How The Holidays Affect Your Digital Campaigns
The last two months of the year are a wild ride for digital ad campaigns. During the holiday season, we have Black Friday, Cyber Monday, and holiday shopping one after another.
Running campaigns during this time can be crucial to reaching a market that’s ready to invest for the New Year or splurge on family and friends. But this season of spending also can make digital marketing a bit more challenging because it significantly increases digital campaign costs and changes user behavior.
How does the holiday season affect your business?
Prepare for changes to your digital advertising this holiday season! We’ll cover a few topics to help you tweak your digital marketing strategy for the end of the year:
Why do digital ad costs increase during the holidays?
How does user behavior change during the holidays?
What type of companies benefit from holiday advertising?
What can your business do to be prepared for the holiday season?
Why do digital ad costs increase during the holidays?
Q4 ends with two big events: Black Friday/Cyber Monday at the end of November and Christmas at the end of December. Both occasions can result in increased consumer sales for B2C businesses. Companies that benefit from holiday sales increase their digital advertising budget to reach more consumers. With this increasing demand for digital ads, the cost of placing digital ads also increases. Since digital advertising works as online auctions (see how digital advertising costs work), the higher the demand over a limited supply of ad space, the higher the price of an ad.
Costs usually start increasing at the beginning of November. You’ve probably seen big brands promoting their Black Friday deals as soon as the day after Halloween. The increase is usually gradual, but you can expect to see over a 100% increase in digital advertising costs by the end of November.
How does user behavior change during the holidays?
While the cost of digital ads is higher during this season, so is buyer activity. User behavior changes drastically, with an emphasis on discount-seeking starting in November. In addition to wanting to buy more items, users also want to buy at reduced prices. Everyone is looking for offers, sales, and discounts—especially on items they’ve been waiting to buy. As December approaches, buying behavior focuses on Christmas gifts and other holiday-related purchases.
The holidays put people in a unique state of mind. Celebrations, family reunions, gift-giving, and the close of another year shift people’s priorities. While buying for certain categories will skyrocket, other products and services won’t be considered until the New Year, often due to increased spending in other areas.
What type of companies benefit from holiday advertising?
Some companies see this time of year as a curse and others as a blessing. Where your business fits should impact your Q4 ad strategy and budget.
Companies that benefit from the holidays
B2C e-commerce companies usually benefit from the holiday season, especially those that sell products and services that are in high demand during this time. If an e-commerce business can maintain a profit while giving a big discount, they’re sure to rake in some sales from online discount shoppers.
If this sounds like your business, increase your ad spend for a healthy return on investment. Some direct-to-consumer companies depend heavily on their end-of-year sales, making this a huge event accompanied by a large digital ad spend.
Companies that don’t benefit from the holidays
There are roughly two kind of companies that don’t benefit from this holidays:
B2C companies with more complex products and services. With a more involved decision-making process or a higher price tag, some consumers will put these purchases off until their bank accounts recover from the holiday season. For businesses with low margins, offering big discounts isn’t viable, which makes it likely that consumers will hold off on buying from them.
B2B companies. Businesses that don’t directly sell to consumers rarely see a benefit in this season. Decision-makers in businesses might be taking time off, preparing for a new fiscal year, or focusing on implementing their own advertising strategy.
What can your business do to be prepared for the holiday season?
If your business is unlikely to see a direct benefit from the holidays, here are some tips on how to be prepared.
Find a way to get into the holiday spirit
Not every product or service is the perfect Christmas/Kwanzaa/Hanukkah gift. However, there’s often an indirect way to tie the holiday season into your marketing. Offer a discount or include holiday elements in your copy and graphics. Doing so will help you capitalize on the seasonal state of mind that shoppers are in when they’re browsing online.
Be aware of the cost increase
Many businesses keep their campaigns running without much change. Being aware of cost increases and less effective results helps you tweak your strategy. If two months of low-performing digital ads won’t bother you, don’t change the strategy that works in other months of the year.
Shift your budget
If you are not getting the same ROI as the rest of the year, you can invest your ad spend differently. Although stopping your campaign is not recommended, scaling down your ad spend budget can be helpful—especially because you can reinvest that capital in Q1. When shifting your budget, consider improving other marketing materials, or start Q1 with an additional boost.
Looking to adapt your ad strategy for the holidays?
Adjusting your budget and trying new digital ad strategies is essential for effective ads during this time. For an adaptive digital ad strategy complete with high-quality executions, look no further than Liquid Creative! We use our marketing experience to give you the best recommendations for your business’s digital ads. Contact us today to learn more!