Recovery afoot? PPC Benchmarks
It may be too early for celebrations to begin, but for many retailers May PPC numbers indicate that consumers are coming back to the stores.
For the past 8 months RKG has reported on Year-Over-Year performance trends among our retail client base. For consistency we’ve studied the same group of 20+ companies who’ve been with us for more than two years and who spend significant amounts of money on PPC.
It’s important to note that the clients we study do not budget for search. Rather, we are given efficiency targets and tasked with spending as much as we can within those targets. Hence increases and decreases in spending are primarily tied to consumer behavior. As conversion rates and average order sizes increase we can spend more, as they fall we’re forced to spend less to hit the targets.
As we see the numbers, May represents the first real Year-Over-Year gain in quite some time. The median was a 10% lift in sales YOY. Folks ask us: “Do you have any clients that are (up significantly, down, down significantly, etc)?” to which the answer is “yes”. The standard deviation on the 10% growth is something like 40% and depends tremendously on the vertical.
Perhaps a more stable benchmark is “What fraction of the study group is up year over year?” Let’s look at those trends over the last 10 months:
Surprisingly, much of this growth has been fueled by rebounding Average Order Sizes. Traffic volume and Conversion rates remain weak.
A pessimist might suggest that this is a Mother’s Day phenomena. “Mom, we can’t afford to come see you this year, so we’re sending you a nicer than normal gift…”
We hope that it is emblematic of a recovery underway.
Anyone else care to share what they see?