Retail advertisers get selective about ad spend distribution by excluding products from PPC catalogs, aiming to maintain results from paid channels while battling the dent in ad budgets.
While ad budgets remain on a growth path in 2022, the emerging economic challenges involving ongoing inflation and consumers cutting down on discretionary expenses have significantly impacted the industry, downgrading the ad spend forecast for 2022 from 3.5% to 1.6%. (source: IPA Bellwether report).
How is this reflected in the current eCommerce advertising strategies?
New research – Feed Marketing Report by DataFeedWatch by Cart.com, conducted on 15,000+ online stores across 60+ countries in the first half of 2022 – uncovers hidden PPC tactics performed at a product catalog level and benchmarks paid channels usage.
Almost 65% of advertisers remove products from advertising catalogs
Gone are the times when sending paid traffic to all products within a store was a tactic to maximize profits. Today, 64.74% of eCommerce marketers implement a product exclusion strategy to control how the campaign budget is spent.
Product price is the #1 factor motivating almost 16% of marketers' decisions to cut items from campaigns.
In nearly 91% of cases, advertisers opt for removing products below a specified price threshold, which suggests their focus may currently be on products backed by significant profit margins. “Even when observing a positive return on a Shopping campaign as a whole, there will likely be products for which the CPA exceeds the gross profit margin. Often, those are the products at a low price,” explains Jacques van der Wilt, General Manager of Feed Marketing at Cart.com.
“Exclusion is not the only way to protect the campaign ROI, though…
Another solution is to pull these products into a separate campaign, where the target and bidding are adjusted appropriately. That way, retailers have a chance to leverage their potential for attracting customers while maintaining a good ROAS.” he adds.
Product discounting shines as a popular strategy.
Another interesting statistic, in parallel to focusing on profitability, is the impressive number of discounts across many eCommerce sectors.
Overall, 26.49% of all products advertised across paid channels globally are on sale. Even though advertisers aim to secure their ROAS levels, they seem to be attempting to address the challenging financial situation hitting consumers' pockets.
Three eCommerce sectors stand above all others when it comes to discounting their inventory:
- Fashion, at 36.98%
- Health & Beauty, at 33.12%
- Furniture, at 32.77%
Sale is a solid reason to modify bids in PPC campaigns
DataFeedWatch also reports that among marketers using custom_labels for ad campaigns, the most popular, at 13.39%, is an “on-sale” label.
Since custom labels are typically used for separating product groups in an ad campaign for bidding differentiation, this further reaffirms that profitability-led tactics are at the forefront of marketers' minds.
You can find more insights on multichannel strategies, data errors, and the current state of online retail in the Feed Marketing Report 2022 here.
“The report provides an understanding of the ecosystem as a whole,” says Aaron Wallace, Co-Founder at Inspire Uplift Marketplace (inspireuplift.com). “It's beneficial to know what we are doing vs. other businesses; this gives us a benchmark and insights that stimulate our growth.”
You can download the full report here: https://www.datafeedwatch.com/feed-marketing-report.
If you're more of a visual learner, please enjoy this infographic…
