eCommerce Businesses - Where to Place Your PPC Budget in 2020

eCommerce Businesses – Where to spend your PPC budget in 2020

Hanapin Marketing recently published a research document looking at where eCommerce marketers put their PPC budget in 2019 and where they intend to put it in 2020. You can download the report here. Whether you manage your PPC in-house or through a PPC agency, mapping out where to put the PPC advertising budget is something that all businesses have to do. In this blog, I’ve summarised 8 of the main takeaways and my thoughts from the study and made recommendations on where eCommerce marketers should be investing their PPC budget in 2020.

88% of eCommerce marketers said that PPC is a huge driver for their business with only 4% of marketers saying that they hadn’t grown their business with PPC advertising at all.

Despite a small percentage of marketers not seeing any growth with PPC marketing, all of the marketers in the survey said that in 2020, their advertising spend was either going to increase or stay the same. No marketer in the survey had any plans of dropping their PPC advertising spend in 2020.

1.    Embrace the multi-channel approach

Advertising just solely on Google and expecting sales from a direct marketing approach used to work just fine a few years ago, but in 2020, PPC marketers need to be more sophisticated.

There are often multiple touchpoints before a customer goes onto your website and makes a purchase. We live in a multi-channel world. Your customers will likely be on multiple platforms such as Google, Facebook, Instagram, Linkedin, Pinterest, YouTube, Gmail and Amazon to name a few.  You have an opportunity to influence your customers while they are browsing these sites, creating a positive perception of your brand. Google is still the most popular advertising platform, but from the number of advertising platforms that eCommerce advertisers are spending money on, smart advertisers should be testing out other advertising platforms too. 

2.    Facebook and Instagram are still the ‘go to’ places for Paid Social

Facebook is still the most popular paid social platform with 100% of people who were advertising on paid social, investing money into Facebook. Instagram came a close second with 92% of paid social advertisers putting budget into it. This is not surprising as Instagram advertising can easily be done from the Facebook Ads manager.

Advertisers said that their best performing ad formats on Facebook were single image ads, Dynamic creative ads and Carousel ads. Carousel ads have worked very well for me in the past. On Instagram, PPC advertisers said that their best performing ad is Photo ads.

Google released Bumper Ads last year which are short video ads intended to increase brand awareness This will likely lead to an increase in Youtube advertising in 2020.

3.    Quora ads is getting more popular

Youtube and Quora Ads were tied for third and fourth place when looking at which paid social platforms advertisers were investing some of their budget into. 39% of advertisers utilising paid social had put some budget into them. Quora Ads also saw a noticeable increase in searches during 2018 and 2019 as can be seen from the Google Trends graph below:

However, even though a decent number of eCommerce advertisers utilising paid social advertising have invested some budget into Quora Ads, only 15% of advertisers intend to increase their spend on Quora in 2020. This may show that eCommerce advertisers have tested Quora Ads but other advertising platforms have yielded better results. If this is the case, then it would be in line with my experience of using Quora Ads.

Advertising on Quora can be profitable when used with a very specific strategy but I suspect that most advertisers will be able to put their advertising budget ti better use elsewhere. eCommerce advertisers said that the most effective ad format for them on Quora in 2019 was Image Ads.

4.    Search on Google is still popular

The highest percentage of advertisers (60%) said that they would be spending more money compared to last year on Search. When it comes to the specific advertising platform, the highest percentage of advertisers (84%) said that they were planning on increasing their spend on Google. This may show that they majority of advertisers plan to increase their spend on Google Search. Regardless, from my experience, I often find that Google Search is one of the areas that eCommerce advertisers spend a good chunk of their budget on. 

5.    You should be running Remarketing and Shopping campaigns

Remarketing and Shopping came up as most promising. When looking at the least effective forms of advertising, Shopping and Remarketing were at the bottom with just 4%. This coupled with the fact that when looking at where advertisers intended to spend more compared to last year,

Shopping came in second place (48%) and Remarketing came in fourth place (36%) out of seven. For eCommerce retailers, I often see that Remarketing (Dynamic Remarketing in particular) and Shopping are the most effective PPC channels.

6.    Start creating Video ads

According to Think With Google, digital video is the new ‘window shopping’ as video advertising is being used as a tool in the earliest stages of brand awareness.

80% of shoppers who watched a video related to a product that they were planning to purchase said that they watched a YouTube video related to it in the early stages of their purchase journey. 

44% of eCommerce marketers intend to invest in video ads. Whether it be with YouTube, Facebook, Instagram or any of the other advertising platforms with video advertising options, It is a worthwhile for advertisers to start thinking about video advertising.

7.    There are (most likely) better channels than Display

When looking at the least effective PPC channels for eCommerce, the worst channel was Display with 40% of advertisers saying it was the least effective channel for them. This matches my experience, as I’ve often found that display advertising is the most difficult to make profitable. This doesn;t necessarily mean that advertisers shouldn’t advertise on Display. It just means that if your budget is tight, then Display advertising is one area where you can save some of the budget.

For advertisers not happy with the Google Display Network, the study said that Amazon DSP is slowly taking over in the programmatic space. This could be something worth looking into in 2020.

8.    Amazon Advertising is still worth considering

Back in February 2018, I spoke about Amazon advertising becoming increasingly popular after I had seen some very good initial results with it. In the study done by Hanapin Marketing, when looking at which PPC channels, advertisers were planning to spend more on, Amazon came seventh place.

44% of advertisers said they were planning on increasing spend on the channel in 2020. This means that it is still worth considering allocating a PPC budget towards Amazon advertising. However, Hanapin marketing’s research found that some advertisers saw a 20% – 30% reduction in their Google revenue when running Amazon advertising. So, if you decide to start running Amazon advertising then make sure you keep an eye on your Google revenue.    

Wrapping up

To determine where you should put your advertising budget in 2020, it is useful to see where other advertisers intend to put their PPC budget in 2020. Google is still the most popular by far with 84% of advertisers saying they plan to put more money behind advertising on Google. Facebook came second with 62%, Instagram was third with 54% and YouTube came fourth with 54%. At the top end, things are still very much similar to 2019. eCommerce Advertisers should still focus putting the majority of their PPC budget into Google, Facebook, Instagram and YouTube. There is an increase video advertising but whether advertisers can make it a profitable advertising channel in 2020 remains to be seen.

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