Online Advertising’s Relationship with Holiday Traffic

    December 23, 2008
    Chris Crum

Nielsen Online has shared some interesting data regarding advertising on the web during the holiday season. This look comes after finding that there was 10% growth in retail site traffic.

Nachi Lolla at the Nielsen Blog wondered if the advertising strategies of these retailers had anything to do with that traffic. Lolla writes:

Retailers in particular must have been in a tough spot when deciding how to advertise. Given the economy, they definitely want to be extremely prudent with their marketing dollars, even erring on the side of significantly cutting down on online advertising around the holiday season (as we can see from the chart below). To give you an idea, online advertising across the retailers we track in our Index was down quite a bit in the weeks leading to Black Friday and Cyber Monday on a week by week basis compared to 2007. For example, image-based impressions were down by 51% versus 2007 two weeks prior to Black Friday week. It seems the strategy retailers adopted was to hold back on advertising during the weeks leading to Black Friday, and invest in a “surge” just a couple of weeks prior to Thanksgiving/Black Friday, the most crucial weeks (a gain of 17% in ad impressions two weeks prior to Black Friday 2008 vs. that in 2007). I looked to see if retailers moved their ad dollars to sponsored links instead, but those impressions are also dramatically lower this year versus last. Overall, there is evidence that retailers have cut back on their ad investments, understandably so.

Looking at these two graphs, it is interesting to note the amount of display advertising compared to that of search. I wonder how much display advertising will grow proportionally against search advertising as new opportunities continue to arise in this area. Of course when the two are integrated as in Google’s display ads for AdWords, the lines begin to blur.