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Investing in PPC, increasing LTV and mobile conversion - which brings together fast-growing companies

OWOX conducted an independent digital marketing market research based on real transaction data from 7,000 projects. The main question we posed before the study is to understand what allows some successful companies to grow faster than others. A full study report can be found on the OWOX blog.

The main conclusion: in order to grow faster than competitors, you need to rely on elastic scalable channels. The most effective middle ones are paid. For medium and small businesses, this is contextual advertising and advertising on social networks. For large companies - campaigns to increase brand awareness (display advertising, integration with opinion leaders and other PR activities) and paid traffic from social networks.

Companies that participated in the study:

We took real data from 7000 eCommerce projects from the United States and compared them for the periods January 2018 - October 2018 and January 2019 - October 2019 ... Data for November-December were not taken into account for bursts of seasonality.

The growth rate for the US market was calculated as the ratio of the total number of visits in the period from January to October 2019 to the total number of visits in the period from January to October 2018. So we divided the companies into fast-growing and slow-growing.

The size of the companies we determined by the amount of traffic:

  • Small business (<300,000 sessions per month)
  • Medium-sized business (from 300,000 to 1,000,000 sessions per month)
  • Large business (> 1,000,000 sessions per month)

Insight 1. Big business is harder to maintain growth


The growth of eCommerce business has contributed to the increase in the number of Internet users. More than half of the companies under consideration in the segments of small, medium and large businesses showed growth in 2019:


Chart 1. Percentage of companies depending on the size of the business that showed growth in 2019

On average in 2019, the companies in question grew by 20-30%:


Chart 2 Average growth and median growth among companies that grew in 2019.

As can be seen in Charts 1 and 2, it is more difficult for large companies to maintain the same growth rate as for small and medium-sized companies. As it develops, it becomes more difficult for large businesses to find new growth points, while for small and medium-sized enterprises there is room to move.

Insight 2. For fast growth, you need a PPC channel


The study shows that large and small companies provide their growth through contextual advertising. Chart 3 below shows that small companies that have focused on contextual advertising and social media advertising are growing faster than those with SEO focus. The fast-growing share of Paid Search is 3-4 percentage points higher, and Organic Search is 4-5 percentage points lower.


Chart 3. Traffic distribution by channel groups in 2019 in the small business segment

Returning to the point on growth rate. Typically, large companies have quite developed marketing channels and traffic is growing at a certain rate. To achieve rapid growth, you need PPC channels, in which the more you invest, the more profit you get (until you reach the “saturation point”).


Chart 4. Traffic distribution by channel groups in 2019 in the segment of large business

Insight 3. Big business needs to invest in brand awareness for growth


Additional marketing channels, thanks to which large business ensures its growth, are offline and display advertising, as evidenced by the growth in the share of the Direct channel by 1.7 percentage points.


Chart 5. Changes in traffic structure by channel groups in 2019

Insight 4. The probability of a purchase from a returning user is 1.5-2 times higher than that of a new


In the course of our study, we found that the probability of selling to an existing user is on average 66% higher.


Chart 6. Conversion rate for new and returning users in 2019

For small companies, the percentage of such conversion is lower, but the analysis showed that this is most often due to the presence of loyalty programs and a wide range of products from large online stores that encourage customers to return and make purchases.

Insight 5. Half of the orders are made from mobile devices


Mobile traffic is currently an important catalyst for growth. In 2019, half of the orders in the segments of small and medium-sized businesses were issued from mobile devices. For large businesses, the share of sales was 58.1%.


Chart 7. Share of orders from mobile devices for different business segments

If traffic growth and conversion rates in the segment of mobile devices in 2020 remain at the level of 2019, we should expect an increase in the number of orders from mobile devices by 15-20%.

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