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2020 Holiday Spend Report: December eCommerce

Published: January 14, 2021

Author: Jessica Guedes


Search surges, social stabilizes in tail end of 2020 holiday season

Sr. Search Strategist Shawn Grenald contributed to this report.

Search and social advertisers tackled the 2020 holiday season by ramping up early and pumping up budgets in October and November. We crunched the numbers to see if the trends persisted into December.

In our analysis, which included both paid search and paid social (Facebook/Instagram), we compared year-over-year spend data from major eCommerce clients who are representative of 3Q’s full eCommerce portfolio. Just as in October and November, we saw advertisers pivot to make up for reduced levels of in-person shopping by increasing budgets to engage shoppers online. But there are major differences in paid search and social data worth exploring.
Let’s get started.

1) Paid social spend stabilized after election season; paid search spend and competition continued to grow

In November 2020, paid social spend increased by 36% compared to paid social spend in November 2019; December 2020 increased by only 5% over December 2019 spend as election-related advertising subsided. This is in stark contrast to eCommerce-related paid search spend, which followed a 66% year-over-year increase in November by increasing 64% from last December, thanks in part to a 54% year-over-year increase in CPCs.

2) Paid search performance kept pace with budget increases

Both conversion volume and conversion rate rose as spend increased; advertisers achieved 54% conversion volume gains and 5% CVR gains over December 2019. The performance did more than justify spend increases; it pointed to a change in digital scale that will persist at some level into 2021.

3) Facebook and Instagram: Low costs and high engagement point to a bright future in the digitized shopping landscape

Paid social spend rose only 5% from December 2019, and CPMs (down 4% year over year) continued a trend of COVID-era suppression. The eye-popping stats came from engagement; Facebook and Instagram CTRs in December were up 80% year over year, and CPCs were down 47%.

The upshot: users are more willing than ever to engage with paid social ads, and costs continue to lag behind pre-COVID benchmarks. Advertisers should continue to: a) prioritize disruptive creative that grabs attention; and b) test into new opportunities to capture audiences with higher-than-ever intent to engage.

Dec YoY PCPs Graph

4) Lots of opportunity exists to grab more conversions on social

The big year-over-year increase in engagement was not mirrored in conversions; social ads registered a 64% drop in conversion rate from December 2019. To combat the decline, we recommend that advertisers focus on the entire pre- and post-click customer experience, with ad copy that is relatable, timely, highlights unique value props, and emphasizes customer service excellence with landing pages optimized for performance.

Questions? Contact 3Q Digital for more information about working with our in-house Creative Services and Paid Social Media Advertising teams.

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