Facebook Holiday Advertising: How To Win When Ad Costs Rise 25%

Facebook Holiday Advertising: How To Win When Ad Costs Rise 25%

  • by Rafaela Baquero | November 20, 2018
  • Facebook Advertising
  • No Comments (0)

As seen on MarTech Advisor.

Late Q4 is unlike any other advertising environment of the year. Facebook ad costs typically spike by 25% or more. The competition for inventory is fierce. But it’s also the biggest shopping season of the year. Ecommerce advertisers are managing their boom time, while other advertisers, like user acquisition and lead gen marketers, are hoping to close the year strong.

Facebook advertising gets particularly ferocious. But while Facebook ads might get more expensive during late Q4, Mark Zuckerberg’s platform is still the best game in town. A 2018 holiday marketing study from Shopify Plus  e-commerce marketers say Facebook ads are the most effective channel for new
customer acquisition.

Of course, everybody knows ads get more expensive around Christmas. Anybody who’s looked at a Facebook ads dashboard during the holidays has had to swallow a lump of coal when they looked at cost per click.

Most marketers are already aware of the problem. Keenly aware of the problem: 80% of them say “rising ad spend” is a concern for holiday marketing.

Despite the expense and the competition, Q4 is a massive opportunity. For retailers, it’s an opportunity to maximize the best buying season of the year. And for user acquisition managers and lead gen marketers, the holidays precede the most cost-efficient advertising season of the year.

To help you navigate the season, here are five Facebook advertising best practices for late Q4 advertising:

1. Manage the Strategy Shifts of the Ad Spend Wave

Done right, the ramp up to holiday advertising can be as important as the holidays themselves. Advertisers can leverage retargeting, email lists and other more cost-effective channels after December 8th – if they’ve scaled up their campaigns properly before that.

But don’t underestimate the after-shopping Christmas boom, either. Everybody likes to splurge with their Christmas money, to buy themselves what Santa forgot to bring. That’s why the period after December 26th can be especially effective if advertisers test out new device ads, video (more on that in a moment), and new messaging/creative.

2. Increase Average Order Size

If user acquisition costs rise, you have two choices for preserving profits: cut your overhead/product costs, or raise average order size. Fortunately, increasing average order size complements what’s going on in Q4 nicely – people are spending more, both on themselves and others.

There are plenty of ways to increase average order size:

  • Bundling products
  • Offering extra features for a discount
  • $-off discounts (“spend $X, get $ off” offers)

You may also want to just skip this average order size strategy entirely, too. Depending on your company and your situation, it could make sense to just go with a loss leader in Q4 and use it to build your customer base.

If you manage the loss-leader strategy well, you could break even (or make a very slim profit), but you’ll add a ton of people to your buyers’ list. Pair that with effective retention marketing, and Christmas could be a good opportunity to just bring in as many new customers as you can.

3. Wait It Out

Of course, not everybody is in e-commerce. If you do app marketing or lead generation, the holidays present a very different problem.

For non-ecommerce Facebook advertisers, the best time to scale spend during the fourth quarter is between October 1st and December 7th. CPMs will increase during that time, but not too much. We typically see them rise about 10-15% from Black Friday through December 7th.

The real increases kick in from December 8th to December 25th. That’s when CPMs rise from 30-40%. If you can, it’s not a bad time to just sit things out, or to scale back your ad spend and focus only on your most profitable campaigns.

Fortunately, the expensive days do pass. Almost like magic, on December 26th, costs drop. Most of the ecommerce marketers have spent their budgets, sold their inventory, and consider the year done.

This is when non-ecommerce marketers – like app marketers, user acquisition managers, and lead generation marketers – have their heyday. They will enjoy some of the most efficient CPMs of the year from December 26th through to the end of February.

So, if you’re going to spend money in the fourth quarter – and you’re not an ecommerce company – try to frontload spend as much as possible in October and November.

And if you have to spend money in December, spend it before December 7th. Then pull back as much as possible from December 8th through the 25th. Pick it back up on December 26th and let it rip through the end of February.

4. Focus on Mobile

Everybody knows mobile traffic now exceeds desktop traffic. But many marketers still believe “mobile traffic doesn’t convert”, or at least that it doesn’t convert as well as desktop traffic.

That might no longer be true.

A 2018 study of Google Shopping ads found that there’s been a dramatic increase in mobile conversion rates since just last year. The conversion rates for shoppers who begin and end their buyer’s journeys on mobile devices has increased by 252%.

This might be even more interesting: “The path of shoppers starting their search on desktop and completing their purchase on mobile rose 259% year over year.” Some people are actually choosing to check out via mobile rather than on a desktop.

Of course, that’s Google Shopping, not Facebook ads. But Facebook has done its own research, and also found mobile users are shoppers, too.

5. Use Video

If you’ve been hanging back from investing in video advertisements or investing more in video, it might be the edge you need for Q4.

According to Facebook research, “Nearly 1 in 3 mobile shoppers surveyed in the US said that video is the best medium for discovering new products.” So if you want to get more buyers, make more videos – both for Facebook and Instagram.

And yes, there is still enough time to get videos made before the major shopping holidays. Contact our Creative Studio team to learn more.

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