Temu and Shein's aggressive keyword bidding drives up search ad costs, impacting retailers this Black Friday. Rising "cost per click" pushes businesses to rethink strategies, shifting focus to social media, influencers, and high-value customer engagement.
Heavy online marketing investments by Temu and Shein are increasing costs for other retailers to reach shoppers during Black Friday, according to industry experts. Both platforms are aggressively bidding on search keywords, including those tied to competitors, to capture attention during the unofficial start of the holiday shopping season.
Retailers vie for prime placement in search results by bidding on keywords, but higher demand inflates the "cost per click," the fee charged per ad click.
Data from Semrush shows Temu bidding on terms like "Walmart Black Friday deals" and "Kohls Black Friday," while Shein targets phrases such as "Zara jeans" and "Mango dresses." As a result, the cost per click for terms like "Walmart clothes" has surged 16-fold between August 2022 and August 2024. Generic terms like "cheap clothes online" have also seen steep increases.
Ecommerce consultant Erik Lautier warns that rising costs reduce marketing returns and, in some cases, can render paid search ads unprofitable. These ads often drive 15-30% of online sales and can consume up to half of marketing budgets.
Shein and Temu stand out for bidding on a broader array of competitor keywords than is typical, said Olga Andrienko, Semrush's VP of brand marketing, describing their approach as "more aggressive."
A Temu spokesperson stated the company is committed to fair advertising practices and employs a "negative keyword list" to avoid targeting brand names, although automated processes may occasionally result in inadvertent targeting. Shein did not respond to inquiries.
The rising costs are prompting businesses to shift focus to channels like social media, influencers, and traditional ads. Erin Brookes of Alvarez & Marsal notes some brands are moving away from cost-driven customers and prioritising those with higher margins and loyalty.
British retailer Asos, for example, recently launched a loyalty programme and is investing in emotional engagement through cinema ads and influencer partnerships, according to its Chief Customer Officer, Dan Elton.
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