American retailers have long recognised Black Friday, the fourth Friday in November and the day after Thanksgiving, as the most important day of the year for their businesses.
Black Friday is fast becoming a worldwide phenomenon, as retailers begin to appreciate the power of banding together and offering ridiculous discounts, all in the name of moving stock.
Crossing the Atlantic
Reuters reports that many UK retail outlets “fully embraced the US-born shopping frenzy for the first time, leading to surging crowds, fights, and record sales for some, such as Britain’s largest department store group, John Lewis.”
British Retailers Most Involved in Black Friday
Retailers participating most vehemently in the Black Friday craze (in terms of PPC) in the UK included Adidas, Amazon, ASOS, Cloggs, Ebay, JC Penney, M and M Direct, Marks & Spencer, Very, and John Lewis.
When comparing the three competitors Very, M and M Direct, and John Lewis, the most hotly contested keywords were black friday, black friday 2014, black friday clothes, black friday clothes sales, black friday clothing, and black friday clothing deals.
Of these retailers, Very bid on the largest range of keywords, with John Lewis bidding for the second-widest range. These two retailers both stock a wider range of products than M and M Direct.
Share of Voice Landscape from 25/11 to 01/12
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Amazon maintained the top spot for share of voice between November 25th and December 1st, although its SOV was temporarily cut in half on the 28th, shrinking to just over 20% on Black Friday before jumping up again.
This is most likely due to the retail giant’s change in PPC strategy and not intense competition with other brands. Various theories about this strategy are discussed with members of the Adthena team later in this article.
Adidas seemed to refrain from any online advertising related to Black Friday, as its SOV remained at 0% in the run-up to the 28th, though in the days following Black Friday it climbed to approximately 30%.
M and M Direct held a similar position, except that its SOV rose on the 28th, plateauing at around 15%.
Another notable competitor is JC Penney, which held a 20% SOV on the 27th, but then declined to around 10% on the 1st.
John Lewis saw a large spike up to 22% on the 28th. Although its SOV remained at 0% on both sides of this day, customers continued to make record purchases from the chain.
Views on Amazon, from the Adthena Office
On the subject of Amazon’s drop in share of spend and subsequent loss of SOV, comments from industry experts Ian O’Rourke (CEO and founder), Shaun Russell (Product Manager) and Robyne Hart (Senior Client Services Manager) at Adthena indicate that it may have been a strategic move to gain insight into their incremental cost of paid search for future periods of intense competition.
O’ Rourke explained the strategy may have been taken to maximise Amazon’s ROI. The retailer knows how much stock it needs to sell in order to make a profit so using this intelligence, it was able to cut right back on spend, knowing it would excel over the weekend regardless.
Competitive Intelligence expert Hart explains how Amazon may have seen a significant increase in their bottom line due to their cutback in spending on Black Friday:
I think, looking at our data, and historically, Amazon always used to do a really big push on paid search. This year it looks like they’ve done the complete opposite. I’m not sure what effect that had on organic search, but I think the reasons were probably very strategic. I think Amazon had its biggest day ever online in their history. I dont know the exact revenue that they pulled in but I can imagine if they dropped search completely on mobile as well as quite significantly on desktop, then they would’ve definitely had a huge bump in their bottom line.
Search specialist Shaun Russell hypotheses that Amazon may have been conducting a brand bidding test. By cutting spending on the 28th, they were looking to gain valuable information on their incremental search cost:
The easy way to think about it is almost like a brand bidding test. Typically on a brand companies will run a few days on and a few days off for their brand with paid search, and compare the incremental costs and incremental revenue. Given Black Friday, Amazon might think they’re kind of, not synonymous, but in a very close space to Black Friday. They might think that during that day that paid search wouldn’t be worth the incremental cost. So perhaps they took the most recent Black Friday as an opportunity to perhaps switch off about half their keywords, thereabouts, and then compare the year on year trend for those versus the ones which they didn’t switch off for, and used that as a brand test. Paid search is of huge value to them every year, and it’s also a huge cost. So this would be just to validate whether they should be using paid search or not, at that time of the year.
Shaun posits that Amazon may be conducting a similar undertaking to Ebay’s study on how valuable paid search was to them. The conclusion Ebay came to, according to Search Engine Land, apparently, was “not very,” but that doesn’t necessarily mean their results were accurate or apply to any other retailers.
Ebay did that huge study as well, verifying for them whether paid search is worth the incremental cost.. I normally see it as a kind of research angle, they’re not sure whether they should be doing paid or not, but they haven’t tested it before… They’ve made a ton of revenue anyway, but being able to make the right choice in future years is worth a lot to them.
What Can Other Retailers Learn for Next Year?
If there’s anything to learn from Amazon’s activity this Black Friday, Robyne Hart says it’s that retailers looking to compete in any real way need to have a rock-solid strategy and unbeatable deals. These are essential to reinforce a PPC strategy. The fact of the matter is that customers don’t ignore good deals:
Looking at Amazon’s strategy, the charts, and the data, if you’re going to do something similar to what Amazon did, then you’re going to have to have a very strong strategy in the run up to Black Friday to be able to pull people in before you switch off your campaign. It’s quite risky.
I think as soon as this blog goes live, and other retailers start seeing this strategy, other people are going to start adopting that strategy as well. It might be riskier doing the same thing next year as you could miss out. It may be more a case of if you were going to drop paid search on Black Friday, perhaps put that money into other channels such as email or other display networks.
If you are going to do what Amazon did, you probably need to look more to what manufacturers you align with, what kind of exclusive offers you can make that Amazon can’t. Make sure that your offers are going to be the best in the marketplace, and Amazon won’t be able to steal those from you. The common things that [Amazon] tend to do is put in plugins on websites etc. distracting people from the path to purchase from your website.
Though Amazon’s activity over the period was certainly enigmatic, the above explanations help decode its erratic paid search activity and reveal the most likely goals the retail giant had in mind.
(Main image credit: John Henderson/flickr)