NEW STUDY: How effective are Sponsored Product Ads on Black Friday? (part one)
So we all know that Black Friday was a blast for online retailers and marketplaces reaching a highest new sales volume.
Here is another interesting angle about the effectiveness of online in-store promotions during Black Friday.
Should online sellers increase their advertising Sponsored Product budget during the intense shopping days or do the high competition and the discounted product prices make it less effective and beneficial?
Well, we have got the answer.
In the last 30 days we have gathered data from half a billion Sponsored Product ads that we served in several European marketplaces in different countries.
Let’s start with the bottom line – The ACoS (advertising cost of sale) for the sellers on Black Friday was almost 50% lower than the average! That means that every dollar that was spent on Sponsored Products during Black Friday generated twice as much sales than in regular days. The results were even better for Sponsored Product ads on mobile devices.
The conversion rate of the Sponsored Products ads on Black Friday was 33% higher than the average and so was the average purchase order (GMV). On mobile the conversion rates and the average purchase orders were even much higher than the average.
When looking at the usage of Sponsored Product ads by sellers on Black Friday the numbers are almost double than the average, meaning that more sellers spent more money on their in-store promotions. The price per click was also somewhat higher than the average (because of the higher competition) and as for the click through rate there was no meaningful change.
The conclusion is that although more sellers ran Sponsored Product ads during Black Friday and increased their advertising budget and that the competition between the sellers amplified, and although some of them offered reduced prices, the results for the sellers were still very good and their return on investment was twice higher than usual.
The Sponsored Product ads were much more effective than the usual.
This may be explained by the fact that the shoppers were more willing to purchase and less just browsing around knowing that they have limited time to enjoy the special discounts and finish their shopping before the Black Friday ends. Many shoppers saved their expensive purchases to Black Friday which also explains the higher purchase orders and the total GMV.
Mabaya develops advertising tools that enable marketplaces and online retailers to monetize their traffic by offering sellers and brands to promote their products. Mabaya’s white label Sponsored Products Ads platform enables sellers and brands to bid in order to ensure their products are listed in premium locations in the online stores.