Sidecar Releases E-commerce Advertising Industry Benchmarks for 2021

PHILADELPHIA, April 20, 2021 /PRNewswire/ -- The global pandemic led to sweeping improvements in return on ad spend and reductions in cost per acquisition across primary ad platforms in 2020. That's according to Sidecar's 2021 Benchmarks Report, the company's new retail research that examined five digital advertising platforms and six key metrics across 16 retail segments. Now in its fifth year, the 2021 Benchmarks Report is Sidecar's most comprehensive study to date of e-commerce advertising benchmarks for Google, Facebook, Instagram, and Amazon.

2020 was, in many ways, a balancing act for retailers and brands, as evidenced by restrictions on brick-and-mortar retail locations and remote work becoming the new normal. At the same time, e-commerce boomed at the height of the pandemic. For retail marketers, managing these variables and making successful business decisions was no simple task with 2021 looking equally challenging.

Coordinating successful campaigns across Google, Facebook, and Amazon has also grown more complex. "With each ad platform constantly expanding its capabilities, savvy retail marketers must recognize that each platform can—and should—provide a specific value to their business," explained Mike Farrell, Senior Director of Integrated Digital Strategy for Sidecar. "As our 2021 Benchmarks Report indicates, retailers must also continually adjust their strategies to generate the most value from these major ad platforms."

Sidecar examined thousands of active ad campaigns for hundreds of U.S. retailers, and calculated average performance benchmarks by ad platform, retail segment, and monthly spend. The analysis took place in February 2021. The following are key highlights from the report:

• Google Shopping. With a global pandemic ushering in a period of sustained online shopping in 2020, the behavioral uptick was especially apparent on Google Shopping.
• The channel saw average CPC (cost per click) drop (-9%) and CPA (cost per acquisition) decline (-11%), while ROAS (return on ad spend) and CVR (conversion rate) improved year over year (3% each), indicating efficiency gains as clicks came at a lower cost to retailers.
• The reduction in year-over-year CPC and bump in ROAS show how stable the channel is, indicating an opportunity for retailers of all sizes to reliably generate revenue and return.
• Google Paid Search. Retail marketers continued to retool their Google paid search campaigns for stronger efficiency in 2020.
• Spending more on high-converting terms and less on general keywords paid off, causing conversion rate, click-through rate, and ROAS (31%) to grow year over year, while CPC dropped by 14% and CPA declined by 20%.
• Retail marketers will need to be flexible on paid search as Google changes reporting options. The company limited visibility in its search terms report in 2020, with third-party cookies to be deprecated in 2022.
• Facebook Advertising. Consumers gained confidence in shopping online in 2020. This was apparent on social media sites like Facebook, where they can interact with businesses of all sizes.
• This increased confidence led to lower CPC (-18%) and CPA (-9%), with improved ROAS (29%) year over year.
• AOV (average order value) increased YoY by 18%, suggesting shoppers are more comfortable making larger purchases via Facebook ads.
• Instagram Advertising. Instagram is traditionally a branding vehicle for many retailers. More recently, retailers are finding ways to leverage Instagram to drive conversions.
• Instagram ROAS improved by 11% year over year while CPA decreased by 5%.
• Instagram ad conversion rate increased by 6% to reach 8.07%, another indication of shoppers growing comfortable purchasing products through social platforms like Instagram.
• Amazon Advertising. Amazon findings were segmented by single- vs. multi-brand retailers, monthly spend tiers, and monthly KPI performance for the full year of 2020.
• Single-brand retailers had a higher CPC ($0.47) than multi-brand retailers ($0.24). However, CVR for single-brand retailers was higher and CPA was lower compared to multi-brand retailers. This high engagement rate coupled with lower CPA could indicate stronger loyalty to single-brand retailers on Amazon.
• Average CPC ($0.39) and CPA ($6.44) were the lowest across all five examined channels, while conversion rate and ROAS (7.95) remained strong.
• Retail marketers should account for seller fees on Amazon that could lower efficiency.
• 2020 Vertical Performance Highlights
• Apparel – low CPA of $6.17 on Facebook
• Automotive – high AOV of $251.14 on Google Paid Search
• Computers & Electronics – high ROAS of 9.91 on Google Shopping
• Health & Beauty – high CVR of 10.94% on Facebook
• House & Home – high ROAS of 17.42 on Instagram
• Sporting Goods – high CTR of 7.25% on Google Paid Search

The annual Benchmarks Report has been produced by Sidecar since 2017. This 2021 report marks the company's first analysis of Facebook, Instagram, and Amazon performance benchmarks. Sidecar's Benchmarks report continues to be the most comprehensive study on multichannel ad performance in the retail industry. The report carries the Marketing Excellence Award from ITSMA, a global marketing association. 

Additional Resources:

• Read Sidecar's 2021 Benchmarks Report: https://bit.ly/3tk14RT
• View the infographic visualizing the report's major findings (contact Sidecar for high-res copy for republishing): https://bit.ly/3x9FBNB
• Read Sidecar's 2020 Benchmarks Report: https://bit.ly/3tw95Dq

ABOUT SIDECAR

Sidecar offers performance marketing excellence to retailers and brands. Sidecar's advanced technology and proprietary data, combined with years of performance marketing expertise, help its customers unlock the full potential of today's most powerful search, shopping, social, and marketplace channels.

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SOURCE Sidecar