-commerce advertisers, showing product ads in mobile search results has become a crucial part of their media portfolios. Retailers feel confident that today’s consumers are researching and purchasing via a mobile device.

In Q3 2018, mobile shopping ads on search accounted for 58 percent of total e-commerce impressions in the channel, as well as 46 percent of clicks and 22 percent of spending. This means that mobile product ad clicks, on average, cost less than half of comparable desktop ads. This implies that auctions aren't yet saturated with advertisers and indicates retailers can jump on these ads in Q4 and reap the benefits of a still-growing channel.

Kenshoo’s Q3 2018 Quarterly Trend Report

Another important piece of this puzzle: the clickthrough rate (CTR) of mobile product ads for search has stayed consistent throughout the year, demonstrating that consumers continue to engage with these ads even as inventory has more than doubled year-over-year. In other words, the quality of the increased inventory hasn't tapered off, a good sign this channel can handle more volume efficiently for advertisers as it grows.

Kenshoo’s Q3 2018 Quarterly Trend Report

Trend No. 3: The Rise of E-Commerce Channel Ads

This year's third quarter provided more evidence that e-commerce channel advertising (ECA) is becoming a channel that both online and offline retailers should consider as part of their media portfolio.

ECAs are a new category of online advertising that appears directly within a store vs. product ads that drive consumers to a third-party store. Think about a billboard that promotes a product in-store (product shopping ads) vs. an end cap in a grocery store (ECAs).

Kenshoo’s Q3 2018 Quarterly Trend Report

The benefits of these ads are threefold:

1. When retailers advertise on ECAs, they know they’ll be reaching true, in-market shoppers that could potentially be ready to buy. If they are, these ads could help to sway a consumer at the last possible moment to choose one brand over another.
2. There’s inherently less friction for a consumer to become a customer. The conventional wisdom is that for every click required in the path to purchase, some consumers will drop off; every next click is an opportunity for some consumers to drop out. With ECAs, the consumer is already in-store, so if they decide to purchase, they're already right there.
3. ECAs benefit from the store’s ability to use first-party collected data to best match each consumer with the right ads. These cues include previous purchase history; keywords the consumer recently searched for; and other modeled behavior based on shoppers who share similar data points such as geography, average order amount, and other signals.

For this relatively new channel, Kenshoo advertisers spent 3X in July 2018 vs. what they spent in January 2018. ECAs are poised to become a top option for retail marketers.

As retailers prepare for the critical Q4 push, these three trends should be squarely on their radars if they hope to make the most of the holiday shopping season.

Chris Costello is senior director of marketing research for Kenshoo, a technology platform for brands looking to plan, activate and amplify effective marketing across the most-engaging digital channels.