Holiday Refresh: Marketers Seeing Higher Cost Per Clicks

Retailers and advertisers will see a highly competitive 2021 holiday season, according to data from Microsoft Advertising released Thursday.

The change in consumer behavior during the past year will have a major impact on the next couple of months. 

Search volume is trending between 2019 and 2020, and the cost per click (CPC) rose 15% compared with the previous quarter as a result of more clicks on competitive queries in the second quarter, according to Microsoft data.

Some of the trends Microsoft points to include early holiday shopping early, alternative payments and delivery methods, sustainability will become a trend, and advertising competition will rise.

The average search volume for sustainability and sustainable products grew 37% annually since 2019, so it’s important to feature the brand’s sustainable initiatives in creative images, copy, and extension callouts.

Alternative payment and delivery methods will fluctuate. The trend to support local businesses will accelerate for fast delivery and convenient pickup. Buy online, pick up in-store (BOPIS) options grew 555% in the last year and buy now, pay later (BNPL) options have grown over 150%, according to Microsoft data.

Ecommerce is expected to see 26% year-over-year (YoY) growth in Q4 related to the holiday shopping season, according to Rakuten Intelligence. Apparel is expected to have 30% YoY growth in Q4, and up 45% compared with 2019.  

November will be the strongest month for ecommerce and apparel this year.

Black Friday and Cyber Monday will push apparel up 35% YoY, and up 59% compared with 2019.

Why the jump in apparel? Many consumers skipped a “wardrobe refresh” in fall 2020.

Some categories will become difficult to predict, according to Kristen Gall, president of Rakuten Rewards, because a lot of out-of-season inventory sold during the summer, like snow apparel or gear for winter activities, due to off cycle sales. For inventory that didn’t sell last year, companies will incentivize customers to buy those products this year.

There’s no shortage of prediction, incentives and data about the holiday shopping season.

RetailMeNot released data today to get an idea on how consumers—a survey of 1,082 U.S. adults—are approaching holiday shopping this year. Many shoppers said they would get an early start. Some 66% said they prefer to complete all their holiday shopping as early as possible, 30% say they’re starting even earlier than they did last year.

About 15% plan to spend more this year than last — $886 on average, up from $766 in 2020 and $738 in 2019.

Here are some highlights from the report:

  • 58% will spend on apparel and clothing
  • 54% will spend on gift cards
  • 40% will spend on toys
  • 38% on small electronics
  • 36% will spend on food and beverage
  • 51% plan to do more than half of their shopping online
  • 49% plan to do more than half of their shopping in stores
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