Warc sees ecommerce adspend softening pandemic cuts

For much of 2020, marketers have struggled to keep their adspend from being gutted by the COVID-19 pandemic. However, as these companies and brands have realised the enormity and spread of the virus and the hammering businesses have taken, they have had to course-correct by making sweeping cuts to their marketing budgets to keep costs under check.

Now, industry body Warc's latest report suggests that even as marketers continue to make deep cuts, the sharp increase in ecommerce advertising may help some firms soften the impact of the pandemic.

According to the report, brands will spend over $59 billion on ecommerce advertising in 2020, with investments across ecommerce sites, omnichannel retailers and social commerce growing 30 times faster than the wider online ad market, as brands intensify lower-funnel tactics in response to COVID-19. 

Prior to 2020, adspend across all internet formats was growing at a similar rate to ecommerce sales worldwide. However, a wider and deeper availability of ecommerce ad inventory will give brands a chance to get the attention of homebound consumers. Ecommerce platforms are well placed to capture these reallocated budgets by using sales data to demonstrate ad performance and ROI, the report notes. Overall, COVID-19 will result in an additional $183 billion being spent online by consumers this year. 

Despite this seeming promise, ecommerce platforms worldwide have seen varying degrees of success with their ad metrics. For instance, in China, while Alibaba controls the world's third largest ecommerce ad business, its share has been slipping at home, with rivals JD.com and Pinduodo racing ahead. Elsewhere, Amazon's revenue from this business has crossed $18 billion in 2020, a growth of over 35% over last year.