The stat-backed holiday advertising tips to know for 2016
As the online holiday shopping season begins, columnist Andrew Waber analyzes e-commerce Facebook advertising trends to help you map out your own campaign strategies.
For e-commerce marketers looking to capitalize on the largest shopping season of the year, online advertising becomes a game of inches. While the underlying motivations of shoppers are important during the holiday season, so are the on-the-ground behavioral trends.
This is something I helped study as part of Nanigans’ latest holiday e-commerce advertising report (email registration required), where we examined a full year’s worth of Facebook advertising activity across our wide range of e-commerce-focused clients, noting average differences in same-advertiser November and December metrics from pre-holiday levels.
From that analysis came a number of noteworthy insights you should take to heart as the holiday online shopping season gets underway:
1. Consumers tend to spend more on each purchase during the holidays
Across all e-commerce advertisers studied, the average change in average order value (AOV) between holiday and non-holiday time periods was +17 percent.
This emphasizes why driving holiday season purchases is so important — every purchaser you are able to attract via an online ad during these months is likely to spend substantially more than your typical “non-holiday” customer. This is on top of an understandable increase in monthly purchase volume.
2. Don’t neglect early weekdays to capitalize on increased purchase activity
While the share of total weekly purchases made on Mondays, Tuesdays and Wednesdays during the holidays rose, purchase share for all other days declined. The greatest change occurred on holiday Tuesdays, which captured a 15-percent higher share of purchases than they did during the rest of 2015.
To take advantage of these changes, you should strongly consider testing budget allocations weighted to the earlier part of the week. It also may be worthwhile to incentivize shoppers who are primed to purchase on these days with limited-time offers.
3. Ad prices increase, but not to the detriment of profits
No surprise here — with a highly competitive advertiser ecosystem looking to reach valuable holiday shoppers on Facebook, costs generally increase for online retailers. And 2015 was no exception.
Compared to costs during the rest of the year, average 2015 holiday CPMs (cost per thousand) increased 39 percent on mobile and 180 percent on desktop.
But looking at the larger picture, the price increases didn’t mean advertisers were losing out on profitability. Thanks in part to those larger AOVs mentioned earlier, last holiday season, e-commerce advertisers using Nanigans achieved substantial growth in return on ad spend (ROAS), which increased by an average of 113 percent for online retailers advertising using Nanigans.
In short, don’t be scared off by price increases during the holidays. With proper targeting and campaign management, increased returns should make your efforts well worth the investment.
4. CTRs swing wildly – don’t chase them
Regardless of the device they’re using, customers tend to click on e-commerce ads more during the holidays than throughout the rest of the year. Among Nanigans e-commerce advertisers, mobile click-through rates (CTRs) increased 11 percent versus the rest of the year, while desktop CTRs exploded, with 104 percent growth over the non-holiday average.
While the increase in desktop CTRs was more dramatic, many shoppers may be browsing on their smartphones, only to later complete the purchase from an ad seen on their laptops or desktops.
To this end, it’s worth creating back-end systems to map and track unique user IDs outside of the holiday season, and using a partner or your own systems to illuminate how your repeat and new customers typically research and buy. You can then use these insights to weight your advertising efforts as the mix of new and repeat customers changes.
5. Your competitors are investing more in mobile, not desktop
Throughout 2015, desktop ads accounted for the majority of ad spend by Nanigans’ e-commerce customers. However, mobile commerce rapidly accelerated last year, and growth was especially significant during the holiday season.
E-commerce advertisers increased the share of Facebook ad spend targeted to mobile devices by an average of 37 percent during the 2015 holidays compared to the first 10 months of the year. Conversely, the share of ad spend targeting Facebook users on desktop devices dropped by an average of 19 percent over the same time frame.
All the points above emphasize how a profit-driven, rather than a cost-driven, approach to advertising is paramount during the holiday season. What defines your most profitable repeat and new customers, and what have been the most effective ways to reach and re-engage them?
By understanding the answers to those questions, the tips above and in the full report can act as useful guideposts as you map out your holiday campaign strategies. If you’re looking for a bit more information on tactical considerations, check out these quick guides to Lookalike or Website Custom Audience targeting, or this list of more advanced considerations.
Happy holidays! Seems like they get earlier every year.