Holiday Ad Spending Starts Early As Brands And Retailers Face Concerns Over Shipping Capacity

Amazon's decision to kick off the holiday spending season with its Prime Day membership specials last week might have prompted some advertisers to spend ad budgets early, but they are also considering shipping capacity as more consumers buy online.  

Some companies expect the budget allocations to run heavier earlier in the season and less as the holiday season approaches.

Many of NetElixir's customers plan to reverse the sales cycle, running more attractive promotions earlier in the holiday cycle during October and November, with fewer promotions in December.

“For some large retailers, Black Friday deals may be less attractive than that available during Prime Day week,” Udayan Bose, founder and CEO at NetElixir, wrote in an email to Search & Performance Marketing Daily.

During the fourth quarter of this year, NetElixir expects search ad budgets to run between 12% and 15% higher than last year.



It seems that shipping capacity could play an interesting role in ad-budget cycles.

Retailers and shipping consultants toldThe Wall Street Journal that FedEx and United Par­cel Ser­vice told some of their largest ship­pers most of their ca­pac­ity is al­ready spo­ken for and any ex­tra trail­ers with hol­i­day or­ders will have to wait to be picked up.

U.S. ecommerce sales will reach $794.50 billion this year -- up 32.4% year-over-year, according to eMarketer, a higher growth rate than the 18.0% predicted in its second-quarter forecast, as consumers continue to avoid stores and opt for online shopping.

NetElixir, a digital marketing agency, found that Prime Day had an impact on ecommerce sites beyond the Amazon marketplace, and that Prime Day could continue to boost online traffic and sales, as the initial two day sales event had a rub-off effect across other companies.

Prime Day encouraged splurge spending on large orders. This year, NetElixir witnessed a 14% higher average order value (AOV) for purchases compared to the days leading up to the sales event. The company’s analysis found that 53% of user traffic came on the first day of Prime Day, October 13, while 57% of the revenue came on the second day, October 14.

Consumers spent the first day researching the best deals on products, and purchasing them on the second. Day Two of Amazon Prime Day saw 12% fewer clicks and a 7% higher conversion rate compared with Prime Day One. The majority of the high-value products were purchased on day two, leading to a 44% higher AOV compared to day one.

During the two days of Prime, shoppers searched for brand and product information across other channels as they conducted thorough research prior to purchasing. Prime Day searches gained 23% more interactions across search engines and social media channels than non-sales days

Prime Day triggered growth across ecommerce websites that were not linked to Amazon. During the two days of Amazon Prime compared to non-sales days, ecommerce sites within NetElixir’s dataset saw:

  • Website sessions increase by 19%
  • Site orders jump 39%
  • Ecommerce revenue rise 42%
  • Website conversion rates increase by 17%

Data from SimilarWeb also shows marketers are shifting budget allocations and that Amazon Prime Day continues to have an influence across ecommerce.

Amazon, Best Buy and Target increased their investment in paid search by 2%, 2% and 1%, respectively, to drive traffic on Prime Day, according to SimilarWeb data.

Best Buy increased direct traffic by 10%, which signals that shoppers seek out of Best Buy to find deals during Prime Day. The data also shows Target that Target traffic increased by 26%, while the share of paid search went from 14% to 15%.

Across top affiliates in the US, Prime Day traffic decreased 18% year-over-year, with Amazon capturing the largest share of traffic from the top 45 affiliates, about 42%.

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