It’s almost the most wonderful time of the year, shopping season! In anticipation of one of the busiest holidays on record, marketing teams around the world are gearing up to launch their holiday ad campaigns. In fact, as the seasonal creep continues, many have already begun. According to eMarketer, total U.S. retail spending during the 2018 holiday season reached $998 billion, and is expected to eclipse that total in 2019. With consumers opening their wallets earlier every year - nearly half are planning to start their holiday shopping before November this year - marketers must understand their shopping habits to create successful ad campaigns. But how much can they expect to pay?
To help marketing teams better understand and plan their holiday ad campaigns, we analyzed social media CPM (cost per mille) rates in the days leading up to, and immediately following, the year’s largest global shopping holidays: Singles’ Day and Black Friday. For marketing teams looking to optimize ad spend during the holiday season, here is what you need to know:
Not All Dates Will Bring Holiday Cheer to Your Budget
Based on aggregated global data of all customers, we found that Black Friday has the largest impact on the cost of social CPM, with an increase of 50 percent, followed by Cyber Monday at 38 percent. Though these days will require the most budget, marketers should expect to plan for higher spend in the days leading up to and after those dates as well. In 2018, social CPMs were 7 percent higher than normal two days before Black Friday and 19 percent just one day before. Further, pricing rates on the Saturday and Sunday of Black Friday weekend clocked in at 33 percent and 32 percent respectively.
The pricing wave didn’t stop on Cyber Monday either – the Tuesday after saw a 6 percent markup before CPMs returned to normal. This is a trend we're seeing at other times of the year as well, such as manufactured shopping holidays like Amazon Prime Day, when shoppers are more active than usual. Social media CPMs respond accordingly to meet that demand regardless of time of year. For marketers looking to allocate budget around the holidays, it is no longer a single day driving the market, but nearly a full week.
Based on our analysis, we expect that Black Friday will build upon the increases we saw in 2018 and continue to drive up social CPMs significantly in peak shopping periods. Marketers can expect that CPMs will start to rise one day prior to Black Friday at 15 percent, before actually peaking on Black Friday itself at 45 percent. Similar to last year, we predict social CPMs will drop slightly to the 30 percent range during Black Friday weekend.
Black Friday Drives the Global CPM Sleigh
The term “Black Friday” originated in Philadelphia in the 1960s and since then has become a global phenomenon. Roughly 20 different countries celebrate Black Friday, including the US, Canada, United Kingdom, Mexico, Australia, New Zealand, China, Japan, Russia, India, and Pakistan. As the convenience of e-commerce shopping continues to amplify Black Friday’s relevance across the globe, so will the targeted marketing efforts.
According to our analysis, Black Friday accounted for the greatest increase of social CPMs globally for the entire year. The reality is that marketing teams from around the world should be prepared for the Black Friday CPM pricing surge on social. Marketers looking to reach international shoppers should view holiday campaigns on a global scale, while still prioritizing personalization in each region.
A Holly Jolly SEA
The global impact of Black Friday on social CPMs is unmatched, but in Southeast Asia there is one holiday that carries more even pricing power. Singles’ Day has the biggest impact on CPMs in that region, even outranking Black Friday. Interestingly, Cyber Monday had no noticeable impact at all, showing that SEA’s ecommerce-first shopping mentality clearly outweighs online habits from other regions during the holiday period.
Looking ahead to 2019, we predict social media ad rates around Singles’ Day in SEA to mirror that of 2018. Commencing three days prior to 11.11 at 20 percent, pricing rates will peak on the day itself at 70 percent. Further, Black Friday and one day after are expected to come in at about a 15 percent markup.
What Does This Mean for Advertisers?
So, why are CPMs and competition so high during these times? It’s simple, shoppers spend a lot more money during these holidays and conversion rates are higher. For marketers looking to compete in the crowded Black Friday or Singles’ Day ad marketplace, there is a huge opportunity to capitalize on an audience that is ready to shop, but only if teams have a good strategy that encompasses creative, optimization and collaboration.
Marketers willing to take on the soaring costs of advertising on social during Q4 need to get the most out of their investment. To do so, focus on making the path to purchase as simple as possible for shoppers by pairing great copy and creative, with smart placement and even in-app purchasing options. What your ad looks like and how it functions will have a big impact on whether consumers engage, especially when competition is high. Marketers need to be agile during the most competitive time of year, optimizing the creative and copy in real-time to ensure that the money spent during the CPM surge isn’t put to waste.
Beyond the Seasons
The holiday season demonstrates the peak in both cost and competition when it comes to ad spend, but marketing teams should look at year-round CPM trends to inform their long-term social strategies. After peaking in 2018, we expect that CPMs will continue to decrease overall at the end of 2019 and into 2020.
To make the most of each social ad campaigns, marketing teams need to ensure that the creative elements of the ad are as impactful as the data-driven insights behind them. With the help of automation, companies can increase collaboration between social teams and creative teams to build personalized, targeted and optimize ads any time of year.