The cost of online marketing is increasing as brands like Temu and Shein engage in fierce bidding wars for visibility on Black Friday. This surge is evident in the rising “cost per click” for popular Google search keywords. Retailers are intensifying their efforts to secure top positions in search engine results to attract the largest possible share of online shoppers.
This competition has sharply driven up the prices they are willing to pay for prime advertising space. Both Temu and Shein have adopted aggressive marketing strategies, targeting their rivals’ keywords to outrank them in search results. This tactic increases their visibility and diverts potential customers from competitors.
The increased marketing costs reflect a broader trend in the retail industry, where online visibility on key shopping days like Black Friday is crucial. Retailers are willing to incur higher advertising expenses to capitalize on the surge in consumer spending during this period. Helen Reid, a London-based reporter, noted that the competition extends beyond keywords, influencing the overall marketing strategies of major retail companies.
As brands vie for consumer attention, the stakes continue to rise, making it a winner-takes-all scenario in the digital marketing arena. Data on Google search ads compiled for Reuters reveals that Temu has been bidding on popular keywords such as “Walmart Black Friday deals,” “Kohls Black Friday,” and “Bed Bath Beyond.” Similarly, Shein has targeted keywords like “Walmart clothes,” “Zara jeans,” “Mango dresses,” and “Nordstrom Rack shoes” in the U.S.
The cost of keywords like “Walmart clothes” has soared, rising 16-fold over the past two years.
Temu and Shein search wars
Even generic keywords such as “shopping” are witnessing significant price hikes. “It’s brutal out there, it’s really hard,” an eCommerce expert told Reuters. “Increasing the cost per click decreases the return on marketing investment.
For some retailers, this can result in unprofitable outcomes, severely impacting those dependent on paid search ads to drive their business.”
Paid search ads can contribute between 15% to 30% or more of a retailer’s online sales, while sometimes accounting for up to half of their marketing budget. Compounding these challenges, retailers may face a shrinking customer base this year. Recent research indicates that many consumers are less inclined to participate in deal events.
The report states that 39% of shoppers are more likely this year than last to purchase products they immediately need. Additionally, roughly 59% of consumers intend to spend the same amount or less on holiday shopping compared to last year. Consumers are also feeling overwhelmed by the volume of promotional offers.
According to the same research, a third of consumers feel “bombarded” by sales, and 41% believe the frequency of promotions makes the deals seem less special. The battle for consumer attention and spending this Black Friday is proving to be a tough one, as retailers navigate the heightened competition and shifting consumer behaviors.
