According to a study conducted by click fraud prevention experts, PPC Shield, Amazon spent the most money on PPC (pay-per-click) in the UK. The e-commerce giant, which was founded in 1994, spent an estimated £50,398,721 on PPC between June 2020 and June 2021.
PPC is used by companies in various sectors to attract traffic to their websites. Search engines, such as Google, get paid every time someone clicks on a company’s advert and visits their website. It’s a common tactic in many company marketing strategies, but it can also work out costly.
Amazon spent over seven times as much money on PPC as the next biggest spender. British online retailer, Very, spent the second-highest amount on PPC at an estimated £7,062,758, which is a modest sum in comparison to Amazon.
At the other end of the top ten spenders is the supermarket chain Tesco, which spent just over £1 million between June 2020 and June 2021. Tesco spent its highest amount on PPC in November 2020. In this same month eBay, which was the ninth top spender, also spent the company’s highest amount on PPC. Tesco paid around £238,443, whilst eBay spent approximately £344,015 in the same month.
How much did companies spend on PPC in the UK?
Aside from Amazon and Very, there are several other companies that spent millions of pounds on PPC from June 2020 to June 2021. John Lewis, the British department store, spent the third-highest amount on PPC during this period. It is estimated that the company spent around £6,699,051 on their pay-per-click campaign to drive customers to their website.
Although John Lewis spends just under seven million pounds on their PPC strategy, the retailer’s advertising campaigns are perhaps most widely known for their Christmas adverts, which have reportedly been made and distributed for a similar amount of money.
In July 2020, Currys, the electrical retailer, spent around £806,418 on PPC. This was the highest amount that they spent on PPC over the course of the year, whilst they spent the lowest amount – £243,321 – in March 2021. In total, Currys spent an estimated £5,836,130 in total between June 2020 and June 2021.
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Sainsbury’s, Tesco and Asda were the only supermarket chains that were recorded as high spenders in the study. However, Sainsbury’s spent around £4,728,305, which was considerably more than the estimated £1,334,281 that Tesco reportedly spent on PPC from June 2020 to June 2021. Asda spent about £3,523,100, which placed the supermarket’s online PPC campaign somewhere in the middle.
As well as Very, Next was another retail chain that decided to use PPC as a way of driving traffic to their website. Spending slightly less than Asda, Next paid an estimated £3,221,471 on PPC according to the study. In June 2021, they spent around £334,026 on PPC, although they had only paid £154,910 the previous year in June 2020.
What is PPC used for?
One of the reasons that companies turn to PPC advertising is because the data is easy to measure and evaluate. This in turn can help with the planning of future campaigns, as well as how much money has been spent on this sole section of the marketing plan.
In addition, companies are able to present their products and services to a range of potential customers all over the country and even throughout the world. For an international e-commerce company like Amazon, this is especially helpful because they can tailor their basic advertising campaign to suit a particular customer base in different locations. PPC channels can also indicate where the company’s audience is located, as well as keyword statistics such as impressions and click data.
PPC can be a cost-effective advertising strategy because the companies are only required to pay if a user clicks on their advert and reaches their site. They aren’t just getting charged for the number of people that aimlessly scroll past their advert and don’t bother visiting their site.
However, companies that use PPC can also end up paying vast amounts on users that visit their site but don’t bother buying anything. Companies may choose to vary the number of adverts they use for their PPC strategy depending on how much they have spent in recent months and the volume of traffic that has come directly from these adverts.
In June 2020, the report found that John Lewis spent around £1,243,002, but a few months later in September 2020, they only spent an estimated £486,938. This could be because there was, for whatever reason, a smaller number of site visitors clicking on the PPC adverts. On the other hand, John Lewis may have scaled back on its advertising strategy due to the high cost and therefore fewer people were seeing the PPC adverts.
Amazon and Very solely operate online, which is why they were recorded as spending the most on PPC. However, retailers and supermarket chains such as Sainsbury’s and Next are more likely to spend a higher portion of their advertising budget on physical as well as online adverts because they don’t necessarily want to attract a customer base to their websites alone. They, along with other high street stores, have a higher likelihood of advertising in more traditional methods to direct footfall to their physical shop properties.
Which month saw the highest spending on PPC?
None of the companies in the study had consistent amounts that they had to pay in regards to PPC each month. For example, John Lewis spent an estimated £1,243,002 on PPC during June 2020, but only about £88,071 in March 2021. Asda, another big spender, paid an estimated £150,105 towards PPC in October 2020 and then spent around £402,687 on the marketing strategy in the following month.
Companies are required to pay a certain amount every time their advert is clicked on by an individual. This means that their expenditure can dramatically change depending on buyer demand or the number of adverts that they are producing and are using PPC for.
Argos, along with several other companies featured in the report, had smaller price variations each month than some of the other businesses. The lowest amount that the catalogue retailer spent on PPC in a month was about £189,798 in March 2021. December 2020 proved to be the most expensive month as Argos paid out an estimated £633,892 for the advert clicks to their website.
Prices varied at an incredibly vast level for Amazon, as they paid about £10,274,536 on PPC in July 2020, which was approximately eight million pounds more than they were estimated to have paid six months later in January 2021.
Very paid a considerable amount of around £6,598,808 in March 2021, which was the majority of their total £7,062,758 PPC expenditure throughout the year. Up until this point, the average spend per month didn’t reach above £70,000.
Tesco paid a moderate £30,753 in June 2020, which was the lowest amount that any of the ten companies in the survey paid on PPC. However, the supermarket’s expenditure had gone up to £318,943 in September 2020. Over the following months, Tesco’s PPC expenses see-sawed dramatically – in November 2020, they paid around £238,443, which decreased to £90,816 in December 2020 and then rose to £113,897 in February 2021.
Due to the nature of PPC, the amount that companies pay can change on monthly basis. However, businesses can set a smaller budget on their initial adverts so that there is a limit on the amount they would have to pay on potential customers visiting their websites via the adverts.
The ten companies recorded in the survey spent a combined total on PPC that reached over £88 million. Of this, Amazon was the biggest spender having paid around £50 million between June 2020 and June 2021. Previous reports have also found that Amazon is the company that spends the most on PPC in countries such as Germany, Italy and France.
PPC advertising has increasingly grown over the past few years and companies look set to spend even more on the strategy in their advertising campaigns in the future. However, as the study has shown, the cost of pay-per-click advertising can vary month to month and can doesn’t necessarily follow any set trends.