Furniture Advertisers May See Boost If Wayfair Decreases Paid Search Ad Spend
Wayfair’s recent announcement that it may cut back on advertising in an effort to control costs could be a boon to other furniture advertisers, according to analysis by Kantar.
Kantar data shows Wayfair is the preeminent player in paid search advertising on furniture keywords by a substantial margin. From January 1 through February 29, Kantar found that Wayfair captured 38.9% of all product listing ad clicks and a full 40% of all text ad clicks on 54 of the most popular furniture keywords, including ‘bedroom sets’, ‘dining room sets’, ‘dining chairs’, ‘bedroom furniture’ and ‘coffee table’.
For comparison, Wayfair’s nearest competitors during the period were actually quite distant. Within product listing ads, Kantar found that Ashley Furniture generated a 12.4% PLA click share on the furniture keyword group and The Home Depot had a 6.8% PLA click share. Within text ads, The Home Depot had a 10.5% click share, just ahead of Wayfair sister company Joss & Main at 10.0%.
Were Wayfair to substantially pull back on its paid search efforts, say by 25-50%, it would mean a significant opportunity to gain consumer clicks and market share for other furniture advertisers competing for limited space in the paid search auction, as 10-20% of all clicks on popular furniture keywords would be up for grabs. A less drastic but still significant reduction of 10-20% in paid search by Wayfair could still represent meaningful opportunities for shrewd competitors staying on top of the situation.
Further, were Wayfair sister companies Joss & Main, Birch Lane and AllModern to also reduce their paid search advertising spending, it could mean additional opportunities for competitors to gain share, as the three companies collectively accounted for more than 7% of product listing ad clicks and 16% of text ad clicks during the first two months of the year.
In addition to paid search advertising, Kantar data shows Wayfair actively advertised in a variety of media throughout 2019 and early 2020, including cable, network, Spanish language and spot television, other digital channels such as display, and magazines.
Wayfair was among the top furniture retailers advertising on TV during the period, spending an estimated $137 million on commercials, behind only Ashley Furniture ($182 million) and Rooms To Go ($145 million). Although television and other ad media are not as transaction-oriented as paid search, a reduction in spending would likely make Wayfair less visible and ‘top of mind’ with consumers, presenting other furniture advertisers with a chance to increase awareness—and customers—for their own brands.