Early Online Shopping Behavior Takes Pressure (and Performance) Away from Cyber Monday

Shopping online “from the office” is different when people are still working from home

Cyber Monday 2020 is in the books!

Historically, one of the key factors for the existence of the “Cyber Monday” phenomenon has always been online shopping behavior riding the wave of increased online traffic when office workers get back to their desks after the long weekend. This originated with faster internet speeds at work compared to those at home but has persisted even as high-speed internet and mobile shopping have gained traction over the years.

But what happens when those same workers aren’t going back into the office on Monday?

Can Cyber Monday survive the global pandemic?

Cyber Monday 2020

As we look at the full impact of the “Cyber Five,” 2020 edition, the answer is yes, and no. According to reports, Americans spent a record $10.8 billion online on Cyber Monday, up 15 percent from last year, making it the largest online shopping day in U.S. history. That eclipses the $9B reported on Black Friday, four days earlier.

And yet, many are saying Cyber Monday 2020 was a disappointment this year, but with the caveat that they are still expecting strong growth for the overall holiday season. The underlying reason for this seeming contradiction goes back to that origin story. Cyber Monday exists because people go “back to work,” physically. In the absence of that behavior, consumers seem to have been much less beholden to the calendar.

The clearest evidence for this across Kenshoo accounts is by looking at year-over-year advertiser sales for Ecommerce Channel Advertising.

In all, the average daily sales for the pre-thanksgiving period was up 70% over last year, while that of the Cyber 5 was down 5%, netting out at an increase of 41% for the entire 30-day stretch. Cyber Monday, in particular, was down 21%, but this analysis may not include latent sales data, so that number may improve with subsequent analysis. The core trend remains, however, and other sources have cited similar “pull-through” behavior, where shopping ramped up before the holiday weekend itself.

Cyber Monday 2020 ad spending

Turning to advertising spending across channels, we see similar results. For each of the key online advertising channels, average daily spending for the 25 days leading up to Thanksgiving increased more than the spending for the Cyber 5. For the Ecommerce Channel, year-over-year daily spending for the pre-Thanksgiving period grew 82%, compared with 55% for the Cyber 5. Paid Search saw an increase of 28% for the ramp-up period versus 10% for the holiday weekend, and Social Advertising budgets were up 24% before the holiday and just 5% from Thanksgiving to Cyber Monday.

Perhaps the broader story is that the key dates on the holiday calendar have been the focus for brands and shoppers alike that there is less room for growth there. All of the excess demand from our increasingly online shopping experience shifted to the rest of the season because that is the path of least resistance.

Nowhere is this more apparent as in Paid Search, as the biggest year-over-year growth in the channel across the Cyber 5 itself came on Saturday and Sunday. Same-advertiser spending on each of those two days was up 18% over last year, while Black Friday and Cyber Monday increased 7% and Thanksgiving was up just 2%.

Now, none of this means the end of Cyber Monday or the Cyber 5. It just means that 2020 is weird, and we already knew that. Compared to the 25-day “ramp-up” period before Thanksgiving, the Cyber 5 still saw huge increases in daily spending. Ecommerce Channel Ad spend increased 3.1X on Black Friday, and 2.7X on Cyber Monday. Paid Search was up 2.8X on Black Friday and 2.9X on Cyber Monday, and Paid Social grew 2.1X on Black Friday and 2X on Cyber Monday, all compared to the average daily spend from November 1 to November 25.

Specifically, Ecommerce Channel Advertising and Paid Social saw spending increase the most on Black Friday, while Paid Search is the last holdout for Cyber Monday yielding the greater investment. For whatever it’s worth, that advantage flips back to Black Friday if you consider shopping campaigns only within the Paid Search channel. This is consistent with what Kenshoo has reported in previous years.

Ecommerce channel advertising

The same holds true if we look to advertiser sales revenue for Ecommerce Channel Advertising. Volumes were up 1.6X on Thanksgiving, 2.9X on Black Friday, and 2X on Cyber Monday. Overall, the average daily sales for the Cyber Five was 1.8X higher than the pre-holiday period, even if the year-over-year growth perhaps wasn’t as robust.

It’s one thing to say that spending increased for the holiday period. The perhaps bigger question is what drove those increases? All things being equal, increases in spending in the Ecommerce and Search channels reflect increases in specific shopper activity, namely viewing products and searching for related terms. In the Social channel, it often reflects increased interest in target audiences.

Of course, all things are not equal, particularly when it comes to ad prices. Here we also see sharp increases in the Cyber 5 compared to the pre-holiday period. Ecommerce clicks cost 16% more on Thanksgiving, 45% more on Black Friday, and 53% more on Cyber Monday, compared to the pre-holiday period, with an average across the five days that was 30% higher than that of the previous 25 days.

Paid Search click prices increased 27% on Thanksgiving, 66% on Black Friday, and 83% on Cyber Monday compared to the pre-holiday average, for an overall increase of 52%. Paid Social ad prices, when considered on a cost per thousand impressions (CPM) basis, rose by 32% on Thanksgiving, 79% on Black Friday, and 91% on Cyber Monday, resulting in an overall premium of 63% for the whole weekend.

So what happens now?

Online shopping doesn’t just stop after Cyber Monday, and the normal ebb and flow of online shopping behavior seems to have been disrupted. The pre-Thanksgiving growth has been promising, both for online retailers and perhaps the economy at large, but we will have to wait and see how much both consumers and brands have in the tank to finish out a holiday season, and a year that has no historical precedent for digital marketing or otherwise.

Request a Demo of Kenshoo