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2020 Google Ad spend research

Whilst the shock of COVID-19 may have passed, it is still having a global impact. In April 2020, we conducted a study on how COVID-19 was impacting Google Ads advertising. For industries like travel, fitness, dining, and construction, the pandemic has had a devastating impact, causing business performance to plummet. According to Statista, 89% of marketers delayed campaigns or put them under review.

However, it is not all bad. Businesses offering delivery services, sports equipment, and online education received an impetus to develop.

Time has passed, and things have moved on. We're used to wearing masks, observing quarantine rules, and resist panic buying key products when subsequent waves of the disease look likely.

The virus has become a part of our life, though not the pleasant one. With this in mind, we decided to conduct a more extensive study covering the period from October 2019 till November 2020.

We've analysed 30,000+ Google Ads accounts linked to PromoNavi and uncovered the major trends in ad spend and performance change across various stages of the pandemic.

Let's dive into what we've discovered…

The ad spend is not influenced by disease rates, but likely lockdown policies

The impact of the first wave of the virus on economies was sizeable, especially when the virus began to spread in Europe. By the end of March 2020, the overall ad spend decline, compared to the previous month, was about 30%.

Businesses were frustrated. It seemed that further decline was inevitable. But the reality turned out to be different. The bottom was reached in March, and, since April, we can see a sustainable recovery.

Source: Worldometers

Ad spend more influenced by the disease rate dynamics than the number of active cases. And this has its logic: a sharp jump in the number of cases forces governments to tighten quarantine measures, which results in stagnation in "sensitive" businesses.

However, the COVID-19 outbreak at the beginning of autumn did not bring serious consequences for advertisers. The ad spend in October 2020 was 3.7% higher than in September 2020, and 0.7% higher than in October 2019. This means advertisers are reaching the pre-crisis turnover. This is the highest level of ad spend since the beginning of the pandemic.

It is difficult to predict how things will change further. We assume that increasing demand before the Christmas holidays will have a knock-on effect on economies and particularly on advertising spend. In PromoNavi, we expect further growth in advertising costs, despite the local lockdowns.

Let's look through the changes in impressions compared with ad spend.

In March and April, ad spend decreased faster than impressions. Here we can observe how Google's algorithms work. While impressions were relatively stable, Google had to sell inventory at lower prices. The average CPC decreased in March by 23.5% compared to February.

This gap remained until June, meaning that advertisers who continued to show their ads were able to drive traffic on a lower CPC.

Another observation is that conversions remained stable all year. Advertisers reduced costs primarily on display and other brand campaigns with low conversion rates, focusing on search ads.

Difficult market conditions forced advertisers to quickly optimise campaigns and find conversion growth points. That is why, from May to June, we see a "delayed" growth in conversion rate growing. To put it simply, advertisers got a good kick to become more effective.

The affected industries strive for recovery

Travel and tourism is one of the industries that crashed during the first wave of COVID-19. The decrease in ad spend was crucial: advertisers reduced their costs by almost 50%. The CR followed the costs, decreasing to 3.2% in March

However, the lifting of COVID restrictions by the summer sparked the beginning of an industry recovery. While international borders remain closed, many companies focused on internal tourism, thereby supporting sales. As a result, the summer was not so bad. The ad spend continued to increase, peaking in August.

September and October were not as optimistic as August, but we can do nothing about the seasonal factors that always negatively impact ad spend in the travel and tourism industry at that time of year.

The other industries negatively impacted by COVID-19 showed similar trends. There were some differences, of course. For example, sport and fitness businesses adapted their model by providing online training. Restaurants supported sales by adding delivery services. Combined with more flexible quarantine measures instead of the previous total lockdown, this led to a step-by-step recovery.

Please note that there is pent-up demand in some industries. For example, there was a boom in the beauty and spa industry after the total lockdown in the spring. Keep this in mind when planning your advertising costs.

The booming industries show no sign of falling

Some industries are doing well during the epidemic, while others have received a serious boost to business. The latter include, for example, delivery services, sports equipment, and health insurance.

These industries show extreme growth during the first wave of the pandemic. There was a drop later but the ad spend was still higher than in months before COVID.

The new incidents of disease in the autumn caused an increase in ad costs. Tightening quarantine measures combined with the Christmas holidays could provide significant sales growth.


There are a few takeaways:

  • The impact of the virus on ad spend is not as strong as it was at the beginning of the pandemic. "Sensitive" industries are learning to live in a new reality, while others feel comfortable during a lockdown.
  • We see a clear recovery trend across all industries. Some of them have already achieved pre-COVID ad spend, while others will catch up soon. Regardless, ad spend is growing in all analysed industries.
  • The COVID crisis has become a reason to optimise Google Ads campaigns. While overall ad spend declined, conversions remained at the same level, which means advertisers directed the budget to more effective campaigns. PromoNavi automation tools play a significant role here. Using them, advertisers could easily save budget and drive more traffic.

Copyright 2020. Source:

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