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E-commerce Ad Spend

E-commerce ad spend doubled as social distancing behavior took hold

New data shows that e-commerce sites doubled their advertising spend between mid-February and the second week of March, as social distancing started to become the new norm for consumers.

Multi-channel ad spend. E-commerce ad spending jumped from $4.8 million the week of February 17 to $9.6 million the week of March 9. The data, released by media sales intelligence firm MediaRadar on Friday, encompasses advertising spend across national TV, print and digital media, including websites, Snapchat, YouTube and podcasts.

Source: MediaRadar

Why we care. Earlier data from Quantum Metric indicated that e-commerce sales for retailers that also have brick and mortar locations ” saw an average revenue weekly growth rate increase of 52% and an 8.8% increase in conversion rates” between January 1 and February 29. Many merchants have reported e-commerce sales exceeding rates of Black Friday and Cyber Monday levels.

This unplanned spike has caused supply and fulfillment challenges. Chinese manufacturing plants are just now getting back to full capacity after being offline since mid-January.

For its part, Amazon is hiring 100,000 workers to meet fulfillment needs and announced last week it is will only receive essential items to its warehouses. That means sellers that rely on Amazon for fulfillment will not be able to restock their inventory for at least four weeks. We may see e-commerce advertising slow in these weeks if e-commerce sites experience sustained stock-outs and fulfillment challenges. Amazon began curbing its own advertising on Google in late January and essentially stopped running Google text ads as of March 11, according to digital agency Tinuiti.


 

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