This year has been particularly challenging for digital marketers and business owners who depend on reaching consumers online. More specifically, the competition we have seen in ad auctions on Facebook and the GDN has been momentous. There are a number of explanations for this.
First, was the unprecedented levels of media spend on political campaigning during the 2016 US Presidential election cycle, which wreaked havoc on commercial brands and digital marketers. Then came the Olympic Games where, similar to political campaigning, big brands targeted wide with sizable budgets. And to top off the year, we’ll be competing with mega retailers from now until Christmas, who will also be targeting wide with massive media budgets.
In the efforts to help our clients and readership protect their accounts through the rest of this tough year, we decided to take a moment to help you better understand exactly how the holiday season can adversely affect your accounts (depending on your business). But not to worry, we’ll also divulge how we plan to get you through the year unscathed—and better yet, how to jump start the new year!
Santa’s Impact on Digital and Social Media Advertisers
Getting your ad shown on Facebook or the GDN is determined by your performance in the ad auction—which is highly competitive as is. Advertisers that have the highest Ad Rank—which takes into account your relevance/quality score and your bid—win.
Your bid is easy in the sense that it only requires having a budget. Your relevance score, on the other hand, is all about showing ads to the right people and at the right time. If people are not into your ad, it doesn’t matter how big your budget is, you’ll lose because you need both of these elements in order to win an ad auction.
Right before Black Friday, retailers start pushing more ads, causing prices to rise. Retailers tend to have hefty media budgets, so we can’t really afford to bid as aggressively. In addition, people are in a certain state of mind during the holiday season—gift shopping frenzy.
For some of our clients in niches such as health, real estate, games, SMB, and etcetera, holidays like Christmas are particularly challenging.
Take for example the health industry. The holiday state of mind typically steers people away from health products. Quite simply, people are just not interested in losing weight during the holidays. Therefore, retailers have the advantages of both sides of an ad auction—the mega budget and the user interest. This makes conversion rates drop and reach limited for these businesses.
The graph above was taken from a Google trends report. We simply searched “diet” trends in the “United States.” Notice how every single year there is a drop that starts in November and further plummets through December.
Notice, however, that this significantly changes with the new year. By the beginning of January, you can see a huge spike. This is because New Year’s resolutions tend to be more honed in to self-improvements such as health.
Understanding the timing of these plummets and peeks are crucial in planning your media strategy for the year.
How We Plan to Carry You Through the Rest of the Year
In order to counter this difficult period, you need to revise your media strategy and be prepared to pivot.
First off, you need to be able to anticipate events that shake up ad auctions before they happen. Not only do we have a team of professionals with extensive experience in this but we also have the Q System—our propriety technology that helps us anticipate changes by analyzing external data points.
Once the effects become obvious, it’s time to trim campaigns so you don’t lose your relevance score or lose big money by targeting people who won’t be interested. Scale will be lost but if you can stay profitable with minimal spend, it will be easier to get the ground running when the season picks up again.
This defensive approach is far better than simply shutting down campaigns and restarting at the beginning of the year because stopping and starting campaigns tampers with the algorithms that determine who sees your ads.
We recommend using this difficult time to focus on your current user base. For example, retargeting, posting on Facebook, sending emails, or even sending snail mail.
Directly following Christmas is the moment to jump back in—full force. Start building a vast number of campaigns and collect stats to pave the way for January and February.
We hope you found this article helpful. If you have any questions or need some extra advice, feel free to contact us!
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