Retailers Now Devote the Majority of Their AdWords Budgets to Google Shopping

Staff Report

Thursday, April 20th, 2017

Google Shopping ads captured more than half of retail marketers' AdWords budgets for the first time, according to new research from Sidecar. The company's statisticians analyzed 19.1 billion user sessions from retailers' e-commerce sites to produce the industry's first definitive account of the state of Google Shopping ads. The full report is available now: The 2017 Google Shopping Benchmarks Report.

The report examines performance data from 2016, and compares it to year-over-year data from 2015 and 2014. Highlights from the report include:

1. 2016 was a tipping point in the battle between Shopping ads and text ads. While text ads have long been synonymous with marketing on Google, Shopping ads are now retailers' preferred tool for selling products on the world's most popular search engine. In 2016, retailers spent more on Shopping ads than they did on text ads, devoting, on average, 53% of their AdWords budgets to Shopping ads.

2. Google Shopping ads accounted for 16.1% of e-commerce sales in 2016. This was a marked jump from 2015, when Google Shopping ads drove just 9% of total sitewide sales. The 78% year-over-year increase in 2016 cements Google Shopping ads' status as a mission-critical revenue driver for e-commerce marketers.

3. Retailers are embracing Google Shopping ads to convert mobile consumers. Google Shopping ads enjoy top billing on the mobile SERP—and their prominence is paying off. Mobile devices drove 29% of total Google Shopping revenues in 2016, up from 17% in 2015.

"Google Shopping has earned its place in retail," said Andre Golsorkhi, founder and CEO of Sidecar. "That's because the channel bridges the mega trends that define e-commerce today—visual content, mobile optimization, relevancy. This perfect storm is unseating the mighty text ad, which begs the question: What ad format will Google Shopping upend next? As more retailers expand their Google Shopping efforts, the typical e-commerce marketing mix could look dramatically different in the next 12 months."

Sidecar's 2017 Google Shopping Benchmarks Report compares the most critical Google Shopping KPIs, highlighting the variances in channel performance across industries. Also featured are recommendations from Sidecar's Google Shopping experts for optimizing mobile ROI and boosting channel revenues during periods of peak demand.

Other data covered in the report includes Google Shopping results during Holiday 2016—as well as the impact of AdWords' tablet bid modifiers, released in August 2016, on channel performance.