A new report has confirmed that paid search is this year’s fastest growing ad format amongst retailers. The eMarketer data suggests that not only has there been a leap in spending amongst retailers across paid search in the last 12 months, it’s also likely to grow again next year. This comes just a few days after a Kenshoo report highlighted the growth of paid social spending.

The report says that spending by retailers in paid search has grown 22.5% since last year, with a projected $13.12 billion / £10.84 billion to be spent collectively by advertisers in the channel in 2019. This number is expected to swell further in 2020, with eMarketer suggesting that it could hit $15.65 billion / £12.93 billion.

Interestingly, eMarketer credits Google with growing the sector, saying its ad developments favour retail more than any other sector. As Google Ads continues its roll out of new features, ad formats and integrations, retailers stand to benefit the most. The report says for example that allowing search ads to be displayed within Maps favours retailers as they can use this placement to drive traffic to their bricks and mortar stores.

The report says, “Retail overindexes on search because bottom-funnel search ads are essential for driving ecommerce, and Google Shopping ads have become a go-to ad product for retail advertisers. Conversion rates for retailers using Google Shopping ads range from 1.1% to 3.1%.”

Almost half of all retail ad spend is dedicated to paid search, with it expected to consume 47.3% of total retail digital ad spending by 2020. While Shopping and Image ads are attractive to retailers and make Google Ads a popular platform, the eMarketer report also notes that Amazon paid search ads are also starting to emerge as a popular ad format amongst retailers. Amazon ads are particularly attractive to smaller retailers – perhaps because it is seen as more affordable than Google Ads for some keywords.

eMarketer had previously suggested that Amazon held around 50% of eCommerce ad spending but revised this down to 38% in June. It says that collectively, Google, Amazon and Facebook account for 70% of all US ecommerce ad spend, a figure which represents around $73 billion / £60.3 billion.

The digital marketing institute forecasts that by 2021, web and mobile advertising will account for half of all ad spend, meaning digital paid advertising will eclipse what is spent on TV, billboard and print ads combined.

If you’re a retailer or ecommerce business and you want to identify areas for improvement, contact the Adrac team today.