By Wednesday, tens of millions of Americans had received stimulus checks from the government to aid with financial and economic struggles hitting the country during the COVID-19 pandemic. While portions of that money were undoubtedly spent on essential budget items, like rent and groceries, Merkle’s paid search data suggests that many consumers used part of that stimulus money on more discretionary purchases.
Advertisers across a variety of industries saw lifts in conversion rate and revenue yesterday, with some retailers reaching levels similar to 2019 Black Friday numbers. This includes some categories, like apparel, that have otherwise experienced significant revenue declines since mid-March. Clients in furniture, clothing, automotive, footwear, outdoor living, audio equipment, and cosmetics, along with non-profit organizations, all experienced significant day-over-day growth without any change in promotional or advertising strategy. While the amount of growth varied significantly, many clients sampled saw revenue changes between 40% and 100% day over day.
From a search campaign perspective, there are a few key actions advertisers should take in order to effectively manage through this change in demand.
1. Track performance closely for the next few days to see if demand continues
While the first round of stimulus checks have already been deposited, there may be some residual increased demand the rest of this week. Additional deposits may clear, consumers might be delayed in checking their bank accounts, or there may be additional stimulus money spent as recipients balance their personal budgets. Keep a close eye on revenue and conversion rates and adjust bids accordingly to align appropriately with demand.
2. Work closely to understand any issues in fulfillment or supply chains
Many retailers are operating with less inventory or smaller workforces during this time, and might not be equipped to handle a surge in customer demand. Be proactive in working to understand the state of your client’s or business’ fulfillment capabilities and adjust advertising spend if issues arise.
3. Inform your bidding calculations or algorithm of any anomalies
If performance falls back to pre-Wednesday levels quickly, consider excluding Wednesday’s data (along with any other anomalous days) from your bidder’s calculation. A significant one- or several-day increase in conversion rate can confuse a system that leverages recent historical performance to determine current bid levels.
4. Stay informed of news updates for any additional large-scale stimulus deposits over the coming weeks
We’re unlikely to see another large wave of deposits like this week, but advertisers should still stay informed of the stimulus check rollout plan. Should another large-scale rollout occur, use conversion rate and revenue data from Wednesday to estimate potential increases.