METHODOLOGY: I grabbed competitive search (non-brand) data from a couple handfuls of client accounts to see how November shaped up compared to last year.

Frustratingly for our loyal readers, I keep grabbing different baskets of client accounts. Part of this is just the devil in me acting up, but part is a function of the fact that we’re trying to illuminate consumer behavior through paid search. As such we want to look at clients that haven’t materially changed their efficiency objectives, their product offerings or pricing/promotion strategy. As clients included in previous studies change gears they have to be dropped and others brought in.

We also report on median values for the baskets not weighted averages. We believe medians paint a truer picture of what’s happening for “most” advertisers. The trouble with medians is they don’t “add up”. Looking at weighted averages the sales delta will be a product of the traffic volume change, the conversion rate change and the average order value change. While that’s true for each client studied, it isn’t true of the median values for each metric within the basket of clients.

Apologies finished, let’s look at the results!

RESULTS:

November sales through paid search were up from last year but not by as much as October’s were:

Indeed, the way the holidays fell, this monthly approach gives an artificially favorable view of November 2009 performance; this year “Cyber-Monday” was November 30th, last year it was December 1st. With that helpful tail wind, one would expect November to have been at least as strong as October if not stronger.

Also intriguing, while most of the performance declines this year have been a function of traffic volume more than conversion rates or order values, the pattern here is different. Clearly the volume of traffic is strong and getting stronger; it’s the conversion rates that have tailed off in November.

Pulling back the covers, let’s look at pre-Thanksgiving November vs the first big holiday weekend, from Black Friday through Cyber-Monday. {Does anyone have naming rights for the Saturday and Sunday? All in favor of “Michie-Saturday”?}

For this same cohort the sales growth was much stronger over the holiday weekend than prior to it:

• Pre-Thanksgiving November YoY (11/2/08 - 11/27/08 vs 11/1/09 - 11/26/09):
  • Sales up 9% on higher traffic volumes and stronger AOV, but
  • Conversion Rates DOWN 15%
• Holiday weekend YoY (Black Friday through Cyber Monday):
  • Sales up 27% on higher traffic and AOV, and
  • Conversion Rates are off only 5%

This got me thinking about conditioned behavior. Does this data point to consumers being trained to wait for the holiday sales? I think so.

If we break out the comparison by day over the holiday weekend the numbers are quite interesting:

Notice that the conversion rates are comparatively higher on Black Friday and Cyber-Monday than during the intervening days. Bear in mind, we’re comparing these days to the same days last year, so the above chart does not simply say “conversion rates are higher on BF and CM”, it says the consumer behavior on those two days are more extreme than they were in 2008.

Promotional calendars and the media hype surrounding the holidays seems to be conditioning shoppers to kick-tires earlier and come to buy when the sales are on.

Interesting stuff, love to hear if others are seeing the same types of things.