E-commerce Ad Spend to Surge 18% Amid Overall Decline, WARC Says


  • Brands are anticipated to spend $58 billion on e-commerce marketing this year, according to a brand-new WARC report. Advertisement costs throughout e-commerce websites, omnichannel merchants, and social commerce platforms are forecasted to increase by 18.3% internationally, while industry-wide ad spending will dip by 8.1%.
  • E-commerce huge Amazon is on course to make $18.1 billion from ads this year, up by 35.6%, while the larger ad market has increased simply 0.6%. In the very first half of 2020, Amazon’s ad organization grew 4.5 times faster than Facebook and 63 times faster than Alphabet, the report notes.
  • The boost in e-commerce ad spend comes in action to the rise in online shopping stimulated by the COVID-19 pandemic. Overall e-commerce sales will grow by 30.4% ($ 677 billion) to $2.9 trillion worldwide. As a result of the pandemic, shoppers are expected to spend $183 billion more online this year, per the report.


The WARC report is more evidence of how the COVID-19 pandemic has changed customer practices and accelerated the shift towards e-commerce. In-kind, marketing on e-commerce websites, omnichannel retailers, and social commerce platforms like Amazon, Walmart, and TikTok, respectively, has increased to fulfill consumer needs.

In spite of the dive in e-commerce ad spending, the report expects a general decrease in advertisement costs, echoing similar reports regarding the downturn in total ad invest. Previously this month, the Interactive Advertising Bureau’s report stated that ad officers anticipate general ad spending will decline by 8%.

“With ad investment flat or falling across the majority of media in the wake of COVID-19, e-commerce platforms– which have seen penetration balloon– are in a strong position to record reallocated spending plans by using sales information to demonstrate advertisement performance amid an unstable economic environment,” James McDonald, head of information content at WARC, said in a declaration.

WARC’s report likewise outlines which online ad platforms are acquiring ground during the coronavirus pandemic. Amazon is outmatching the more fully grown advertisement markets coming from the duopoly of Facebook and Google as demand surged due to its core e-commerce service. Amazon’s “sponsored items” ads saw an 87% yearly dive in click development, while direct sales from the advertisements surged 70%. Conversion rates for those advertisements had to do with five times greater than for Google’s shopping advertisements in Q1, per a Merkle report.

On The Other Hand, Alibaba, which is anticipated to make $23.5 billion from ad sales in 2020, now oversees the third-largest advertisement organization platform globally behind Alphabet and Facebook, the report discovered. Its usage of live streaming to drive e-commerce, which hasn’t rather caught on as much in the U.S., is anticipated to grow its sales to $171 billion this year, per the report.