As consumers stayed home, delivery services for every product ranging from staple groceries to office supplies became the norm. 

Now that 2022 is almost here, we see that there simply is no going back to “normal” shopping patterns. People are accustomed to ordering their retail items online and want them delivered quickly, cheaply and sustainably.

As our shopping behaviors continue to depend on eCommerce, customer acquisition costs are growing. Our data shows that programmatic spending from retail brands has increased drastically. Not only that, but companies are building out their own eCommerce platforms and omnichannel advertising services.

Programmatic Spending from Retail Brands is Increasing

According to Shopify’s 2021 Future of Commerce Report, ten years of eCommerce growth took place in just 90 days last spring. As retailers closed and people stayed home, a record 16.4% of global purchases took place online. 

As more shoppers went online, global wholesalers like Walmart and Costco ramped up their online capacities, making the digital marketplace increasingly difficult to enter for new competitors.

“eCommerce as a percentage of total global retail sales will also continue to grow over the next five years,” write the authors of the report. “This trend is not only a tailwind for digital brands, but also a headwind as the world of eCommerce becomes more crowded and competitive than ever.”

This translates to higher ad prices, increased customer acquisition costs and higher pressure on brands to build out their omnichannel strategies.

According to MediaRadar research, in 2021:

• 43 thousand companies have spent $6.6 billion on programmatic retail advertising so far.
• Retail programmatic spending is up 136% YoY (January – October), an increase of $3.8 billion.

Top advertisers—Target, Walmart, Harbor Freight, Michaels and Menards—have spent $1 billion together (accounting for 15% of all spend from programmatic retail advertising this year.)

Increased Ad Spending Isn’t Enough—Retailers Get Creative to Drive Value

Increased spending on advertising from top retailers isn’t the only retail trend we’re seeing. 

We’re seeing companies like Saks and potentially Kohl’s split their “bricks and clicks.” In order to focus more on their digital strategy and grow faster, retailers are separating their brick and mortar stores from their online stores.

“It is the most logical thing for a retailer to do at the moment. You get fresh capital, a chance to invest in a high-growth digital business, money to hire new people, and you expand the business, and can still invest in the slower growth store business.” explained a retail expert about Kohl’s .

Another creative move came from Lowe’s. The home improvement retailer recently announced its debut of Lowe’s One Roof Media Network, a platform offering omnichannel advertising services for brands in the home improvement and home furnishing category.

According to Marisa Thalberg, Lowe’s executive vice-president, chief brand and marketing officer, “Lowe’s deep understanding of the home lifestyle customer and real-time trends” helps brands “develop custom, comprehensive approaches designed to deliver on their business goals.” 

Top brands in the beta testing have already seen positive results from their ad campaigns. Lowe’s reported that one kitchen and bath brand saw a 700% return on ad spend.  

With retail giants building out their own ad services, they are bringing in programmatic ad revenue on top of their traditional earnings. And partner brands have more ways to attract customers in this highly competitive digital environment. With this shift, we expect to continue to see increased programmatic purchasing in the retail category. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

Amazon is on pace to make up 50% of U.S. eCommerce market share this year, forcing tech companies to build up their eCommerce technologies. 

At the same time, large online retailers are investing more in programmatic advertising. 

The latest updates in eCommerce investments 

North American online sales grew nearly 32% last year, according to eMarketer. With this massive shift, tech companies have been pouring money into building out their eCommerce integrations and solutions. 

#1 Taboola acquired Connexity

Taboola, a leader in discovery and native advertising distribution, went public last month. Using this momentum, Taboola is investing more in eCommerce. It recently purchased Connexity, a marketing technology company that helps eCommerce brands reach shoppers using publisher and social influencer networks. 

With this expansion into retail, Taboola will give brands another option to reach shoppers without advertising using the biggest tech companies (e.g. Google, Amazon, etc.)

#2 Twitter attempts to win over DTC brands

Though other social platforms already have their ad solutions dialed in, Twitter is not too far behind. It recently announced its new eCommerce ad features. 

“Twitter has spent a lot of time thinking about new ad products around [shopping]” said Megan Jones, exec VP of media at Digitas to AdAge. “I am impressed with the audience extensions and third-party partners they brought in to enable shopping experiences.”

National brands are now experimenting with the updated carousel ad offering. Later this year, the social media platform will unveil more eCommerce integrations with Jebbit and VidMob.

#3 Google Offers New Integration With GoDaddy Web Stores

Earlier this month Google announced that GoDaddy online web stores could integrate their product listings across Google-owned sites for no additional cost.

Stores can now easily list their items across Search, Shopping, Image Search and YouTube.

Google is the first place most internet users in the U.S. go to search for a product. This is an exciting update for consumers, but even more for the online stores who’ll have a stronger way to reach more shoppers.

#4 Amazon Isn’t Giving Up Market Share Without a Fight

Amazon is now offering a new ‘brand referral bonus.” When brands run digital advertising campaigns that link to the product listing on Amazon, rather than another online store, they’ll give brands a bonus of about 10% of the product’s sale price.

“Amazon is one of the best places for brands to launch new products,” said Mike Miller, worldwide director of Amazon brand program and selling partner development. “We’re launching the Brand Referral Bonus to help brands make their marketing spend go further.”

As large retailers and tech companies ramp up their eCommerce game, Amazon is incentivizing small brands to drive traffic to the eCommerce giant. 

MediaRadar Insights

The race to attract online shoppers is clearly on. 

Amazon’s new referral program is just one of its strategies. The company is also investing heavily in programmatic. What are Amazon’s rivals up to in the programmatic space?

Methodology: We looked at: Alibaba, Amazon, Etsy, Google Shopping, SheIn, Target, WalMart, and Zulily to examine the change in programmatic ad buying over January – June, 2019 – 2020.

• This year, these brands spent $282mm in programmatic advertising. This is up from $197.1mm in 2020 and $48.9mm in 2019.
• Their increased ad presence indicates that though Google has threatened to remove access to third party tracking, this is still a very popular channel of advertising for these brands.

While Google Shopping, Amazon, Target, and Walmart have other channels to promote their presence, Alibaba, Etsy, SheIn, and Zulily are purely digital enterprises. 

• Their spending habits have decreased from 2020 to 2021. Alibaba, Etsy, SheIn, and Zulily spent $21.5mm in 2020, and $4.7mm in 2019.
• Their current spend, $19.9mm, makes up only 7% of the group’s total.

Amazon, Target, Walmart, account for 93% of the rest of the spend, with Amazon spending the most in programmatic advertising.

Google Shopping accounts for less than 1% of all advertising spend within this group of companies. Because Google is the first point of discovery for most shoppers, there likely isn’t a need to advertise their eCommerce services. 

For more updates like this, stay tuned. Subscribe to our blog for more updates.

Airfreight, in particular, is booming. At the same time, ocean transport rates are spiking. It’s no surprise these industry trends are showing up in advertising. 

Which shipping and logistics ad buying behaviors are changing, and which are returning to 2019 patterns?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

The Current Status of the Shipping & Logistics Industry  

Major shipping companies are doing exceptionally well amid the pandemic. 

DHL, for example, reported that they earned $5.8 billion in profits in 2020. These record levels were $900 million higher than previously expected. The largest drivers of these profits came from Express and eCommerce Solutions units. These services delivered products to homes and businesses often by airfreight. 

Airfreight boomed during the pandemic, and construction isn’t slowing down. Largely spearheaded by Amazon, U.S. airports are dedicating more space to freight shipments. Analysts predict that air cargo will hit 45 million tons each year by 2050. 

Some forecasters don’t think it’s a sustainable model. Yet, Amazon is now focused on buying aircraft rather than leasing, and other shipping companies, like French container-shipping firm CMA CGM, are now investing in airbus jets. 

Meanwhile, ocean freight rates for dry bulk goods spiked 17% between March 1st and 2nd, mostly due to large countries, like China, stocking up in case of another shortage. 

“The freight story is all about demand and supply for dry bulk vessels,” said a former U.S. grain trader. “There’s just too much dry bulk movement right now and not enough vessels to cover it.”

The large demand for dry goods currently far outweighs the available transports, but analysts are hopeful that rate increases will be short-lived. 

MediaRadar Insights

In January and February of 2021, there were 392 shipping advertisers spending $3.3m in the B2B space. The same period in 2020 saw 291 brands spending $3.7mm.

Overall, spend fell 11%, while the number of brands grew. More brands advertising in the B2B space may be looking to capitalize on this industry’s growth during the pandemic.

Print has started to see a resurgence in the B2B shipping and advertising space. 93% of the $3.3mm ad spend in B2B shipping and logistics was placed in print. Though digital advertising increased in 2020 and print fell dramatically (53% overall), spending trends in 2021 are starting to return to patterns observed in 2019.

The top 10 brands spending in both digital and print media in 2020 accounted for 30% of total ad spend in the category. It’s important to note that even though DHL hit record operating profit levels, the company currently doesn’t have any advertising presence. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.

At the same time, fleet automotive advertisers are keeping their advertising budgets modest. 

Will spending recover in 2021?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

eCommerce Drives Fleet Management Growth

While eCommerce grew significantly last year, the demand for fleet vehicles increased, and the market responded accordingly. 

In December of 2020, Cox Automotives acquired Dickinson Fleet Services, or DFS, the most recent in a series of moves towards strengthening their fleet services brand, Pivet. The brand now includes an extensive fleet and fleet maintenance and management services.

Cox Automotives isn’t alone in bolstering its fleet business.

Earlier this month, GM debuted a new division, called BrightDrop, focused on B2B electric vehicles (EVs). GM and Brightdrop are responsible for everything from the battery technology for the electric vans to motorized transport boxes and software for cohesive fleet management, location services, and more.

Fleets Adding Electric Vehicles as Infrastructure Becomes More Widespread

FedEx will be the first to add BrightDrop products to their fleet, but other big names—such as WalMart and Amazon—have also been adding electrical vehicles to their fleets. 

EVs are becoming increasingly popular, and the manufacturers offering them are already reaping the benefits. GM’s stock price rose 32% this month, at least in part due to enthusiasm over their EV-related plans.

“In 2021 as charging infrastructure grows, businesses recover and restart their fleet electrification plans, and state and federal tax incentives return, the American EV industry is poised to flourish anew, fulfilling, and perhaps even exceeding, expectations for growth,” explained Alison Alvarez, CEO of Analytics Company Blastpoint.

A ChargePoint report lists the top three reasons that fleets are increasingly adopting electric vehicles:

1. The rising availability of EV models: The number of available electrical medium- and heavy-duty models is predicted to double by 2023.
2. More affordability: EV models offer approximately 20-25% cost savings due to efficiency and lower maintenance fees.
3. Environmental benefits: Corporations are becoming increasingly concerned about their environmental footprint and are taking the necessary actions to improve their impact.

As more manufacturers release EVs, others are building the infrastructure needed to support fleets. In 2020, an additional 6,000 charging stations were built across the US, and there was a 25% increase in the number of public charging stations.

MediaRadar Insights

Despite booming stock prices, ad spend for fleet automotive brands decreased in 2020. 

In 2019 ad sales for fleet automotives reached $102 million across print and digital sales. In 2020, this total dropped 30%—to $71.2 million. However, the total number of brands advertising fell by only 7%, indicating that the drop in brands was not the cause of decreased spending. 

In fact, fleet automotive ad sales started the year at a loss compared to 2019. The industry made progress towards improvement and YoY recovery in March, only to be set back again once the pandemic struck. 

In March, the industry’s ad sales were only down by 5%. This ended up being an isolated incident, and YoY ad sales were down by as much as 44% in October.

The top 5 fleet automotive brands—Autel, Peterbilt, Isuzu, Chevrolet, and Ford—were responsible for only $4.5 million in 2020 ad spend (across print and digital), or 6% of the market total. We can infer that the rest of the 2400 brands in the industry also kept ad spending modest.

Though the industry is going through major changes, companies haven’t incorporated electric vehicles into their ad creatives yet. As we see, creative is mostly focused on function or service. 

As companies continue rolling out new electric models and infrastructure, ad creative may begin to change and spending may begin to experience an uptick. However, there currently is no indication that spending is recovering quite yet.

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

But Amazon’s announcement that demand is so high that they need to hire 100,000 immediately, plus giving everyone a temporary raise, dismantles that image. What is really happening?

Amazon started only accepting essential supplies into their warehouses — and asked customers buying non-essential items to choose the ‘No-Rush’ delivery option. In India, Amazon stopped selling non-essential items all-together. 

But, at the same time, Amazon has allegedly placed large orders for retail products outside of the realm of groceries and hand sanitizer. 

It may be a chaotic rush to meet the demands of coronavirus now, but it appears that Amazon is looking to take up market share once things get back to normal.  

For Amazon, business is full steam ahead. But how are other eCommerce companies responding to consumers staying at home?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

What does coronavirus mean for eCommerce?

Companies with eCommerce sites need to be aggressive in the market right now.  It’s good for business (many on Wall Street are pegging eCommerce as a winning category during this time). More importantly, it’s good for the economy. 

And it seems so is the rest of the eCommerce market. Over the past month we have seen eCommerce sites like Amazon, but also companies like Zulily and Overstock.com, continually increase their advertising spend, more than doubling it in the span of a month:

Companies like Walmart and Target are currently experiencing high demand for essential items, just like Amazon. 

But we are seeing curious surges in non-essential shopping. Take for example:

• Alcohol: The alcohol delivery platform Drizly reported that sales from new customers increased by 500% and sales from repeat customers increased by 125% over the last few weeks. 

• Lounge wear: As more people work from home, they are buying comfier clothes online. Sold-out tracksuits rose 36% from January 1 through March 16 (compared to the same period last year) and the number of sold-out sweatpants increased by 39%.

• Electronics: Best Buy is seeing an increased demand for remote work products and freezers to store food for long periods of time. They have closed entrance to their brick-and-mortar stores, to be replaced with curbside pickup and home shipments. 

• Retail: In China, Nike has stated that online orders have offset losses due to coronavirus and the company is already seeing a rebound. This gives hope to other brands who already offer online shopping.  

It is too soon to tell exactly how coronavirus will affect eCommerce. At large, consumers have their minds on buying essential items and managing their fears of an economic depression.

But some eCommerce stores are set up to benefit from cooped up consumers who will eventually need or want to buy products other than groceries. 

Over the coming weeks, we will be highlighting companies and categories who are adjusting their advertising in response to the new, yet temporary, normal. While many businesses will face hardship in this difficult time, others, like streaming services, may see their business grow as a result.

These are interesting times indeed. Stay tuned. Subscribe to MediaRadar’s blog for daily updates surrounding the advertising industry’s response to COVID-19.