DJ Sutton, Director of Media Services
November 6th, 2023
Unlocking a winning paid social strategy this holiday season will require an understanding of the macroeconomic trends driving consumer spending in 2023. In this guide, we explore these trends and outline five principles that every digital marketer should embrace heading into the holidays.
We alluded to this in Part 1 of our Holiday 2023 Guide, H2 Economic Snapshot, but holiday shopping is expected to start earlier this year than ever before. 43% of consumers plan on doing most of their holiday shopping before the holiday season and into early November (which means we are already underway). And that’s not the only shift anticipated for holiday shopping in 2023 - consumers are searching for deals and counting on brands to deliver. In the same study, conducted by PWC, 37% of respondents said they expect brands to offer holiday promotions before Thanksgiving.
This forecast favors brands that are leaning into early holiday discounts, especially if their promotion period has already started (or starts soon) and will run for the weeks leading up to Thanksgiving. And if your brand doesn’t fall into this category, don’t despair, we have guidance for you in rule #2.
Brands that aren’t yet offering holiday-related deals (or brands that have flexibility in their budget) should use this time to invest in upper-funnel awareness campaigns so that they are top-of-mind when their holiday offerings go live. Conversions will most likely drop during this period, but brands that are able to effectively reach their target audience are better positioned to see conversions rebound in the peak season.
Brands with tight budget constraints may not have the flexibility to deploy an early awareness play, and should instead ensure that their holiday goals are informed by the market forces expected to shape the holidays in 2023. “Find the demand where it is,” says DJ Sutton, Director of Media Services at New Engen. “Don’t expect your campaigns to scale or hit lofty targets until you've reached your promotion period.”
Investigate performance trends from 2022 (and even 2021) to understand what drove results for your brand before the holiday season. Then, contextualize these findings in terms of the changes we expect to see in 2023. Take an inventory of how previous holiday offerings have performed, and use these learnings to inform your approach this holiday season. Furthermore, if you are investing in early holiday promotions and expect a boost in conversion rates, leverage this framework to validate your budgets to key stakeholders.
Measure performance holistically and avoid over-correcting for micro trends before they’ve fully played out. DJ’s advice? “Trust traffic over conversions.” Ads are beholden to brand messaging, and, until audiences are given a reason to convert (i.e., holiday deals), the best ads will be the ones driving traffic for your brand.
Create urgency before pre-shipping cutoffs to ensure you’re top-of-mind for holiday shoppers. When the cutoff date has passed, reach customers with in-store messaging and promotions, and incentivize gift card purchases. And don’t forget to leverage local inventory to drive Buy Online, Pickup In-Store sales.
Q5 (the period between Christmas and mid-January) used to be a little-known secret for marketers who capitalized on the annual drop in CPMs after the peak season. But as platforms and advertisers have caught on, the case for heavy Q5 investment has been diluted and brands should be tactical in their approach. “In the week or two after Christmas, we generally see some pop from consumers spending money or gift cards they received over the holidays,” explains DJ. “But rather than over-indexing on Q5 investment beforehand, brands should be patient and look for opportunities as they come up."
DJ also cautions against running promotions during Q5. “A lot of brands will offer discounts during this period to ‘take advantage’ of cheap CPMs or juice up year-end numbers," he says. "But in reality, this tactic can lead to a volatile start to Q1 by skewing demand that would have otherwise hit in January. It’s not worth discounting when CPMs are already cheap - you already have the market working in your favor." Instead, focus your ad spend where the opportunities already exist. Are you seeing high CVR? Great, scale into it. But don’t use promotions to manipulate demand, because you’ll pay the price in 2024.