The Effects of Covid-19 on the PPC Market

Pandemic, coronavirus, change, uncertainty: the monosodium glutamate of everyone’s daily life since around late February 2020.

In every aspect, Covid-19 has had a 360-degree impact and has caused a paradigm shift for everyone, from individuals to communities, not to mention businesses.

Many had to temporarily suspend their operations, while the luckier ones managed to shift their operations online. Unfortunately, some were forced to close permanently.

Now we are facing a new phase. Gradually, we are seeing a return to shared and public life, a new ‘normal’. Companies are preparing to restart while following strict safety precautions – yet another adaptation that businesses must face.

How we will emerge from this is still unclear: there are numerous and diverse predictions.

However, in digital advertising, it’s risky to base your strategy on personal predictions. To understand how this period will affect the market, it’s best to have data at hand. And where else can we find this information but in the world’s largest advertising market?

Before you continue reading, if you are not very experienced in Google Ads, CPC, and conversion rate, we recommend taking a look at our article on the main metrics of PPC campaigns.

How the Coronavirus Has Affected Searches and the PPC Market in Recent Months

As anticipated in a Seozoom study, the exponential increase in free time and the instability that characterized this historical moment led people to research and search for what they needed online. Google searches increased globally by 40%.

However, according to Word Stream data, pay-per-click ad impressions on the search network decreased by about 7% in March and April, while conversion rates dropped by -21%, almost as if we were all on vacation.

The highlighted element is the paradigm shift in service consumption. For instance, the sports and fitness sector saw an increase in organic searches, but businesses in this field experienced a significant drop in their conversion rates. With gyms closed and people unable to go out, they turned to home workouts.

Similarly, in the home and garden sector, organic searches recorded a predictable increase (after all, we are spending more time at home, so we need to keep ourselves occupied!), while the Google Ads market experienced a pause in March, likely due to user economic uncertainty. Once again, DIY is the winner.

However, three mismatches between organic and paid searches caught our attention:

• Automotive Sector: Organic interest in the sector grew, as if users wanted to be ready to resume their passions once the pandemic is over, while Google Ads registered a 30% decrease (though it’s difficult to attribute this entirely to Covid-19).
• Finance: With markets in distress, organic searches for insurance and physical banks continued to decline. It’s surprising that financial services (including investments and insurance) saw an increase in CTR between 23% and 30%, and the average cost per click, generally high in this sector, dropped.
• Fashion and Runway Shows: Public safety and strict assembly restrictions led to the cancellation of events worldwide. The search volume for live entertainment decreased by 24%, and conversion rates by 30%. However, during this period, users didn’t give up staying informed. They searched for products to buy online and fashion advice. Organic searches registered a surprising increase.

In some cases, the change in habits, priorities, and needs observed in organic searches is also reflected in pay-per-click results.

Predictably, in the case of the Health and Medicine sector: many advertisers experienced significantly higher clicks on ads and conversion rates than usual. This data is confirmed by the increase in organic searches for online pharmaceutical products.

As mentioned in the fashion sector, people haven’t neglected their appearance: the personal care market has seen a considerable increase in searches and a surge in the SERP with lower CPCs and much higher CVRs.

Couch and Netflix? The foundation for surviving boredom in isolation! The consumption of home entertainment has predictably boosted organic searches in all categories, and on-demand media conversions are through the roof.

Sectors Facing the Most Challenges

Once again, we can find correspondences, but they are less positive.

Sectors unable to deliver their services due to the crisis are experiencing a decline in organic searches, as well as negative results in ad campaigns.

The real estate sector has experienced a significant collapse, especially in real estate development and construction, where conversion rates have decreased.

However, there’s a major exception: real estate agents and brokers have seen a 30% increase in conversions. Consumers are likely planning to rely on a professional agent to set appointments in the future.

Bars and restaurants have been severely hit during social isolation. People have turned to home cooking during this period, and although many businesses have shifted to delivery and takeout services, ad impression for restaurant searches dropped by 18%, and for bars and nightclubs, by 26%.

Less than optimistic prospects for the travel sector: advertisers are struggling to convert. The increase in searches for flight cancellations, delays, and restrictions has exposed ads in this sector.

Keep Calm and Campaign On

Analyzing organic search data allows us to identify a common thread: people have changed how they consume many products and services but haven’t given up normality.

Despite being in confinement, none of us has stopped consuming. As we’ve seen, some sectors have increased their revenue (does “toilet paper” ring a bell?) while others have found new space, as never before.

The mandatory shift to remote working has led to a 35% increase in clicks on search ads for office supplies, with conversion rates up by +41%.

And how much have we ordered online during this period? Those involved in packaging and shipping supplies have seen conversions on search ads double (+123%).

Covid-19 has greatly limited traditional retail and has made e-commerce essential for most businesses.

Small businesses advertising online have achieved particularly positive results in April, as their major competitors, like Amazon, struggled to manage the influx of orders and withdrew most of their ads from Google (not to mention the sudden comeback of local grocery stores, which suddenly had lines of people outside).

Help has also come from the big players on the web. During this period, Google has offered advertising credits to small and medium-sized businesses.

Facebook has also made itself available to companies, even though it probably hadn’t anticipated a significant drop in advertising costs.

In Conclusion

Reducing the budget for your PPC campaigns might be tempting during a crisis, but now more than ever, it’s necessary to enhance your online presence and attract new customers.

It’s important to stay updated on the dynamic market conditions: Google has created a Google Trends page dedicated to the Coronavirus, to better understand the local market context and user sentiment.

At the same time, it’s good to keep an eye on performance metrics and prepare for any changes.

It might be time to reallocate your budget from one campaign to another with better performance, or to add new negative keywords to optimize ad placement, or to think of new campaigns to cater to users’ new needs.