Apparel in Paid Search – How Do the U.S. and U.K. Markets Compare?

Last week we looked at Apparel advertising in Paid Search in the United Kingdom, analyzing Desktop Text Ad activity on the top 2,288 Apparel-related keywords on Google.co.uk from January through July 2015. To provide a comparison with the U.S. market, we also examined the same number of top Apparel keywords for the U.S., 2,288, during the same time period on U.S. Google. Below are our findings.

Spend

Given that the U.S. is a significantly larger market than the U.K., it’s no surprise to see far higher spend figures for Apparel retailers on U.S. Google than on Google.co.uk.

As previously detailed, AdGooroo found that U.S. apparel advertisers spent $289 million sponsoring the top 2,288 Apparel keywords on U.S. Google from January through July compared to £41.2 million or around $63.4 million advertisers spent sponsoring the equivalent number of Apparel keywords on Google.co.uk during the period.

For an additional perspective, we also looked at the average spend for the Top 20 Apparel advertisers in both markets during this time. The Top Apparel advertisers on U.S. Google spent an average of $3.8 million from January through July compared to the U.K. Top 20 average of £653,000 or around $1 million.

U.S. & U.K. Apparel Advertisers Investing More in Desktop Text Ads Than Overall Industries

Notably, both the U.S. and U.K. Apparel verticals are spending on Desktop Text Ads at a higher rate than the overall industry in each market. U.S. Apparel advertisers increased their spend on the 2,288 U.S. keywords by nearly 17% in 2015, from $248 in the first seven months of 2014 to $289 million in the same period this year. Overall U.S. spend on Desktop Text Ads by all industries increased by only 10% year over year, going from $9.2 billion spent from January through July 2014 to $10.1 billion spent during the same time period in 2015.

The £41.2 million U.K. Apparel advertisers spent on the 2,288 U.K. keywords in the first seven months of 2015 was a 23% increase over their £33.6 million spend during the same period last year. Overall U.K. spend on Desktop Text Ads by all industries actually decreased by 11% year over year, dropping from £867 million in January through July 2014 to £773 million during the same time this year.

Impressions & Competition

There are two primary stats that illustrate why Apparel paid search spend is higher in the U.S. than the U.K. One is the number of impressions gained, which shows that U.S. advertisers are reaching far more consumers. The top 20 U.S. Apparel advertisers in the study gained an average of 114 million impressions during the period compared to an average of 38 million impressions for the top 20 U.K. advertisers.

The other stat is regarding competition—there are far more Apparel advertisers competing in the U.S. market than the U.K. From January through July, 17,334 advertisers bid on the U.S. Apparel keyword group compared to 7,132 advertisers who bid on the U.K. keyword group during this time—a 143% difference.

Cost Per Click

Higher competition in the U.S. also helps to explain why the average cost per click (CPC) is higher for Apparel retailers in the U.S. than in the U.K., as increased competition is shown to drive up CPCs. U.S. Apparel advertisers paid an average of $1.28 or £0.59 per click in the first seven months of 2015 compared to an average cost per click of $0.49 or £0.32 for the U.K.

Top Advertisers

Apparel US and UK Advertisers USE THIS 2015

Amazon is at the top of both Top 20 Apparel advertiser rankings, coming in at #3 in the U.S. and #1 in the U.K. Amazon-owned Zappos took the top spot in the U.S. The only other advertiser that both lists have in common is Net-A-Porter, which ranked #16 in the U.S. and #13 in the U.K. Otherwise, both markets are well-represented by omnichannel retailers, including mass retailers and department stores, and online pure-play retailers.

Branded vs. Non-Branded Keywords

Apparel U.S. and U.K. Keywords 2015

One notable difference between the U.S. and U.K. markets is in the area of branded and non-branded keywords. Fourteen of the Top 20 Apparel keywords on Google.co.uk, ranked by Paid Search spend, were branded terms, including ‘nike’, ‘boden’, ‘adidas’ and ‘ann summers’. In contrast, fourteen of the Top 20 Apparel keywords on U.S. Google were non-branded terms, including ‘prom dresses’, ‘wedding dresses’, ‘shoes’ and ‘custom t-shirts’. This difference in top keywords suggests that U.K. apparel shoppers are more brand-oriented than U.S. shoppers, who are more focused on finding the type of apparel item they need via the search engines, regardless of brand.

Along with higher competition, noted above, the concentration on branded terms in the U.K. Top 20 keywords may also help explain why CPCs are higher in the U.S. than U.K., as brand terms are often less expensive than general terms. Further, the focus on brand terms in the U.K. Top 20 most certainly explains why the average clickthrough rate for the U.K. Top 20 Apparel keywords is 8.65%, far higher than the 4.22% average CTR for the U.S. Top 20, since shoppers searching for brand terms are more likely to click on ads from those brands.

Weddings, Prom & Christian Louboutin

Despite these differences, U.S. and U.K. Apparel advertisers do find common ground. Both the U.S. and U.K. Top 20 Apparel Keywords include a concentration on generic terms related to two special occasions: weddings and proms. There are four such terms in the U.K. Top 20 and five in the U.S. In addition, the Top 20 Apparel Keywords by Paid Search spend in both the U.S. and U.K. include the branded keyword ‘christian louboutin’, revealing the popularity of the French shoe designer in both markets.

Birkenstocks are Back (in the U.S.)

Lastly, if you needed any further evidence that Birkenstock sandals are back in style here in the States, consider that the branded keyword ‘birkenstock’ ranked #11 on the Top 20 Apparel keywords in the U.S., with nearly $1.3 million spent on the term by 50 advertisers from January through July this year. During the same period in 2014, the term ‘birkenstock’ ranked #35 with $699,000 in Desktop Text Ad spend.