Who Gains and Who Loses – The Changing Rules of the Game Online

Who Gains and Who Loses – The Changing Rules of the Game Online

Global events often affect the effectiveness of advertising campaigns. The COVID-19 epidemic is no exception. Companies are changing the way they operate, people are staying at home, and the world is reacting to the pandemic – turning to online news searches for answers to their questions and solutions to their new needs. Many industries have suspended their activities altogether, while others are capitalizing on the surge in interest and running strong e-marketing efforts. In essence, what we observe in our market is similarly reflected in global trends. Since production processes have slowed, we observe the impact of this on PPC campaigns for manufacturing and industrial goods. The cost per click rose by 5%, and conversion rates in this sector fell slightly, but advertisers are experiencing a painful 13% drop in search network traffic, according to observations by Core PR.

Looking at the SERP (Search Engine Results Page), we see that search engines may be looking for something completely different, so clicks (PPC) are not worth the advertising spend. For several weeks now, since COVID-19 became a pandemic, we have observed an average 21% drop in conversion rates. Of course, each industry sees different performance from Google Ads. – Core PR

Industries seeing growth in online metrics

Health and medicine

Industries gaining online

It comes as no surprise that many people are searching for information on how to protect themselves and their loved ones. As users turn to stores to buy everything from over-the-counter painkillers to essential medicines, many advertisers are finding it much easier to sell their products online, with ad clicks and conversion rates far higher than usual.

Tracking traffic trends on various websites offering statistics on the spread of the coronavirus infection is also a useful indicator of public sentiment. The total traffic to coronavirus-related sites over the past 28 days looks as follows: World Health Organization who.int 269.9 million, Centers for Disease Control and Prevention cdc.gov 334.8 million, European Centre for Disease Prevention and Control ecdc.europa.eu 11.0 million, Worldometer worldometers.info 1.3 billion.

Business management and the technology sector

On Google we will find additional tips and resources that help small businesses cope in these uncertain times, particularly when it comes to managing employees during remote work and developing project continuity plans. It appears that many advertisers are very active in this area. Overall, the number of searches from management rose by 23% since February 23.

As people prepare for remote work, office supplies have rapidly become essential in this sector. Searches for office supplies rose by 90%, paid search ad clicks increased by 35%, and the search conversion rate by 41%
As traditional retail focused on online operations, demand grew for the packaging and shipping materials it uses. This more than doubled search ad conversions (up 123%) and the ad conversion rate (up 107%).

Deloitte's analysis also indicates that hardware manufacturers may see strong demand from enterprises placing large orders for laptops and mobile devices to support employees now working from home.

IT spending forecasts point to steady demand for cloud infrastructure services and potential growth in spending on specialized software. Forecasts also predict increased demand for communication equipment and telecommunications services, as organizations encourage employees to work from home and schools switch to online teaching. IT departments will be relied upon for ordering devices, configuring resilient, flexible and secure networks, disaster recovery systems, IT security, etc.

The need for ever-faster access to data and automation will increase the focus on networking and communication hardware like never before, accelerating 5G network deployment and the adoption of 5G equipment.

Finance

Although financial markets are performing poorly, it seems that now more than ever clients are seeking experience, assistance and knowledge. In an industry that usually has some of the most expensive keywords and high cost per click, we are observing a drop in CPC and reduced pressure from a normally highly competitive industry. Many are also noting increased CTR (the ratio between the number of clicks and ad impressions, measured as a percentage) and CVR (the ratio between the number of people clicking an ad or viewing a page and those taking the desired actions).

Beauty and personal care

Over the past few weeks, many fast-moving consumer goods (FMCG) have enjoyed strong interest. Consumers are also looking for products such as soap and hand sanitizers, as well as personal protective equipment. We note a 41% increase in searches in the "beauty and personal care" category. Many of these industries are seeing a business boom on the SERP with lower CPC and significantly higher CVR.

In times of crisis, we feel the need to stay in touch and stay informed. Whether we are tracking new infections or getting information on best practices related to coronavirus prevention, tracking traffic to informational websites is also an indicator of public sentiment. A sharp increase in traffic would indicate that a growing share of the population is concerned about the situation. The total traffic decline of -4.1% in the recent period would suggest a slow return to normal. The top 5 websites in the "health" category recorded last week: webmd.com 29.2 million + 3.14%, verywellhealth.com 5.6 million -7.08%, mohw.go.kr 2.5 million -15.36%, folkhalsomyndigheten.se 1.7 million -31.45%, cdc.gov.tw 1.9 million -13.25%.

On-demand media

The "social distancing" measures that have been introduced mean we are consuming more entertainment at home. While most advertisers in the entertainment industry are seeing increased demand and generating a few extra conversions, on-demand media has surged and doubled its conversions over the past few weeks – sports by 30%, and "media on demand" by 109%. Also last week we recorded a +0.83% increase in visits to video and TV streaming sites, with the top 5 sites in the category recording: youtube.com 7.8 billion + 1.06%, netflix.com 732.4 million + 3.95%, YouTube.be 238.5 million -5.96%, imdb.com 121.9 million + 2.48%, dailymotion.com 59.9 million + 1.98%.

Gaming sector

The analytics firm Newzoo reported that isolation has caused an increase in time spent on games and money spent on them, as evidenced by data from the American telecommunications company Verizon, which stated that gaming traffic rose by 75% during peak hours. GSD (Games Sales Data) monitors game sales with digital downloads from the 16 largest companies in the gaming industry across nearly 50 countries in Europe, the Middle East, Africa and Asia. It also tracks physical sales (hardware and software) across 17 territories, allowing us to analyze the impact of lockdowns on both the physical and digital markets. Overall, across all monitored markets, 4.3 million games were sold over 12 weeks, a jump of 63% compared with the previous week.

Across all 50 markets, 2.74 million games were downloaded within a week from participating publishers, a rise of 52.9% compared with the previous week. In France, which went into lockdown on Tuesday, March 17, digital downloads rose by more than 180%. Spain entered lockdown on Saturday, March 14, and its digital sales rose by 142.8%, followed by a further 23.3% the next week. Italy is the country that has been in lockdown the longest, shutting down on Monday, March 9. In the first week of lockdown, sales of digital editions rose by 174.9%. In the second week of lockdown, sales of digital downloads fell by 11.7% week over week, but still far exceeded the normal level for the country.

As for markets before their lockdowns but in the "social distancing" phase, digital downloads still recorded growth. In the UK, digital downloads rose by 67.4% week over week even before the country began lockdown. Germany recorded a 60.2% increase in digital sales, and Australia a 26.5% increase in downloads. Across all 17 physical retail markets, game sales rose by 82% week over week to 1.58 million titles sold. The past month also saw a sharp increase in console sales (after more than two months of serious declines), by 155%. This was a widespread phenomenon, with significant benefits for the Nintendo Switch, PlayStation 4 and Xbox One.

In the first week of Italy's lockdown, console sales rose by 84%. In the second week of lockdown, their sales fell only slightly – by 1.8%. In Spain, when the lockdown was first introduced, sales rose by 27.7%. The following week they rose again by 66.1%. During the first lockdown period in France, console hardware jumped by 140.6% week over week. The previous week also saw a 17% increase in console sales. In the UK, console sales improved by 126.6%, then rose by 250%. In Australia, sales of gaming consoles rose by 19.6%, then jumped again by 285.6%.

From esports and events to development and retail sales, the gaming industry has proven quite resilient, but one must remember the negative impact of cancelled major events, trade shows and launches for this sector – for example, countless esports events have been cancelled, postponed or moved online. However, there is potential to thrive during the crisis, while traditional sports are unavailable.

Charitable and non-profit organizations

In times of crisis we often see the best in people. As COVID-19 spreads, non-profit and charitable organizations have noted:

• A 10% increase in search ad impressions.
• A 23% increase in search ad conversions.
• A 20% increase in the search ad conversion rate.

Google Ads runs many Google grant programs to enable non-profit organizations to advertise for free, but keeping them compliant is often challenging. Fortunately, it is clear that in this crisis they are finding interest more easily than ever.

Industries that are "frozen" and facing major online changes

Real estate

Frozen industries

Both the primary and secondary markets appear fairly stable. In times of crisis, real estate has always been a good investment, and recent years have seen very high demand in the housing market. On the SERP, search-related traffic also remains relatively stable – with little change in search volume, CPC or conversion rates. But some important changes could have serious consequences for the industry.

Both the development and construction industries are recording falling conversion rates (-53% and -7% respectively) and fewer searches. A slowdown in these areas could reduce the supply of real estate in the future.
Both real estate listings and real estate agent searches recorded some increase in cost per click (+15% in the last month). However, the real estate market recorded a 25% drop in conversion rates, while real estate agents and brokers saw a 30% increase. As consumers become increasingly unable to participate in normal operations, more people will rely on a professional agent to arrange a viewing instead.
There was a significant increase in searches for companies with a well-developed digital offering
Moving and relocation services rose by 11% while maintaining good CTR, CPC and CVR.

Automotive

The automotive industry shows a noticeable 30% drop in the average conversion rate across the sector over the past few weeks.
We observe that search engines are shifting their preferences in the automotive industry toward used cars and their repair:

Retail

Some would assume that e-commerce would surge and traditional retail would see fewer transactions. But while some consumers turn to e-commerce to replace regular shopping, others are uncertain about their future income. This instability affects user conversion rates from search ads – conversion rates for retail fell by -14%. Large retailers, including Amazon, are reducing their Google Ads budgets, resulting in a -9% drop in CPC on Google that leveled out the ROAS (a metric indicating the return on a specific advertising campaign) for most retailers. Ironically, wholesalers appear to be seeing the opposite trend – a 14% increase in CPC and a 9% increase in the conversion rate.

As many customers are quarantined or working from home, we expect to see various patterns of entertainment consumption emerge. By tracking streaming services and social media platforms, we can see the latest eCommerce trends, as well as where people are spending their time.

E-commerce and shopping rose by 2.8% last week, with the top 5 sites in e-commerce and shopping recording: ebay-kleinanzeigen.de 34.9 million + 5.5%, shopping.naver.com 23.9 million -2.72%, shopping.yahoo.co.jp 24.6 million + 5.94%, n11.com 15.5 million + 1.5%, coupang.com 14.4 million + 2.68%.

Education and development

Over the past few weeks, the number of students affected by school and university closures in 138 countries has nearly quadrupled – to 1.37 billion, which is more than 3 out of 4 children and young people worldwide. In addition, nearly 60.2 million teachers are no longer in classrooms. The education market has become a key target for the largest technology players. Apple, Google and Microsoft are competing to gain an edge in the world of education technology.

Schools and universities around the globe have been closed for several months, causing a forced increase in e-learning and training. Although teaching has changed, there have not yet been short-term changes in the performance of higher education advertisers. Prospective students have not changed their behavior on the SERP. Recent weeks have seen a slight increase in paid searches related to careers and vocational training (+10% and +8% respectively), but for now this is largely aspirational, as conversion numbers have not changed noticeably. However, global closures affect more than 91% of the world's student population. Apple has improved its software to manage the experiences of students and teachers. It recently launched a new iPad for $299 for schools with Apple Pencil support. Put simply, the stakes are high. Frost & Sullivan confirms that the education market generated $17.7 billion in revenue for technology providers. Of that total, 83 percent of the revenue is shared by Google, Microsoft and Apple. However, Frost & Sullivan said the market is changing, and the battlefield is shifting toward augmented reality and virtual reality tools, artificial intelligence, robotics and analytics.

Industries that lost the most online

Travel and tourism

The biggest online losses

Since borders are closed and businesses, governments and consumers are avoiding unnecessary travel at all costs, it should come as no surprise that demand for travel bookings has fallen. As a result, many advertisers in this sector are trying to convert new users on their sites. The problem for these advertisers is compounded by the fact that the number of flight cancellations, delays and restrictions is at an all-time high, making their ads more prone to mismatched results. In total, COVID-19 caused a -27% drop in the travel conversion rate, most notably in holiday packages at -50%, booking services at -49%, cruises at -44%, and air travel at -41%.

To mitigate some of these disruptions, you can:

• Add new negative keywords for COVID-19 searches, advisory-related and cancellation-related queries.
• Promote cheaper fares, easy cancellations and changes for future travel.
• Offer your customers travel insurance to ease concerns while also increasing the average selling price.

As the virus spread around the world, countries slowly closed their borders. Travel restrictions were introduced, and for many a holiday in a foreign country seems more risky than fun. Tracking the tourism industry helps us understand how the coronavirus is affecting the globalized economy. This includes air travel, hotels, car rentals, cruises and much more. For example, closely monitoring traffic to hotel booking sites can help understand the scale of the coronavirus's impact on this sector, as well as serve as an early signal of a return to normal.

Last week, in the "travel and tourism – flights" area, global visits fell by -13.9%, with the top 5 websites in the "air travel" category recording: aa.com 4.3 million -17.15%, southwest.com 3.6 million -13.35%, ryanair.com 3.0 million -2.13%, delta.com 3.2 million -19.39%, united.com 2.2 million -21.22%. Meanwhile, traffic in the "accommodation and hotels" section fell by -10.13%, with the top 5 sites in the category recording: booking.com 20.5 million -12.5%, jalan.net 6.2 million -17.57%, airbnb.com 5.7 million -14.88%, agoda.com 4.8 million -5.05%, hotels.com 2.2 million -14.81%. In turn, "car rentals" recorded -7.8% traffic in the last week. The top 5 websites in the category: enterprise.com 855.9 thousand + 2.39%, rentalcars.com 445.9 thousand -9.14%, timescar.jp 527.7 thousand -13.37%, hertz.com 420.8 thousand -11.45%, timesclub.jp 408.2 thousand -7.83%.

Food service

Many countries have closed restaurants and bars, dealing a heavy blow to businesses in times of social isolation. While many establishments are learning to switch to delivery and takeout service, positive data was hard to find in the SERP system last week. In the restaurants category last week we recorded an -18% decrease in impressions, and in "bars and nightclubs" as much as -26%. However, last week we recorded a 4.47% increase in visits in the "restaurants and online delivery" category. The top 5 websites recorded: doordash.com 10.6 million + 7.95%, dominos.com 7.6 million + 2.14%, ubereats.com 7.5 million + 5.89%, grubhub.com 7.2 million + 3.78%, pizzahut.com 4.8 million -11.12%.

Conferences (MICE)

$1.5 trillion in total GDP supported by global business events would place this sector as the 13th largest economy in the world, larger than the economies of countries such as Australia, Spain, Mexico, Indonesia and Saudi Arabia. Based on a direct GDP impact of $621.4 billion, the business events sector would rank 22nd in terms of economy size in the world.

The business events sector directly generated more output (business sales) than many large global sectors, including consumer electronics and computers, and office equipment. Most major conferences and MICE events have been cancelled or postponed to the fall. Clients are also trying to organize them virtually. Unfortunately, many companies rely on event marketing to fill out their business profile, so the cancellation of these events will also affect other companies. Since the outbreak of COVID-19 at the end of February, marketing specialists have noted a growing 33% reduction in conversions, as more and more events continue to be cancelled.

Function4's analysis – the largest platform for financial services-related events – shows the current impact of COVID-19 on 1,719 events planned in New York, London and Hong Kong in the second and third quarters of 2020. The situation affects 80% of events in April, most in New York – 84%. Overall, it affected 52% of events planned for Q2 2020.

7% of events were moved online and held virtually, although this number is expected to rise significantly. Events in the second quarter have already been scheduled and a "wait and see" approach seems to be prevailing. Notably, 1 in 5 events listed on individual websites (i.e. Function4) is still active. This highlights the need for corporate processes around updating and communication, as most events in April have been cancelled.

The direct impact of global business events shows the scale of the problem. Business events involved more than 1.5 billion participants across more than 180 countries, generating more than $1.07 trillion in direct spending, which covers business event planning and production, travel or exhibitor spending. Business events supported 10.3 million direct jobs worldwide and generated $621.4 billion in direct GDP. Taking into account indirect and induced effects, business events confirmed a total global economic impact: $2.5 trillion in output (business sales) and 26 million jobs.

Sports and fitness

Major sporting and league events have been cancelled and will not take place in the foreseeable future. As quarantines continue and community distancing efforts increase, gyms, pools and sports clubs are closed. In summary, many sports- and fitness-related industries are recording strong declines in conversion rates.

A notable exception is that sports programs – online training – have grown significantly over the past few weeks. The change in the search ad conversion rate since mid-February has been: online sports programs up 65%, sporting events down -74%, sporting goods -49%.

In many industries, COVID-19 has changed the online marketing market, customer needs and online behaviors. Due to the epidemic, future actions require redefinition and an understanding of the new rules. Social distancing is changing shopping and consumption habits. In total, the five largest social networks last week recorded a small -0.31% decline in visits (facebook.com 6.2 billion -0.63%, twitter.com 1.3B -1.23%, instagram.com 1.0B + 0.23%, whatsapp.com 486.2 million -3.05%, vk.com 459.2 million + 3.99%). Using global analyses from the Boston agency WordStream, which currently monitors online campaign spending (Google Ads) for nearly $20 billion, and the Israeli company SimilarWeb, which oversees traffic on more than 80 million websites and 3 million mobile apps, the trends and results described above can be seen to be confirmed.

Summary

The COVID-19 pandemic has thoroughly reshaped the online marketing market, and analyses by Core PR, WordStream and SimilarWeb show the scale of the changes. In the medical and e-commerce industries, conversions clearly rose – searches for office supplies increased by 90%, and the gaming sector saw a 63% jump in sales. At the same time, travel and tourism suffered the most, with conversion rates there falling by 27%. Interestingly, launching online campaigns for non-profit organizations brought a 23% increase in conversions, even though the traditional advertising budgets of many companies were frozen or cut.