presents-153926_1280                   With the holiday shopping season upon us, most retail brands have already kicked off their online advertising plans for the busiest time of the year. What are they doing to get the most from their social and search advertising budgets?

To find out we polled 140 online retailers and agencies about their seasonal marketing plans.  Here are four of the main trends we identified (with a little best practice advice thrown in).

1) In paid search: keyword ads are most prized

While social advertising budgets are increasing, paid search still makes up the largest proportion of digital spend.  And despite the growing number of ad types now available, Google keyword ads continue to be the most important for seasonal marketing, with 74% of the sample declaring them “very important” to their programmes. Second came Google Product Listing Ads (PLAs) hailed as “important” by 61%.

Since search is intent-driven – with consumers signalling what they’re looking for in the queries they enter – it is very likely to remain a powerful, mainstay of seasonal advertising.  A little more surprising, however, was the revelation that 90% of companies see keyword search ads as being even more important to holiday marketing activity this year than last. One factor that could be driving this increased importance is the emergence of extended text ads (ETAs) which give advertisers double the headline space and triple the characters in ad text.  This larger footprint for your ad copy can help attract even more searchers. Many advertisers have already started switching to the ETA format and by September 2016 Kenshoo’s Q3 data suggests it accounted for 29% of spend on keyword ads.

Most marketers will have started planning their holiday search advertising by analysing what went well last year and what didn’t, especially around significant milestone dates such as Black Friday and the last shopping weekend before Christmas.  Part of the trick is pacing activity so that you have sufficient budget to cover all potential peaks – even after Christmas when the New Year sales begin. But don’t be afraid to continually revisit your plan in the weeks from now until the big day so you can modify bids in response to events – whether that’s competitor activity, market trends or even the weather. Being flexible will help you maximise your return.

2) In social: Facebook is the retailers’ favourite

Facebook’s ability to laser-target key audiences based on its deep store of demographic information is very likely a big factor in it being the most important platform for social advertising. Almost half of all social budgets are going to Facebook and 71% of advertisers and agencies say they are spending even more on Facebook this year than last.

Part of this success in the retail sector is almost certainly thanks to dynamic product ads – which accounted for more than four out of every ten clicks (42%) and 21% of spend on online retailers’ social ads in the third quarter of this year. Product ads provide an effective, automated way for retailers to promote their entire product inventory using single or multiple carousel images and video. Information is automatically pulled from online product feeds into Facebook, creating ads dynamically and then showing them to relevant audiences.

One effective tactic for seasonal campaigns is to use product ads to retarget those who have visited your website or app and shown interest in specific products. By placing a Facebook pixel on your site, you can track the product pages a visitor has viewed, how many times, how long they lingered and so on – and use this to show them personalised social ads displaying different versions of the same or related products or offering incentives to help them convert.

While some social ads directly lead to sales, Facebook is also a strong channel for product and brand discovery. And these ‘engagement clicks’ can drive potential sales down the line, particularly if retailers integrate social with search campaigns. For example, analysing what is working in social advertising can provide clues on how to refine and expand paid search keywords. Working in the opposite direction, search campaign intent data can refine your social advertising, by using Facebook Custom Audiences to retarget those consumers who have clicked on your paid search ads.

3) Video is for everyone – not just the big brands

500 million people watch videos on Facebook every day, and this popularity is extending to video advertising, which is driving an increasing number of clicks. One Kenshoo customer found that ROI on video ads was 3x higher than standard formats, so it’s no wonder that spend on social video ads has increased 155% in a year and video accounted for 22% of social ad spend in the third quarter of this year by Kenshoo clients.

However, our survey suggests many smaller advertisers are missing out on the benefits of video. While 76% of big brands are majoring on video ads, just 26% of small companies thought they would be important to them this Christmas. Video doesn’t necessarily require big production budgets – carousels of images and gifs work very effectively at a relatively lower cost for smaller advertisers.

As with every ad format, with video you need to engage the viewer quickly – before they scroll away. In a carousel format, for example, you want them to be interested enough to swipe to the next video.  Telling a story where you initially hook the audience then build to a climax through successive image and video content can be very effective. You should also keep in mind that video ads often have the sound off as a default, so your message needs to be shown explicitly on-screen.

4) Mobile underpins retail marketing – but not via apps

Last holiday shopping season we found that mobile was the primary driver for growth in both paid search and social and that pattern has continued through 2016 with increasing spend underpinned by the unrelenting upward journey of mobile.

Mobile app engagement and app install ads are unlikely to be a big trend this year however as more than half of the retail companies polled said these ad types were less important to their holiday shopping campaigns in 2016. This could be because apps are an intermediate step to a retail sale, and retailers may not be willing to invest ad budgets on bringing customers to their apps and then have to still make the final sale when they could just as well drive them to an optimised and tested web experience.

Changes to the search experience on mobile devices may also encourage overall spending. The arrival of ETAs will help to optimise how keyword ads appear on mobile devices.  And the same is true of Google’s introduction of support for bid modifiers for a wider range of device categories – empowering search advertisers to plan for mobile first (rather than as an adjunct to their desktop strategies). This change lets them more precisely control bids on smartphone and tablet ads, either by setting a bit explicitly for those devices, or setting bids that are adjusted by +/- 900% from another device. Previously, bids could only be modified +/-300% and only in reference to the desktop bid.

Overall, one common theme signalled by the festive advertising survey is diversification. While Google and Facebook were the front-runners among the channels retailers are focusing on, the results indicate they will be using a mix of ad types within those channels.  Even though keyword ads and PLAs were rated highest, there was a clear sense of importance among the other ad types available.  We’re likely to see more retailers using a combination of search and social in synch and using the most optimised ad formats to best showcase their products and get the highest return from their spend.

Kenshoo teamed up with marketing agency partner OrionCKB to survey 140 e-commerce and retail advertisers on their spending plans during the holiday season.

Chris Costello

Chris Costello


Chris Costello, Senior Director of Marketing Research, Kenshoo.