Q4 11 us-holiday-shopping-report

■ A report by digital marketing firm IgnitionOne.

Mid-Q4 2011

U.S. Holiday Shopping Report

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https://twitter.com/#!/search/ignitionone

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OVERVIEW

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STRONG HOLIDAY SPENDING EXPECTED

Based on the continued YoY growth in ad spending and performance across channels, we predict a strong

holiday retail season for online marketers. With the incredible growth of mobile search ads over the past

year, it is clear that search advertising on mobile devices and tablets is now a critical part of any retailer’s

online strategy. In addition, display advertising is becoming an increasingly important tactic for promotions

and driving qualified website traffic.

As our report showcases, consumer spend and ad spend are up significantly, and online marketers should

realize a strong 2011 holiday season.

KEY FINDINGS

■ RETAILERS INCREASE YOY ONLINE ADVERTISING SPEND AHEAD OF BLACK FRIDAY

In the first half of Q4, multi-channel retailers significantly increased both paid search spend (+31%) and

display spend (+27%) compared with the first half of Q4 2010.

■ CONSUMERS SPENDING MORE ONLINE

Transactions (Orders) increased a staggering 120% YoY, while conversion rates and revenue both

increased 52%.

■ INCREASED CONSUMER RESPONSE TO MOBILE AND TABLET SEARCH ADS

Consumers’ mobile search activity has skyrocketed in the past year, with paid search clicks jumping

355% compared to Q4 2010.

Significant Gains in Q4 Ad Spend Signal Strong Holiday Sales for Retailers



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RETAIL SEES GROWTH IN AD SPEND AND REVENUE HEADING INTO HOLIDAY SHOPPING SEASON

U.S. search spend from existing retail marketers (“Same Retailer Spend”) is up 31.2% year-over-year (“YoY”) 1

in the first half of Q4 across all major search engines (Google, Yahoo!/Bing). This rate of growth is slightly

down compared to 2010’s growth over 2009 (36.7%) but shows strong total growth in spending YoY.

At a time when the media is focused on decreased consumer confidence, our findings show an opposite

effect in consumer behavior and spending online. The number of transactions has increased 120%, along with

a 52% increase in revenue ahead of the peak holiday shopping season. Revenue per click held steady with

a small increase of 5.5%, which points to the ability to monetize advertising at increasing rates. Search ads

are shown to be performing better with a 52% increase in conversion rate, which significantly tops last year’s

growth of 28.7%.

1 Year-over-year growth rates represent the growth rate seen in a given time period (in this case, October 1 – November 13) compared with the same time period one year earlier.

DETAILED FINDINGS

2009 2010 2011

100%

80%

60%

40%

20%

0%

Ch

an

ge in

Sp

en

d S

ince 2

00

8

US Search Ad SpendGrowth Since 2008

© 2011 IgnitionOneSearch Ad Spend Growth Rate



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DISPLAY ADVERTISING ON THE RISE

Display spending by retailers is also strong heading into the holiday season. Total display spend has increased

27% YOY for the first half of Q4.

MOBILE ADS SHOW MASSIVE GROWTH

Consumers are increasingly interacting with search advertising through mobile devices and tablets. Paid

search clicks on mobile rose significantly (+355.2%). Mobile ad spend on Google alone is up 288% YoY. This

matches with the current trends in mainstreaming of tablets and the increasing ease of use for smartphones.

We expect this growth in mobile ads to continue.

DATA POINTS TO STRONG ONLINE HOLIDAY SPENDING

Based on the continued growth in ad spend and the increase in transactions and conversions leading up to it,

we predict a robust holiday retail season for online marketers. While the bulk of the holiday spending season

is still ahead, including the critical Black Friday to Cyber Monday weekend, the strength of consumer

spending and the increasing effectiveness of online advertising to drive sales point to a very strong fourth

quarter for retailers.

28.7%

2009 2010 2011

60%

50%

40%

30%

20%

10%

0%

17%

YoY

Gro

wth

Search Advertising ConversionChange 1H Q4 YoY

© 2011 IgnitionOne

52.3%

Conversion Rate



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For more information, please visit

www.ignitionone.com

or follow the company on Twitter

@IgnitionOne

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About IgnitionOne

IgnitionOne is the world’s first closed loop

Digital Marketing Suite, offering multiple

solutions to improve online performance

within a single interface. Solutions include ad

management and optimization (search, dis-

play and Facebook), cross-channel attribution

and website conversion optimization.

IgnitionOne currently powers more than $20

billion in revenue each year for some of the

world’s leading online marketers, including

General Motors, Chico’s, Ann Taylor, Fiat and

advertising agencies such as MRM Worldwide,

CyberAgent and more.

This report tracked more than 5 billion impressions and 75 million clicks on Google and Yahoo!/Bing search

networks, Google AdEx, and other display networks from Oct 1, 2010 to Nov 13, 2011 across IgnitionOne’s

retail clients.

This is the latest in a series of quarterly reports from IgnitionOne. The reports can be found at:

http://bit.ly/ignitiononeresearch.

METHODOLOGY

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Q4 11 us-holiday-shopping-report

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