Aaron Conant  0:18

Happy Thursday everybody. My name is Aaron Conant, I'm the Co-founder and managing director here at BWG Connect. We're a networking and knowledge sharing group with 1000s of brands. And we do exactly that we network and knowledge share together to stay on top of newest trends, strategies, pain points, and partners that are shaping kind of the cutting edge of the digital landscape. Today, I spend the majority of my time advising brands, and that startup the fortune 100 up every vertical, and it's from those conversations that we get the topics for the different events that we do, we're going to do over 200 educational informational webinars this year and close to 100 in person small format dinners that are pretty much the same, just educational, informational, no sales pitches, all around networking and knowledge sharing. And so I encourage anybody, if you want to have a conversation about what's going on, we'd love to have those with you. With that's where we get the topics. And also would like to take any recommendations that people are, you know, different products that are doing great things for, you know, look for a follow up email from us. We want this session to be as educational informational as possible. So if you have any questions, just drop them in the chat, drop them in the q&a. And we'll get those answered in real time. Also, were to do like something really fun, which is just kind of do a little bit of trivia, as we go through here. I think we have three different trivia questions. And we're gonna ask you to jump into the chat and drop and answers and the first one to answer the questions correctly, we're going to shoot over an Amazon gift card. The last thing is we're starting this three to four minutes after the hour. And we're going to wrap this up with at least three minutes to go in the hour as well, we're going to make sure that we give you plenty of time to get on to your next meeting without being late. And so with that, I am we're going to kick this off. You know, a lot of questions around cyber five and really great friend partner support of the network today and boasts over at NetElixir is more data driven than anybody, anybody I know in this space. And just as always willing to jump on and share what they're seeing across the landscape. They're dealing with a ton of people and just really data driven. And so you want to kind of kick it over to you if you wanna do a brief intro on yourself. And that'll be great. And then let's jump into it. Sounds good.

Udayan Bose  2:24

Absolutely. Absolutely. Thank you so much for having me on this. This, I think is our third or fourth consecutive cyber five webinar. So four consecutive years, I believe, with you guys. And this year has been I think, I mean, every year I've been sort of saying this in 2020 and 2019 every year sort of springs her perception of surprise for different reasons. But thanks so much for having me, I just do a quick introduction of the company. NetElixir where I'm like I can see many of the folks who have joined probably know us already, but we have been around for over 18 years now. We are more of a growth marketing agency and we help eCommerce brands, find and engage high value shoppers and acquire game changing insights have been around and invested more than 7 million hours in developing our new house. It's a very hands on very tech heavy approach. Talking about tech, we have our AI powered marketing platform called LXR insights. Which by the way, during this holiday season, Alan was a massive massive advantage. Because we were able to pre identify those high value shoppers and target them very precisely through Google and, and Facebook. And we also happen to be one of the 27 out of I believe more than 7700 agencies now in the US to be a part of the global leadership subjects that's our most recent say claim to fame. I see many of you who have joined today have already contributed but we also run a nonprofit foundation called the Udaan Foundation, which tries to give some hope to a lot of underprivileged but very deserving and bright girls from from in essentially from the so called underprivileged sections in India. And we sponsored their 11th and 12th grade the high school and four years of college and also help them get a job. So we are, we are we are super privileged and humble humbly accept that this is this is a huge responsibility on us and anyone who was interested to contribute, please do check out the website it is called Udaan Udaan-trust.org if you are interested in donating because even a $10 goes a very long way you can really scan that this this overall barcode and just make the payment data such we can you can find this on Amazon smile also. A little bit about me I have I started the company back in 2004 and try to really build a company which brings together a lot of thoughtfulness and a lot of research and the entire process around this is actually believe it or not, our 19th holiday season. And this would actually be our 15th Holiday results webinar that we have done. So it's incredible. The same research and the part sort of gets me into some of the some of the college engagements as well. So I do some guest lecturing at Cornell, the Indian School of Business and CUNY, and very privileged to be an Innovation Fellow in Columbia Business School as well. Some of the results, I mean, as adult has given me a pretty high tack to really live up to I am, I am not very sure which one I'm deserving of that, but I'll try to share some of the results that we have seen during cyber phi, which is Thanksgiving to Cyber Monday, just a few days back, we have really aggregated a lot of search, marketing and website data. And this is just to give you an understanding of the of the of the size or volume, it's more than 70 million website sessions during cyber five. We captured it separately from mobile and desktop, though I must say that the the lines are blurring very quickly. And mobile very clearly is the is the primary screen at this point in time, we have extensively used our own AI platform, LXR insights to gain a lot of consumer insights. And as I mentioned, this is our 15th annual cyber five results report.

Just directly to the numbers Jumping right in, we saw 12% year on year growth in terms of online sales during cyber five, just those five days. And which brought our November growth to about 9% year on year. This was definitely an uplift over what we had seen in the first 10 months of this year. And we believe that the entire Amazon early access day really started that holiday shopping. And we were pleasantly surprised to see some some solid demand through the entire month of November. It was obviously accelerated by also the fact that the business has really started offering some very deep discounts. I mean, in terms of percentage discounting, went up to almost about 40% discounts, which we have not seen her in for a very, very long time.

Aaron Conant  7:09

It's been a few years, right. So I mean, the last couple of years when people had an inventory crunch, the idea, you know, and they were short, the idea was like, Why do I want to incentivize it to move faster, potentially go out of stock? Exactly. So they were lower discounts, because they knew they were probably gonna go out of stock anyway. So 40%. And other quick question that comes in is around this 12%? Is that across multiple categories? Is that a combined

Udayan Bose  7:32

There are six categories, we have considered that I'll go into each category level as well.

Aaron Conant  7:37

Okay. Essentially, in others, if you have questions along the way, drop into the chat or the q&a, and we'll get them answered.

Udayan Bose  7:45

We normally got to split the overall percentage increase across the different regions. And in West we saw 12% year on year online increase. Central was very strong at 15%, Northeast 5%. And South was about 8%. So it is like all across. I must say I was a little surprised to see that northeast lag. So I think the question that we were asking internally, at NetElixir, it was Was it because of maybe I don't know, the inflation pressures are felt a little more out here in the northeast, I don't know. But that's just a hypothesis. But I was really surprised to see that northeast sort of came at about 5%. In terms of orders and revenue by day, and this is. And this really was sort of leading to Aaron's question after this as well. But it was, it was pretty spread out. If you really look at it, no surprises, Cyber Monday was the biggest day 30% of the overall cyber five sales happened just from Cyber Monday. And Black Friday followed closely. So 27%, the trends were very similar last year as well. So no major surprises in terms of split, per se. But one of the areas where we have done research, which was surprising, I must say, was just average order value and so on.

Aaron Conant  9:01

Yeah. So I think it's a great way. So we're going to I'll just jump in here really quick. So if you want to if anybody wants to jump into the chat, the first one to answer the question, we'll shoot over an amazon giftcard to which day had the highest average order value, the highest day Ovie? Do you want to drop it in the chat? The first people first person to answer and I'll just pull up the chat right here. Looks like everybody. Oh, just in time. Was it? Christian? Christian did it. Yes. All righty. So I think well, if you want to jump to the next one, I believe I think it's Friday and we'll see if you Yeah,

Udayan Bose  9:43

Black Friday essentially be the other days in terms of average order value. So Christian, congratulations. You're absolutely right. And I think many of you thought about it like this when I

Aaron Conant  9:53

came in like Christian Phil Sarah gave her a non stop room, but just in the nick of time. anyways, so black trimmer chances we're gonna do this two more times. It's too much. Yes.

Udayan Bose  10:06

One $81 I mean, it was interesting because last year as you can see, surprisingly probably Thanksgiving was the number one in terms of ARV not Cyber Monday but Thanksgiving. But this time it was it was Black Friday, very definitely hard to beat out. All the other days. Those Sunday came pretty close. But that's just just just answering your question. We have tried to break it down in terms of the category wise eCommerce growth. This is, again here on your online sales growth, not orders code, but sales revenue growth in the apparel November ended at about 10%. Again, this is our customer data set, which is mostly midsize and large eCommerce companies, retail eCommerce companies all 100% We sort of 100% work with retail and direct to consumer apparel 10% in November overall 16%. During cyber five, we beauty continued to be strong for our database. So 22% gifting really became strong 12% Home Improvement now just a clarification I mean Home Improvement includes skewhome furnishings plus home improvement, so it's just a very broad category we have considered it. So anything from data, say blinds, window coverings, rugs, all of this has been improved included in the home improvement part. Finally, sort of after the entire year lagging and being negative. Finally, sort of we almost was flat, but plus 1% hardware and tools continue to be slow, at least for our data set and pet supplies was roughly flat minus 2%. So overall aggregated riverboat plus 12% year on year online sales growth. But as you can see it very clearly skewed towards two or three categories. The top three are the massive, massive drivers for this entire training. I see some questions coming in. I mean, Aaron, do you want to tackle the questions now? Or should we? Should I continue?

Aaron Conant  11:57

Yeah, let's go ahead and tackle them right now.What products fall under Home Improvement?

Udayan Bose  12:04

Yeah, so that's the same question. So Jennifer, I think Home Improvement were considered anything from Python lighting, to rugs, to blinds, and so on. So it's a fairly widespread, so like Home Improvement plus home furnishings, not entirely home improvement from that perspective here.

Aaron Conant  12:22

Yeah, and the the next question, just what about electronics?

Udayan Bose  12:25

consumer electronics, the reason we sort of excluded This is I think the fluctuations are too dramatic. And there was a very clear correlation with the brand as well. The others, we were able to really reduce the brand effect, because we wanted to get to get some clean data, you really have to ignore the brand effect, right? Some of the brands are so strong, it's really difficult to difficult for them not to really skew. So that's the reason we have not included consumer electronics, but overall, just giving you a sense of actually very strong consumer electronics bounced back massively, again, in terms of sales revenue overall. And I'm including the stronger brands that you've worked with as well, to about plus 10%. year on year. Now, the first 10 months was minus

Aaron Conant  13:10

Even with Jeff Bezos saying don't go out and buy a brand new TV. Interestingly,

Udayan Bose  13:15

I mean, yeah, it's it's a fairly wide array. That's a great question. But that's a great question. I'm crippled by buying a lot of phones. Let's just put it that way.

Aaron Conant  13:26

Okay. Can the year over year change in home improvement in hardware tools? Do you think it can be attributed to the pandemic where people were doing a lot of work on their

Udayan Bose  13:34

100%? 100%. I mean, I mean, if you really look at it, Home Improvement and hardware and tools, very clearly benefited from the COVID Bump. I was actually around looking at our numbers from two years back 2020, the that that COVID holiday season, and home improvement numbers and hardware and tool numbers were just off the charts at that point it even last year was extremely high. So most definitely, I think, still the industry is catching up to the post COVID times and settling down. So yep, you're absolutely right.

Aaron Conant  14:06

Awesome. I love this slide. And I'm sure I'm gonna leave it here just for a couple I leave here for another 30 seconds or so as people try to you know, copy some of this stuff down. Is this deck available? Yeah, absolutely. doesn't share the deck. I absolutely do share the deck. Okay, awesome. So a couple questions, one that comes in around any data regarding gift card.

Udayan Bose  14:24

So gift card, we have not separated it out. But this gifting essentially is includes online flowers, gifts, it includes actually greeting cards, and other gift items as such. So this is purely from the gifting sites that we worked with or the gifting clients that we work with. It does not include gift card or separated out gift cards separately as that.

Aaron Conant  14:48

Now, right here, can you share a little bit more about your dataset and how you're able to add

Udayan Bose  14:53

Data set is 85 retail and direct to consumer clients with eCommerce revenue annually of about 20 million plus, and who have more than 30 to 35% of their annual revenue happening just in the month of November and December.

Aaron Conant  15:12

Okay, awesome. Love it.

Udayan Bose  15:15

So getting any precise data set, so let me get on. Yeah. So we saw some app interesting average order value increases, well, now when I say average order value increase, this is basically the basket size increase right? Now, this is all sales revenue. This is not the audits. So from that perspective, there is understandably an inflation components will tell them this as well. So for example, hardware and tools 21.91%, it is not that the number of units in the shopping cart went up dramatically, there was a pretty big, big inflation impact impact in play here as well, like 21.94%. For that category, the inflation number is close to about 13%. So I think you really have to consider that when you really look into each one of them. Apparel inflation, impact was not really as much it was close to about 2%. After discounting, not even that beauty Again, very similar, not not really a major, major impact. Beauty, we saw the number of units in the shopping cart go up. Gifting was pretty flat gifting though there was an inflation impact. So the number of orders actually sold were lower. Home Improvement hardware and tools both had a big inflation impact. As I mentioned, hardware and tools, there is a 13%, inflation, and home improvement, the number is close to about 8%. Pet Supplies, again had an inflation impact. So the number of audits actually were lower. But still, if you really include the price of the items going up, it was about 2.11%. So overall, I think the ARV was about 8.6% Higher essentially. Any questions happy to answer that, but I'll sort of keep moving on to the next one, or the top Dayparts. We're always curious because we run a run around the clock operation. To really keep a tab of the trends on a very real time basis. We have, as I mentioned, our own technology, LXR insights. But we have teams who are working literally 24 by seven. So we wanted to always check as to how can we really maximize these windows of opportunity where people are searching, shopping. And actually completing the purchase, essentially, to search shop buy is the pattern that you sort of keep a track on. And for that reason, we keep a very close track.

Aaron Conant  17:31

And I'll go back one I was on a very people saw it. Well. Maybe we can jump out of the next one. We have to go

Udayan Bose  17:38

I'm so sorry.

Aaron Conant  17:40

Otua said so the next one I want to jump in if you want to jump into the chat, but first How is gifting category defined and then I want to jump in with another like quick little quiz for people.

Udayan Bose  17:51

Gifting essentially includes gift cards, it includes online flowers, Teddy Bear says it's a fairly wide range of items, which are all classified into the gifting category as such.

Aaron Conant  18:02

Okay, awesome. Now next one. I want to we drop it in the chat here. And the person closest to us the the quickest has already put it without knowing Oh, but Oh, awesome. Now let's go percentage. Maybe Sony saw what percentage shoppers shop from 6am. to noon throughout cyber five.

Udayan Bose  18:27

to six, same to starts at zero basically midnight the previous night to 6am. It was about 4.5% 6am to noon was about 32% 26.6% was noon to 6pm. And actually the largest was 37% 6pm to midnight. So Scott, it's not noon today. So it's basically 6pm to midnight. The last which is to be understood as well, because that is the time a lot of shopping anyway, sort of happens customarily as well. The the percentage is very similar Aaron last year as well. So no major surprises. No major differences there.

Aaron Conant  19:11

Yeah, I think I have to read. I think we'll redo this second one. Yeah, right after, you know, right after the next slide that we get to and we'll redo this one and we'll get it before we show everybody. It'll be fine.

Udayan Bose  19:26

So

So please feel free to interrupt me or in regards. Okay, I'm going in my flow. Yeah, that's the reason. I'm really quick. How big was the impact of mobile this year? No, this was,

Aaron Conant  19:37

this is a great spot before you go to the next one. Okay, so on Thanksgiving Day, and this is a percentage of people want to guess in 2022. Right, what percentage accounted for from a mobile perspective, what percent was that attributed to mobile orders on site? All right. Oh, no November's coming. Oh. Let's see here as well. Yeah.

Udayan Bose  20:10

Someone who has come the closest I will Yeah, right there, Tim, but you must remain entirely our data sets. So they say entirely our data set. And what we have is 58%. So I saw someone sort of put in 60%. Out there comes the closest, the ARV still continues to be low, but 58%. Now, you must understand that this is a wide spectrum of categories, right. Hardware and tools, the percentage mobile contribution is lower. Apparel duty, the percentage contribution is, I see it.

Aaron Conant  20:45

Yep. 60%. Sorry, Phil. Yeah.

Udayan Bose  20:50

So this was I think the trend overall, we have tried to break it down by category as well. And as I mentioned, I mean, the the specific usual suspects, right, apparel, beauty gifting, all of these are very strong, mobile first categories. And the others are catching up Home Improvement still is 50%. But because a lot of the stuff is custom as well, when you're buying, let us say custom blinds or custom window coverings. That's the reason the maybe still it said 50%. But other than that, I think overall, the numbers are extremely strong. I mean, 58%. I had made a statement two years back, I'll go back to that. Aaron, just to go back down the memory lane 2424 months back, not that I really want to go back to the COVID times memory lane, but still sort of mentioned it there and mentioned that would be about 60% in 2022. So we have come pretty close, John, I think you are spot on the 60% was our guests were bought about 58%. So that's I think the number back in 2020 was actually shot up it went up to 52%. So it's interesting to see slowly but surely the percentage mobile contribution move up. One another concerning fact, despite the Mobile Share, the the time average time taken by an eCommerce site to load retail or direct to consumer eCommerce site to load is still pretty slow. Any guesses? Anyone as to what is the average load time of an eCommerce website page? Is it less than 5%? More than 510 15 1.5? or less? I mean, I really wish David really, really wished Allison? Yes, the number per Google's research is 15.3 seconds. Let me repeat that 15.3 seconds. So just think Listen, wow, open. I agree. Allison, wow. If you really optimize it, why? Why on earth? Are people not really optimizing this? Because you're losing so much. In terms of conversion? That's what just befuddles me, I don't know. So that setting can attend. This is the first time where we are sharing some Amazon advertising trends. The number of Amazon advertising customers that we manage has progressively been going up. So this time it I mean, we had statistically relevant data set, just being very statistical about it. Some of the curious friends the first, we wanted to compare the advertisers who are offering deals versus those who are not offering deals, right. So the folks who are offering deals, at least in our data set again, they saw a CTR click through rate left of 7% a CPC was higher as well. 17% conversion rate, just check, check out that number 30% Plus, and ao V was 15%. Higher. So it's it's fair to say that if you are on marketplaces, Amazon, you have to give a deal. I mean, it just no brainer, right without that. And I believe one of the companies I don't momentum commerce right moment. Yeah, I my good friend, John. So momentum commerce, they sort of came up with the research that where they seen about 36% discount as well being offered by I believe Kenwood was it, I think one of these companies, so deep discounting happened in marketplaces, essentially. So that was, I think one of the interesting observations.

Aaron Conant  24:15

No, I mean, that's it. I mean, there's a big do we give a discount or not? And it's clear.

Udayan Bose  24:21

I mean, it's just very, very clear. I mean, almost like a no brainer, Black Friday, again, beat the other days and average order value, but I really wanted to kind of point because we did a parallel comparison of, and that's, I think, one of those interesting insights is Iver fi right. When you compare the EO V on Amazon, for the same company, and from their direct to consumer side, their website. We saw that Amazon order size was anywhere between 26 to 34% lower compared to what the order size was directly direct to consumer or basically from the website. And that was an interesting trend. So we, again being very fanatically analytical dived in deeper. And we saw in many cases, the overall basket composition being very different. So the products being purchased on Amazon, in many cases, I will not say all the cases, but many cases had a very different composition compared to the products that you were purchasing actually direct to consumer side. So, that was a very interesting observation, again, sort of being fanatically analytical dive down even further. And then we tried to sort of plot them based on just a simple quadrant graph, right? What is the velocity are these fast moving products, and are these high margin products, if you really do a two by two matrix, on the velocity of sale, and the average margin per item, we saw that most of the companies are really focusing on slightly lower value items where the profit margins are lower, but velocity is high. So it would be basically on the third mark in the Star products, which is high velocity and high margin they're selling primarily are focusing on their from their website, the cash cows, which is high margin, but low velocity, again, big focuses on the website. Some of them do are selling that on Amazon as well, because hopefully, to get the the velocity in, but most definitely most of the at least again, our client data set, they were essentially selling more low margin and high velocity products from Amazon. We also tried to do a little bit of an association analysis around sorry, this is almost like keep on continuing all of this diving deeper, deeper, deeper.

Aaron Conant  26:34

No, that's all right.

Udayan Bose  26:35

So we found something interesting that a lot of the companies are using a lower priced item, to get folks to start building their shopping cart. It's almost like used as a doorway product to get the customers in. And then they're able to really sort of go ahead and upsell or sort of get the additional sales and items out there as well. The second is we also feel still, a lot of the research can be done on Amazon, it probably is being done on Amazon, which was then passed over to the direct to consumer to really do smarter marketing literacy for lack of a better word. So let me pause there. I know I sort of put in a lot of next step, next step, but happy to take any questions here.

Aaron Conant  27:20

Yeah, a couple says, and I think this really is in response to what you were just talking about, how are they doing that doing that any examples you can share?

Udayan Bose  27:29

Let us I mean, I launderable name the company of course. Right? So let us say in the in the beauty category. We saw that the average item price. So typically, this this client of ours, they have literally 1000s of products or SKUs. And if you really, again, really plot those SKU based on what is their SKU level margins. And how many units are you selling every month, right? Pretty straightforward drop in an Excel sheet, just put this out there. And then you really do the classification. And to segregate out the high margin and high velocity, right. So where you're doing still pretty much an average, and anything above the average in terms of margin and velocities are put in separate quadrant and then high margin, but not as much sales low velocity is in the second quadrant and so on. So if you do that, then you will get to the third quadrant, which in the classic BCG model is called the laggard quadrant, which essentially has low margin but high velocity. And effectively, they are really promoting that product first, by promoting when I say advertising, I'm talking about advertising per, and then they have an Amazon or basically, the entire brand store is there once they are there, they are able to really sell them higher value products. So that's how they're sort of getting people in by advertising on the cheaper items that are sold later. But high volume items, getting the customers in, and then they are able to really upsell them, the more more expensive products or items.

Aaron Conant  28:58

The next one, it comes in real quick. What's your opinion on level of discount? At what point does it make a difference? 15% 20%?

Udayan Bose  29:09

Actually, I mean, I, honestly speaking, I'm not qualified to answer that. It would depend on the category industry brand inventory levels, typically, so when is their financial year ending? So all of that stuff really sort of plays into a part. But the concern I had, I had a long conversation after cyber. So yesterday, or day before with a very, very large grocery chain. They are a $20 billion grocery chain. They are VP of merchandising and I were talking and we talked about as to these deep discounting. I mean, the inventory liquidation is one obviously understandable, but we saw some discounts being offered on new products and where the inventory I don't think was a problem at all. Now what is the impact going to be in the long term On the profit margins, right, because understandably, at that level of volume, this company is a is a public company. So effectively from that perspective, how will the q1 results really shape up I think is something which needs to be very clearly and carefully sort of monitored. The second part also is when you really get into that level of discounting, How sustainable is it? I think it's great to get market share and do the discounting in in a very strategic sense. But when discounting becomes the norm, then understandably, you're not talking about profitable and sustainable value proposition in the long run. So that would be I think my answer to we are really approaching this entire thing with a pinch of salt. And as expected, I think the discounts are really now all gone are mostly gone for our clients, effective yesterday. So we are getting into again, much higher prices again, and the demand understandably, has dropped also, quite substantially, since Cyber Monday, or Tuesday.

Aaron Conant  31:01

Awesome.

Udayan Bose  31:03

So moving on, this was more of an Amazon departing thing. I mean, there is a lot of stuff. I just simplify this. I mean, I wanted to make a point using this, if you really look at the fluctuation in that blue line, which is the conversion rates 1.41% 4.24%. Right, it's just a massive jump, the CPC 1.23 to 1.67 a fairly large, significant jump, right. So effectively, it really makes for a case that unless and until you really have the round the clock management and someone really being very vigilant and agile about all of this stuff, it would be impossible for you to maximize the opportunity available at each and every day part. And this is something which like we have a pretty robust and complex machine learning tool. But the fluctuations are so much, no, no, no AI can really be trained based on this. And that was the point at which still shows that it really makes sense to have a, a very vigilant operation, so that you are able to utilize those times. And the thing is and what really worked for us, I mean, we were able to aggregate it on of our client base URL, we were able to see a 31% increase in overall year on year online revenue. So I'm talking about big numbers in terms of growth. And one of the big strategies that we use was simple, right? How can we really maximize the opportunity available at each day apart and when that and that requires a tremendously fragile and vigilant operation to really get that thing. It's a massive process game. But I wanted to show this to make that just that point that the the numbers can fluctuate quite dramatically. This is on Amazon, essentially. So very quickly, as well, to wrap up with the Amazon specifically. And obviously prime early access sale event in mid October kick started the holiday shopping spree, over 1/3 of the prime shoppers may have actually completed their holiday shopping prior to cyber five. Now, let me share with you a probably again, what we are observing in our data set may not be exactly hold true. But we saw in many cases actually a dip in the number of competitors on cyber five. So we are comparing the previous week versus the week of cyber five. And very interestingly, we saw the previous five days had about eight to 10% more advertisers compared to the ones that were still around in cyber five, which was very interesting. Was it because of the the reporting inaccuracies, which I think we started seeing it from 4pm on Friday, till about Sunday evening? I don't know. But that may have dissuaded some of the advertisers and probably we have impacted overall ad spend for Amazon. I know again, it's a it's a big

Aaron Conant  33:43

I mean, everybody was scratching their head and what was going on?

Udayan Bose  33:46

Exactly. The some people said that I just too much stress,

Aaron Conant  33:49

there's going to have to be something sad from Amazon, because there's a lot of questions being asked right now. So yeah, I mean, I think that's a lot of it is like do you turn it on? Do you turn it off? Like if you don't have clean insights into, you know, your budget? What's been spent your inventory levels? You know, I don't know anyways, yeah. That might be another whole topic for the webinar. Exactly. What went wrong was Amazon's advertising and sacrifice?

Udayan Bose  34:15

Yeah, yeah. But I think the good part is Amazon is probably the fastest learner that exists today in the world. So they'll sort of come out of it very strong. I'm pretty sure. Google advertising trends. Google is an area as you know, and that's the area that we really specialize in. This was the most surprising part of all. That performance Max campaigns accounted for 48% of paid search orders during cyber five. This is simply unbelievable around performance Max 10 months ago, did not exist. So it is an entirely AI-driven module, which combines the top of the funnel shopping, display, discover and all that stuff. Right. So it shows how much focus Google is really placing on have artificially artificial intelligence and those modules which sort of run on our AI,

Aaron Conant  35:06

half half,

Udayan Bose  35:07

within 10 months of essentially being launched 50%, almost of all the orders, really, really sort of just going through performance Max is just absolutely incredible.

Aaron Conant  35:18

And is that a push just by Google to get people to run performance?

Udayan Bose  35:21

Yes, it is. Because I think the all the smart shopping, etc, being bundled in effectively into this really sort of led to this quite substantially, we have done the comparison as well. Not really an exactly apples to apples comparison. But we have tried to see 2021 shopping was just a part of performance back. So search plus shopping, while P max includes shopping plus display and video, etc. So how exactly did it pan out? So you can see the shift very clearly that Google is driving. So based on this, I'll make a just a purely a personal point of view, and a big, quote, unquote, maybe a very direct and blunt point of view, I think by next year, when we are doing this same event, I wouldn't be surprised if performance max or whatever the AI-driven module, order share goes up to as much as about 90%. Right. And just to think of it, so

Aaron Conant  36:17

anybody that's been putting it off, like anybody who's been putting, yeah, you know, off the instead of change, the player needs to be a key focus for next year.

Udayan Bose  36:28

And we have seen firsthand, so I speak in quite a few analyst events sort of meet with a lot of advertiser, people are really struggling with V max. Right. So I think my clear message out here is, you don't have an option at this point in time, but to embrace AI, the future of Google is entirely AI, right. So if you don't have the capabilities, or the technology, you'll not be able to compete your spirit. That's I think what it is right. And I'll make the statement again. So I was invited to this Google agency leadership circle event about a month that it was a group of the top 27 agency CEOs and Google flew in all of their top brass, essentially. So we're having a discussion with John, John Nicoletti is the head of products at Google product sales. And he mentioned that, then our goal is to get to 100% by 2025. Right, the entire thing will be AI. And with this percentage, it just very clearly validates the part as to how much focus Google is placing in terms of putting everything under AI, essentially. So I think that's a, that's a big shift and a chunk. So some of the other observations. We also saw very much like Amazon in Google about eight to 10% drop in the number of advertisers in scheduling categories, like apparel, the drop was pretty prominent, so fewer advertisers advertising, in apparel and gifting categories. So what we were able to observe is something pretty interesting that if if someone was really smart and data driven, and agile enough, it was a great opportunity to win those incremental impressions for less, we literally were able to, I don't think we have really ever been able to win so much impression share for solace. And that was primarily because a lot of the advertisers got really scared of all of these recession, gloom and doom, etc. And I anticipate the demand to be low. And they said that during this time, the competition is going to be too high, maybe the CPCs go up through the roof. And that is just sort of pause advertising. And again, start back, they may have missed probably the best opportunity that came by, by not really seen such an opportunity in the last three years, at least right to in an as inexpensive manner as possible to be an incremental Share of Voice or impression share, which also validates the fact that marketing is something that you really have to continue to do. The future of Google ads is AI-powered. I already have mentioned that. For our customer base, we saw an overall year on year increase in Google ad spend by about 29%. It was very strong. The revenue I already mentioned is about 31%. year on year online growth is what we were able to see. So a higher revenue for stronger ro S is a pretty attractive proposition in a competitive holiday season like this.

Aaron Conant  39:12

So question just came in. I started by just getting this one. I saw it coming in the q&a. Does Capital One shopping or Microsoft shopping tools impact the price or redirect the traffic a lot?

Udayan Bose  39:24

That's a great question, Paul. I would not know the answer. I think it's it's a great question, though. And I don't think I have enough data to really be able to provide an answer, but that's definitely a great question. Yeah, I don't know. Yeah.

Aaron Conant  39:40

And so what are you that comes in? Are you helping brands set up performance Max campaigns?

Udayan Bose  39:46

Yeah, we have.

Aaron Conant  39:47

So I think there's a lot of people are just like standing back saying if they don't have an agency, what do I do? Or maybe their agency is smaller and doesn't know how to or they've tried it? And, you know, garbage in, garbage out? All right, and yeah, so they're not performing. But you're clearly showing that they are performing the setup. Right?

Udayan Bose  40:06

They are performing exceptionally well, I think the overall Google data is I mean, we have become almost like a poster child for performance Max and part of this leadership cycle, I was asked to speak to other agency CEOs how to really run performance Max campaigns, it was a little embarrassing. But yeah, I mean, you need to have an AI technology which feeds in the high value audiences to performance Max, and there is a certain process, we really have been able to over the last 10 months, do enough experiments to build out a process which Dan's very successful performance Max campaigns. Yep. Moving on the outlook for the remainder of this holiday season. We, we still believe that we are and we are sticking to our 7% year on year growth, which we had come up with that forecast on 15 September. At that point in time, it was at best, despite having all the data etc. was at best and expected expectation. And we I must say were very pleasantly surprised to see a very strong November number 9% year on year online growth. Cyber five, as I mentioned, was 12%. Though we are seeing very clearly it has been just two days since Cyber Monday, not even two days. And we are seeing the overall demand drop quite substantially. The discounts also diminished quite substantially as well. We are projecting still a 5% year on year online growth. We believe that already by yesterday, Aaron about 62 to 65% of all the online shopping has happened for the entire season. So that's already done. So from that perspective, I think the 5% growth is the last minute shoppers etc, which will just keep that there. So definitely we are expecting a lower or a slower December in terms of online growth aggregated for both these months, it would sort of still be we stick pretty firm to our initial prediction made in September of 7%. year on year on nine growth. Yeah. Yeah. So this is what essentially we are, we are talking about. Just to summarize, these are my final final slide. We are very clearly pleasantly surprised, like many of the retailers and many businesses to have a stronger than expected cyber five. We also know and we are able to see the prime early access event succeed in kick starting the holiday shopping. Most retailers offered very heavy discounts during the Thanksgiving week. And as I mentioned earlier, the impact of deep discounting will be felt on the margins. And that's the reason we have seen a massive pullback in terms of discounts. One part which I wanted, this is just our opinion in NetElixir event. BNPL is exciting. It drove a substantial chunk of sales. And we saw some explosive increase during cyber five. Very specifically on Cyber Monday, I was amazed to see the impact which BNPL had in terms of increasing that incremental spending.The only question and a caveat is is it incentivizing people to spend beyond their means? We prefer to approach BNPL with caution. I have mentioned it in one of the earlier DWG webinars as well. It incentive is good, but I think just given the overall economy how to win everything. It's a little concerning for us at least to see some of the consumers at least spend definitely beyond their means. While a 9% year on year, online sales is great news that growth is likely to be slower. I've already mentioned that. And last part I really wanted to emphasize again is strong cyber five demand, along with an ability to win incremental impression share on Google Ads really validates the idea that you should not cut back on marketing during a slowdown. And that's what I had added I think in the presentation overall. And happy to take any other additional questions but I think thanks again for sharing the questions. I mean, this is the to live will not be able to play the video primarily because I think the sound connection is not there. But do check out this video when you get a chance. It's for our tool, the AI tool that we have called LXR insights. This I think is our so called the secret sauce that has really been able to make the performance Max work. So if anyone is interested in a demo, you can really use this URL NetElixir.com/try-LXRInsights sites. That's what I had. Thank you very much. Happy to answer any questions and wish everyone a very happy holiday season.

Aaron Conant  44:27

Yeah so great time if you have questions drop in the chat or drop them the q&a and we can get them we can get them answered. So top of mind for me like the key takeaways, right one is a need to discount discounting is back. Right It does make the impact. The other thing is this this performance Mac's campaigns. That was the other thing that was kind of, you know, taken aback that I think a lot of people have been sitting back on those and leveraging them and it's literally This is not a knock on people, marketers now have, you know, the digital marketer has 150 new things to do over the past year, year and a half, two years. And this was why I've got campaigns and they're in Google, and they're up and they're running. Now I gotta, I gotta go fix 15 Other things or find five new other, you know, service providers and try to get everything plugged in. And oh, by the way, the websites going down. Paid media is not up. Amazon's asking me for money. And every retailer out there for retail media has asked me and I gotta learn a new platform. But that should be a focus, without a doubt that has to rise up. You can't just say, Hey, we've got Google running at this point in time, I need to say this needs to move up on the stack of things I need to work on at the beginning of the year, right?

Udayan Bose  45:41

No, absolutely. Absolutely.

Aaron Conant  45:44

How hard is that for somebody to teach themselves? And how often do they have to, you know, go back to their agency

Udayan Bose  45:48

It's difficult, because I think like anything AI, it can sort of work either way, right? It can go up very quickly, it can go down, pull your campaign performance down very quickly as well. If you don't get the formula, right, it's almost like a, you're in a chemistry lab. And if you really have to get that percentages, right, right of those different liquids, you're sort of mixing and so on. Otherwise, I mean, that the entire lab will explode effectively, if you get the chemicals in the wrong proportion, that it's tricky. But it requires a lot of experimentation, and it can be done. And it very clearly shows that it is definitely working. And that's the direction which Google is taking as well. So one, one part I wanted to emphasize on a slightly different note is the impact of paid social. I know, Facebook has been basically getting flogged literally, for a lack of better word for the last one, one and a half years now, Aaron, but we were surprised to see that Facebook or slash meta, still referred a fairly high chunk of customers in this cyber five as well. So again, the question is paid social, I don't think I don't think it is fair for anyone to really by any means. Forget about paid social or write off paid social, it's very much their Facebook and meetup. It is just that I think they are, they are going to really sort of make a bit of a comeback. I don't know whether it will be the entirely same comeback. But we were very, very pleasantly surprised and happy to see that social media sales are referred by social media sales go up also during cyber five.

Aaron Conant  47:26

Yeah. Awesome. Well, I don't have any other questions that have come in. But I do want to say a quick thank you to everybody who sent in questions, we'll get gift cards out to people who one who day and thanks for being such a great friend partner. So in order the network, I mean, I'm going to send out an email connect everybody to you. But also I'd love to have a conversation with people that dialed in today. Again, we don't sell anything, it'd be WG. We're just a networking knowledge sharing group. But we'd love to have a conversation to hear what's going on in digital space more than happy to share across the board. What I'm hearing is the cutting-edge tools that are popping up out there. The stuff that's changing the digital landscape as a whole with that day, and thanks again for your time today. Thanks for being such a great friend and partner supporting the network. With that we're gonna wrap it up, everybody, take care, stay safe very much.

Udayan Bose  48:12

Thank you so much.