COVID-19’s impact on PPC advertising

COVID-19’s impact on PPC advertising

Digital marketers across the globe are currently having to deal with more competition than ever before, as more marketing budget gets shifted towards paid ads. With a growing number of businesses now focusing on online-only for the foreseeable, COVID-19 has sent a seismic shift through the world fo PPC advertising and digital marketing.

Global events impacting PPC performance is nothing new, of course. Remember Brexit? Well, following the 2016 EU referendum, UK advertisers found their average cost-per-click (CPC) on the search engine results page (SERP) rising considerably, while many international advertisers enjoyed UK-based clicks at a serious CPC discount.

As more businesses change the the way they operate, and as the world continues to react to the news that has dominated our headlines in recent months, people turn to Google search for answers to their questions and for solutions to meet their new stay-at-home needs. For some businesses, this means new audiences landing on their sites and an influx of new customers.

For others, PPC strategy becomes more about simply making every pound or dollar go as far as possible in order to keep things ticking along as normally as possible. To summarize what’s happening in the world of paid ads at the moment, and how the sector has been impacted by coronavirus, let’s take a look at some great industry research coordinated by WordStream.

Click-through rates (CTRs)

CTR performance is currently more mixed than ever, with a different picture being painted depending on who you ask. Naturally, it’s varying a lot depending on sector (more on that shortly.) However, a general trend is that competitive terms that drive quick conversions and sales are getting very expensive as businesses look to do all they can to get some cash in the till by whatever means possible.

Conversion rates

Across the United States, conversion rates down by as much as 21% already. This is likely down to one of two reasons, the first being that more people are keeping their wallets firmly closed and changing their purchasing priorities.  Another reason could be the fact that demand has significantly shifted, and that many people are no longer looking for the same services that a particular search once indicated. For instance, let’s take British Airways as an example. Someone searching for that phrase is now much more likely to be seeking information about flight cancellations or rescheduling, rather than booking anything new. This has a knock-on effect, too, with the likes of Expedia et al no longer needing to bid on this term.

Sector by sector

As with any pandemic or major global disruption, there’s always going to be certain industries that come out of it better than others. Let’s take a closer look at how some key sectors are faring in terms of PPC and digital advertising during the current COVID-19 situation.

Personal care and consumer goods

Naturally, consumer goods products such as hand sanitizer and soap have seen a surge in demand in recent weeks, with more and more people searching for these products online. Self-care during stay-at-home time is on the rise in general – there’s been a 41% increase in searches for beauty and personal care products – and many such businesses are booming off the back of lowered CPCs and higher conversion rates.

Retail and e-commerce

E-commerce is perhaps more mixed, in terms of performance, than you might think. With increased competition due to high street stores closing, coupled with uncertainty over business’ long-term futures, conversion rates are down by 14%. The good news for many businesses, however, is that some of the bigger name brands are pulling back their spend – for example, Amazon currently has more orders than it can fulfill, so has no real need to be spending on PPC. This actually opens up space for other players – but they need to move quickly.

Manufacturing

With operations being slowed across the board, PPC campaigns for manufacturing and industrial goods are being heavily impacted – and not in a good way. Average CPC has increased by 5%, whilst conversion rates for the industry have decreased modestly. Crucially, there’s been a huge 13% decrease in search traffic in general for those in manufacturing, as peoples’ priorities change amidst the COVID-19 pandemic.

Construction

The building and construction industry often bears the brunt of any sizeable, sudden economic downturn. This is sadly the case once again, with firms – perhaps indefinitely – delayed projects and fewer prospective customers looking to convert. The result of this? CPC is up, and conversion rates are down.

Construction sector PPC advertising during COVID-19

Make every penny count

With the sector in such a state of flux, it’s never been so important to ensure that you’re spending your money where it matters and making the remaining marketing budget you do still have go as far as possible. Businesses, regardless of sector, need to be taking steps now to optimize their paid spend and ensure that they’re delivering as much ROI as they possibly can.

The key to this, we believe, is found by leveraging your business’ data with artificial intelligence (AI) quickly and effectively. If you’d like to find out more, download our Customer AI guide below, or get in touch. 

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