Online Sales per User Continues to Rise
Consumers in both the United States and Canada are on track to spend record in online purchases in 2012. According to a report by GroupM, online sales per user is expected to push beyond $1,000 in both countries. The projections are $1,042 per average US user and $1009 per average Canadian user. Both numbers represent about a 10% increase from 2011.
The GroupM study also took a close look at how much money is expected to be spent advertising online per internet user both countries. The study predicts that advertisers will spend $174 per user to target US consumers, a 7.4% increase from 2011, while $114 per user is expected to target Canadian consumers, representing a 4.6% increase.
But what is most interesting to me is how online ad spending per user compares to that of total media spending per user in both countries. This is an indication of both the health of e-commerce in general. It is also a strong indicator of advertiser confidence online compared to more traditional media. With that said, US online media ad spending is expected to account for only 26.9% of total media ad spending per user in 2012. However, this is expected to increase to 35% by 2015.
The connection between online advertising per user and online sales is obvious, but what we are seeing here as well is a growing confidence of advertisers in the correlation between online advertising and offline purchases. The internet is becoming more than ever a medium for driving brand awareness as much as it is a medium for driving direct response to purchase. But this has as much to do with ever improving tracking mechanism that allow advertisers to correlate more and more accurately the effect online advertising has on offline, bricks and mortar sales.