How COVID-​19 has Impacted Paid Search Marketing

BY Rachel Cagle
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Paid search was one of the many digital media advertising formats affected by the COVID-​19 pandemic. Luckily, e‑commerce didn’t take a big hit, but that didn’t stop advertisers from being wary of spending as much as they had previously. However, according to Merkle’s Digital Marketing Report Q2 2020, paid search has actually seen a dramatic increase in clicks.

COVID-19’s Effect on Paid Search

Before the pandemic hit, ad spend dedicated to paid search in the U.S. had remained fairly consistent at around 15% of the total. However, when COVID-​19 came to the U.S. in the first quarter of 2020, ad spending for this format began to decline until it reached a low of 9% in the second quarter. Paid search clicks had also been stagnant at around 10% before the pandemic. However, by the second quarter of 2020, clicks spiked dramatically up to 38%.

The two industries that experienced the biggest year-​over-​year paid search click growth were retail and consumer goods, which rose by 42%, and financial services with a 41% increase. Both of those industries also saw year-​over-​year growth in paid search ad spending. Retail and consumer goods ad spending increased by 11%, while financial services trailed behind with 1% growth. There was also a third industry that upped its ad spending this year. Business-​to-​business (B2B) ad spending increased year-​over-​year by 8%.

Clicks and ad spending are all well and good, but what about the results of those efforts? Well, March 2020 didn’t see much pay off from paid search efforts, but come April, the landscape began to change. Year-​over-​year growth for retailer sales generated by Google search ads surged for sales per click and sales overall. Between April and July, sales per click had a median year-​over-​year increase of 26% while sales in general surged with a median around 100% growth.

With Google text and shopping ad clicks growing at more similar rates in recent quarters than they have in years, shopping’s share of overall Google search ad clicks for retailers hasn’t moved much in the past year,” reports Merkle. “In Q2 2020, Google Shopping ads generated 60% of retailers’ Google search ad clicks, which was roughly in line with a year earlier. Excluding advertisers brand keywords, shopping generates closer to 90% of retailers’ Google search ad clicks.”

One aspect of search that has not fared well during the pandemic is location searches.  Since the beginning of 2019, Google’s phone text ad traffic that is generated by Google Maps plummeted from around 7% to just 1%. Except for searching for nearby restaurants to pick up food from, Americans haven’t felt a need to search for physical locations of retailers since it’s safer to shop online than in stores.

Americans continue to perform their searches on their smartphones in lieu of tablets. Merkle found that smartphones’ share of paid search clicks was 65% in Q2 2020 while tablet’s trailed behind at 3.5%.

If your clients don’t want to put all of their ad spending eggs in the paid search basket, encourage them to consider a multichannel digital campaign. According to AudienceSCAN on AdMall by SalesFuel, Sponsored Search Result Responders are also likely to take action after seeing ads on social media, receiving email ads and seeing internet banner ads.