Article

Jonathan Marciano
Jonathan Marciano 17 February 2021

Which Digital Advertisers are Seeing the Biggest Wins Since Covid-19?

It is widely understood that the post-Covid-19 revival is digital. New opportunities are ready for nimble players at a time when McKinsey found the economy vaulted five years forward in digital adoption in the space of eight weeks as a result of Covid-19.

Following unpausing of online ad spending, small businesses have been rewarded: ad clicks on their Google Ads online advertising campaigns rose 308% in the latter end of 2020, based on data from 6400 small businesses we analyzed.

The biggest winner has been ecommerce players, where companies have seen a 670% rise in clicks on their campaigns, followed by entertainment (668% increase) and education-based businesses (646%).

There are a number of reasons that some players are set to prosper in 2021 as advertising sees an uptick and long-term trends that will benefit players throughout 2021.

Consumers are Relying on Ecommerce More than Ever

The biggest winners are those digital advertisers prioritizing ecommerce. In fact, around 25% are investing in new technology or aligning their IT systems in some way in response to the Covid-19 pandemic. It is not hard to see the push to digital advertising among all sectors.

Imagine, for instance, an Indian restaurant on the Upper West Side which like thousands faced the shuttering of indoor dining. Transitioning to deliveries, the next stage is buying Google Ads advertising "Indian takeaway on the Upper West Side". This situation has been replicated across millions of businesses and sectors across the world.

It is no surprise in our analysis of online click growth by sector, that ecommerce leads the way. In addition, a quarter of SMB brick and mortar stores launched ecommerce capabilities as a direct result of Covid-19 and 90% have considered or implemented new delivery services. This has been the background to new spending on digital ads and pre-pandemic levels of clicks as inventive players are showing.

Will Douglas, co-owner of Docks Beers in the UK moved online from a previously entirely physical sales presence at the brewers' tap room. He said: "As an owner, I have come to view the business through digital eyes, rather than just physical versus virtual sales."

Matthew Ross, a millennial and co-owner and chief operating officer of sleep and mattress review website The Slumber Yard, credits advertising as one of the reasons his company exceeded $2.5 million in revenue.

Platforms from Google and Facebook to Hulu Stepping up

Google – which relies on prosperous small businesses - has committed funds to allow them to advertise. Google deposited $340 million worth of account credits— into SMB Google Ads accounts. The ad giant also introduced new options during the advertising pandemic. People searching on their mobile phones for local services like air conditioning repair or carpet cleaning will now be able to book those services directly through Google.

Small businesses, using a Google tool that lets them easily set up advertising campaigns, were also able to promote their business for free on Google Maps until the end of September 2020, highlighting services they offer such as curbside pickup or delivery. Facebook providing credits of its own, also launching a new interface called “Business Suite” targeted at small businesses that have struggled.

TikTok, the leading platform for short-form mobile videos, has launched a new TikTok Back to Business program. The company is offering $100 million in ad credits for small businesses advertising on the site. Small businesses that are eligible for the ad credit program can claim a one-time ad credit worth $300.

Blake Chandlee, Vice President, Global Business Solutions at TikTok says: "We are continuously building for the future and aiming to meet the growing needs of our partners. We’re excited to continue supporting our community by providing the tools and resources for SMB owners to navigate these challenging times".

Disney-owned Hulu also launching a “self-service” tool to make it easier for small and medium-sized businesses to buy ads on its streaming service for as little as $500.

Record Rush to Register New Businesses

Surprisingly, perhaps the pandemic has yielded the largest Increase in American entrepreneurship. Dave Lavinsky, co-founder of Growththink, says: "Specifically, 931,310 new businesses were started in Q2, up modestly from 917,680 in Q2 2018 and 910,070 in Q2 2019. But the more interesting story started in Q3 (July/August/September). In in Q3 of 2020, we saw more new businesses started in the United States than in any quarter in history.

Lavinsky says: " Realizing they need to be responsible for their own financial destinies, these entrepreneurs are opting out of the traditional workforce to start their own companies." Meanwhile, in the UK, 85,000 additional companies are likely to be created in 2020 as the Covid-19 pandemic coincided with a spike in incorporation. This has further sparked the rise in online advertising.

Support of Core Digital Tech Stack Growing

Companies enabling enhanced advertising for small businesses are also booming despite the pandemic. Adriel, a South Korean startup, bring automated ad-buying to small businesses has seen ad spend grow and further investment.

Adriel co-founder CEO, Sophie Eom, says: " We see that even in the midst of tough times, many startups and entrepreneurs are not giving up their businesses. In fact, they are shifting their focus and investments into more digital to reach their customers.” Similarly, website-creation business, Wix has seen new users increase by a startling 50 percent to 3 million as small businesses focus on digital transformation. 

ClickCease which prevents click fraud for tens of thousands of small businesses more than doubled revenue growth during Covid-19. Such services have been seen as mission-critical for ensuring growth by small businesses.

Challenges Remain

Though there is much for SMBs to be positive with the start of 2021, it is worth remembering that digital-led growth is not equally distributed. In fact, 40% are currently not using paid digital advertising at all and, among those that do, the average number of digital channels used is just 1.3.

Finally, for those that do invest on online ads, there has been a long-term trend towards click fraud and bot attacks. As Google points out, "hackers frequently look at crises as an opportunity, and Covid-19 is no different. We have found a thriving underground ad click economy, ranging from auto click bots, to pay per click sites, connecting ads-to-be clicked with freelancers.

Conclusion

The renewal of digital advertising represents a digital-first strategy among small businesses accelerated by Covid-19. The hyper-targeted opportunities available through PPC advertising have become even more important as online businesses have taken up the call to advertise and interact online as a necessary measure: with 51% of businesses reporting increased online interactions with their clients.

PPC spending will continue to provide a powerful and proven means for growth for small and medium-sized enterprises. The rewards are already being seen with restored levels of clicks to campaigns – a precursor for renewed optimism and growth.

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