COVID-19 Google Ads Impact Report - April 2020

We're now over 2 months into actively monitoring the impact that the COVID-19 pandemic is having on Google Ads performance and user search trends in the HVAC, Home Performance, and Solar industries. We are actively monitoring and analysizng patterns across KPIs such as impressions, clicks and conversions and forming hypothesis and conclusions as to how the crisis is impacting consumer demand and conversion behavior in the better building and clean energy sectors. 

Here is a detailed analysis of the PPC data we’ve been tracking as it relates to the potential impact of the COVID-19 health crisis:

GOOGLE ADS PERFORMANCE SUMMARY

  • There were clear signs of decreased competition for target keywords in April with declining CPCs across the board - both year over year (YOY) and month over month (MOM).

  • Campaigns for companies who “leaned in” and took advantage of less expensive CPCs (ie: dialed up click spend budget or maintained a steady spend even in the face of declining impressions) thrived in many cases - earning significantly more impressions, clicks, and conversions MOM as competition backed off.

  • Demand / search volume for home services in general was definitely down in April, but Click-Through Rates and Conversion Rates were both up. This indicates that fewer people were searching, but among those searchers, more of them were clicking on ads and reaching out to contractors than they were in March, indicating a more motivated pool of consumers (and probably longer attention spans among a vastly home-bound audience).

  • HVAC - All KPIs (including CPCs, impressions, CTR, and conversions) are following the same trends (both up and down) as we saw from March to April last year, indicating that performance in the last 30 days has been less impacted by COVID-19-specific changes to consumer search behavior than it has been by typical seasonal factors.

  • Home Performance - Impressions (search volume) were up dramatically MOM. As predicted, searches for air purifiers, UV light filtration, IAQ testing, and also mold related tests and services saw the largest gains over March. Conversions were also up. COVID-19 and the related “stay at home” regulations have clearly had an impact on how people view the health and safety of their home environment.

  • Solar - MOM impressions, clicks, and conversions are all down (as was ad spend for EC’s Solar PPC campaigns), but Click-Through Rates and Conversion Rates were both up significantly. Again, indicating fewer people searching, but those who are searching are more motivated.

PAID SEARCH 

*All active paid search campaigns (no display or video) - which maintained a consistent level of click spend and campaign activity for the past 60 days 

April 2020 vs. April 2019 - YOY

  • Impressions down 20.4%

  • Click-Through Rate up 28%

  • Clicks (volume) up 1.9%

  • Avg. Cost Per Click down 13.4%

  • Conversions down 25.7%

  • Conversion Rate up 61.5%

Last 30 days (versus previous 30 days) - MOM

  • Impressions down 22% (note a similar reduction in ad spend - down 28%)

  • CTR up 3.9%

  • Clicks down 19.4%

  • Avg. CPC down 11.4%

  • Conversions down 18%

  • Conversion Rate up 96.4%

Analysis

  • Impressions and conversions are both down compared to the same time last year - and are trending downward month over month This indicates less search volume / demand for HVAC, Home Performance, and/or Solar home services, as well as fewer people ready to commit to taking the next step toward starting a project or booking an appointment. 

  • CTR and CVR are both up compared to last year, indicating that while immediate demand is slightly decreased - those who are still searching for related services are more motivated (clicking through and converting at a higher rate than they were last year).

  • Avg. CPC is down both MOM and YOY - which indicates decreased competition, so even while fewer people are searching, those who are searching are more likely to click through and convert, so right now there is increasing opportunity to earn conversions at a lower cost per acquisition.

COVID-19 Impact - Hypothesis / Conclusions

Financial uncertainty and safety concerns related to having service providers working in and around the home are impacting consumer willingness to start home improvement projects, or even proceed with smaller upgrades or normally scheduled maintenance - leading to a decrease in impressions and conversions. 

Additionally, while the lower average Cost Per Click does indicate a decrease in competition for core keywords, we are not seeing proportional gains in impression share dominance, which tells us that competitors are spending less on PPC but not stopping it all together. This should be looked at as an opportunity to maintain momentum and visibility by continuing a consistent level of PPC advertising during this time - even with decrease in demand and loosening of competition. 

Because we're seeing fewer impressions, it may not be necessary to ramp up spend dramatically, since at the moment, the opportunity in terms of search volume is likely not there. However, since we're seeing cheaper avg. CPC for popular keywords, and relatively steady CTR and rising Conversion Rates, now is the time to stay the course and take advantage of low CPCs and a more motivated (albeit smaller) pool of searchers.



HVAC

Summary

  • Impressions are up 18% MOM (which is consistent with the same seasonal uptick we saw from March to April last year)

  • Click-Through Rate is down MOM by about 6% (which is also consistent with the same seasonal downturn we saw from March to April 2019)

  • Conversions and Conversion Rate are both down MOM (11% and 18% respectively) - YOY conversions are down by even more, but Conversion Rate is dramatically improved

  • YOY (April 2020 versus April 2019) - Impressions, CTR, Clicks, and Conversion Rate are all up - some dramatically so (CVR is up almost 100% and clicks are up by 22%)

  • Keywords with the biggest increase in impression volume MOM = “AC” and multiple variations of terms relating to “water heaters”, “heat pumps” and “heating and air conditioning” 

  • Average CPC is down 7.5% YOY, and down 12.3% MOM. From March to April last year, average CPCs also declined by about 10%.

Analysis - HVAC Industry

All KPIs are following the same trends (both up and down) as we saw from March to April last year, indicating that performance in the last 30 days has been less impacted by COVID-19-specific changes to consumer search behavior than it has by typical seasonal factors.

Impressions and clicks are up, demonstrating increasing interest (search volume) in HVAC services - with some of the biggest increases around searches for “ac” as well as “heating and air conditioning” terms. This is likely attributed to the rising temps in many southern and western areas, triggering more seasonal demand for cooling services. Clicks and CTR stayed steady or declined slightly for the same terms - an expected side effect of higher impressions - and also probably due in larger part to seasonal factors, instead of COVID-19.

Declining average CPCs are also a typical seasonal pattern for this time of year, as demand / click volume picks up, but it has fallen more than usual MOM and YOY, which could mean that in addition to the expected higher click volume there is likely also a decrease in competition contributing to the lower CPCs. 



HOME PERFORMANCE / HEALTHY HOME

Summary

  • Impressions are up MOM by 47%, and up 99% YOY. During this same time frame last year (March to April 2019), impressions only rose by about 20%.

  • Clicks are up slightly by about 5% MOM, and 51% YOY. During this same time frame last year, clicks rose by only 9%. 

  • Cost Per Click decreased from March to April 2020 by 21% which is a larger decrease than typical CPC trends we see this time of year in the Home Performance sector.

  • Conversions are up MOM this year by 6%, and YOY they rose by more than 14%. Conversion Rate also rose YOY, but from March to April this year, it fell by about 14%. 

  • Click-Through Rate was down for Home Performance campaigns MOM this year by about 28%, but this is logical considering the dramatic increase in impression volume we saw from March to April. 

  • During this same period last year (March to April 2019) CTR also decreased but by a smaller amount - which again, makes sense considering that impressions rose by only about 20% during this period in 2019.

  • Expectedly, searches for air purification, IAQ, UV light filters, and home air tests saw some of the biggest increases in search volume and clicks - as did searches for air sealing, whole house fans, and mold related tests and services.

Analysis - Home Performance Industry

As many people are closing out their second month of “staying at home” due to COVID-19 regulations, there is a dramatic increase in awareness around home-related issues and how they impact one's health. It is not surprising to see an uptick in search volume around IAQ related services and solutions, and the specific interest around air purification and UV light filters follows trends we’ve already seen in organic search behavior, as these were some of the most relevant break-out terms toward the end of March and leading into April.

The declining Click-Through Rates on HP paid search ads over the last 30 days, as compared to the previous 30 days, is most likely just due to the dramatic spike in impressions, and less likely due to a decline in consumer demand. This is supported by the rising number of conversions, despite falling CTRs. In short, demand for HP services is strong and climbing, and considering the break-out keywords earning the most impressions, it’s reasonable to assume that consumers are searching for Healthy Home services because of the increased awareness around human health, air quality, sanitation, and ventilation. 

Among Energy Circle clients specifically, those who “leaned into” the trend by increasing ad spend and taking advantage of cheaper CPCs saw extremely positive results. One case of a home performance company in the Mid-Atlantic who increased their ad spend by 150% from March to April (and by more than 450% YOY) saw a 99% increase in impressions, a 185% increase in clicks, and a 200% increase in conversions for HP specific keywords, MOM.

Declining average Cost Per Click does indicate at least some decline in competition for target keywords. However, it is not uncommon to see a decline in avg. CPC for HP campaigns this time of year, so while it may be due to a decrease in competition, that decrease is not just because of COVID-19, but is at least partially seasonal as well.



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