Sidecar Releases Online Advertising Industry Benchmarks for 2021

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PHILADELPHIA CREAM, April 20, 2021 /PRNewswire/ — The global pandemic has led to a dramatic improvement in advertising return on investment and a reduction in cost per acquisition across major advertising platforms in 2020. That’s according to Sidecar 2021 Benchmark Report, the company’s new retail study that examined five digital advertising platforms and six key metrics across 16 retail segments. Now in its fifth year, the 2021 Benchmark Report is Sidecar most comprehensive study to date on e-commerce advertising benchmarks for Google, Facebook, Instagram and Amazon.

2020 has been, in many ways, a balancing act for retailers and brands, as evidenced by restrictions on physical outlets and remote working becoming the new norm. At the same time, e-commerce exploded at the height of the pandemic. For retail marketers, managing these variables and making successful business decisions was no easy task, with 2021 shaping up to be just as difficult.

Coordinating successful campaigns on Google, Facebook and Amazon has also become more complex. “With each advertising platform constantly expanding its capabilities, savvy retail marketers need to recognize that each platform can and should provide specific value to their business,” explained Mike Farrell, Senior Director of Integrated Digital Strategy for Sidecar. “As our 2021 Benchmark Report indicates, retailers must also continuously adjust their strategies to generate the most value from these key advertising platforms.”

Sidecar reviewed thousands of active ad campaigns for hundreds of US retailers and calculated average performance benchmarks by ad platform, retail segment, and monthly spend. The analysis took place in February 2021. Here are the main highlights of The report:

  • Google Shopping. With a global pandemic ushering in a period of sustained online shopping in 2020, the rise in behavior has been particularly apparent on Google Shopping.
    • The channel saw average CPC (cost per click) drop (-9%) and CPA (cost per acquisition) drop (-11%), while ROAS (return on ad spend) and CVR (return rate) conversion) improved year over year (3% each), indicating efficiency gains as clicks cost retailers less.
    • The reduction in year-over-year CPC and rising ROAS show how stable the channel is, indicating an opportunity for retailers of all sizes to reliably generate revenue and returns.
  • Google Paid Search. Retail marketers continued to revamp their Google paid search campaigns for greater effectiveness in 2020.
    • Spending more on high-converting terms and less on general keywords paid off, leading to year-over-year growth in conversion rate, click-through rate, and ROAS (31%), while CPC dropped by 14% and CPA by 20%.
    • Retail marketers will need to be flexible with paid search as Google changes reporting options. The company limited visibility in its search terms report in 2020, with third-party cookies set to be deprecated in 2022.
  • Facebook advertising. Consumers gained confidence in shopping online in 2020. This was evident 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 18% year-on-year, suggesting shoppers are more comfortable making larger purchases through Facebook ads.
  • Instagram advertising. Instagram has traditionally been a branding vehicle for many retailers. More recently, retailers have found ways to leverage Instagram to drive conversions.
    • Instagram’s ROAS improved 11% year-over-year, while CPA declined 5%.
    • Instagram’s ad conversion rate increased by 6% to 8.07%, another indication that shoppers are becoming more comfortable buying products through social platforms like Instagram.
  • Amazon advertising. Amazon’s results were segmented by single-brand and multi-brand retailers, monthly spend levels, and monthly KPI performance for the year 2020.
    • Single-brand retailers had a higher CPC ($0.47) than multi-brand retailers ($0.24). However, the CVR of single-brand retailers was higher and the CPA was lower than that of multi-brand retailers. This high engagement rate coupled with a lower CPA could indicate greater loyalty to single-brand retailers on Amazon.
    • Average CPC ($0.39) and CPAs ($6.44) were the lowest of the five channels examined, while conversion rate and ROAS (7.95) remained high.
    • Retail merchants should consider selling fees on Amazon that could reduce efficiency.
  • 2020 Vertical Performance Highlights
    • Clothing – low CPA of $6.17 on Facebook
    • Automotive – High AOV of $251.14 on Google Paid Search
    • IT and Electronics – High ROAS of 9.91 on Google Shopping
    • Health and Beauty – High CVR of 10.94% on Facebook
    • Home & 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 the performance benchmarks of Facebook, Instagram and Amazon. Sidecar’s Benchmarks report continues to be the most comprehensive study of cross-channel advertising performance in the retail industry. The report carries the Marketing Excellence Award ITSMA, a global marketing association.

Additional Resources:

ABOUT SIDECAR

Sidecar delivers performance marketing excellence to retailers and brands. Sidecar’s cutting-edge technology and proprietary data, combined with years of performance marketing expertise, help its clients unlock the full potential of today’s most powerful search, shopping, social and marketplace channels. today.

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