Many Americans received stimulus checks over the last few days as a result of President Biden signing the American Rescue Plan bill on March 11. The move provides direct payments to millions of Americans who are below specified income thresholds, with the largest payment for a single adult coming in at $1,400.
Much like we at Tinuiti observed following the introduction of stimulus checks in April 2020, this latest round of checks appears to have boosted consumer demand, with many shoppers heading online to make purchases with the additional funds. This led to a surge in performance metrics for many brands’ marketing efforts, particularly in paid search.
Google Paid Search Conversion Rate Soared Week over Week
Taking a look at Tinuiti retail advertisers in Google paid search, the conversion rate of ads (the share of ad clicks that led to a conversion) rose at least 25% week over week for both March 16 and 17. Many Americans didn’t receive funds into their accounts until March 17, including those banking at Wells Fargo and JPMorgan Chase.
This surge in the likelihood for searchers to convert after clicking ads, along with a 10% to 15% increase in ad clicks week over week as search volume rose, drove up total conversions attributed to search ads more than 40% week over week on both March 16 and 17.
While the extent of this increase in conversions was very different from advertiser to advertiser, those operating in the apparel, toys and games, and health and wellness categories accounted for some of the biggest gains week over week.
Takeaway for Marketers
Cash infusions this large don’t typically come around often for American consumers, but with the pandemic significantly affecting businesses and family finances over the last year, there have now been three different direct stimulus checks in the last twelve months. While marketers didn’t notice as much of a boost in December surrounding checks that were maxed out at $600 per single adult, the April 2020 and March 2021 checks meaningfully drove up consumer demand.
The current surge in demand will likely linger through the weekend, but wane at a point once consumers have spent their newfound riches. Other seasonal shifts and events such as tax refunds hitting checking accounts can also impact performance around this time.
While it seems unlikely that another stimulus package will be passed anytime soon, the events of 2020 have shown that even the most reasonable expectations can quickly get thrown out of the window. Marketers, in turn, should remain prepared to meet consumers whenever and wherever demand is spurred on by economic relief efforts.