When holiday shopping kicks into full swing, luck will favor the prepared. Proper planning and execution are what separate the eCommerce winners from the losers - especially during the holidays. At OMG Commerce we’ve been helping online businesses capitalize on holiday shopping for the better part of a decade. Nothing is as exciting for online retailers as a holiday shopping season that exceeds expectations. By the same token, few things are as disheartening as a holiday shopping season that falls short of goals. Especially when it’s in your control to have a great season.
In this article, I want to outline what we expect for Holiday Shopping 2021 and how you can best prepare.
First, a few things that we expect:
- Online shopping growth will slow, but eCommerce will have another record year. Last year, fueled by the pandemic, online shopping grew a whopping 32.5% year-over-year. That kind of growth obviously isn’t sustainable. Especially considering that online shopping had been growing at a pretty steady ~15% YoY prior to the pandemic. For 2021, eMarketer estimates that online shopping will grow YoY just 11%. While that’s a slower growth rate than last year, it’s still impressive. And it means we will have another record holiday season with online sales counting for a whopping 18.9% of total holiday sales.
- Mobile online purchases will approach 75% of all eCommerce purchases. It’s no secret that mobile shopping makes up the majority of online shopping and research. This year online purchases made on mobile devices are estimated to be 73% of all online purchases (Statista report). I hope your mobile ad game is on target.
- Digital Ad Spending will be frothy. No surprise here, but we’ve seen ad costs this year rise 20-25% YoY at times. Last year during holiday shopping, our advertisers saw ad costs increase 20% YoY. We expect to see similar cost increases this holiday season too.
Ready to dominate holiday shopping this year? Here are 7 tips to get you poised and ready for an amazing year.
TIP 1 : Go Full Funnel - But Be Flexible
Online ad costs always reach their peak during the frenzy of holiday shopping. That typically means that during Cyber 5 (the five-day period that starts with Thanksgiving, includes Black Friday, and ends with Cyber Monday) and into early December we see the highest ad costs. If Prime Day and Q2 ad performance are any indication, this year’s holiday shopping season will continue the upward trend in CPCs and CPMs. As a reference, we saw ad costs during Prime Day rise 25% this year compared to last year’s Prime Day. Last year during Cyber 5, we saw CPCs rise 20% YoY for our clients (Cyber 5 2020 recap). Rising costs are never ideal, but it’s not all bad news. The good news is that conversion rates usually rise faster than ad costs during the holidays. Last year conversion rates rose 50% at the same time ad costs rose 20%. So paying a premium for ads was still worth it for most of our clients.
So, how do we need to go full funnel, but still be flexible? During the holiday season, the same shopping activities of product discovery (awareness), product evaluation (consideration), and product selection (purchase) still take place, but in a more condensed manner. During non-holiday times shoppers feel free to explore products, comparison shop, and possibly delay their purchase a bit to make sure they get the perfect product and the right deal. During the holidays, gifts must be purchased and purchased quickly. Little Suzie isn’t very enthusiastic about opening a present on December 27th just so her parents could save a buck. While the general rule for the season is that conversion rates increase higher than ad costs, there are some periods during the holidays that are just too competitive for certain types of ad campaigns.
Here’s how we look at your various campaigns — whether you’re reaching someone in their discovery phase (what we call awareness campaigns), when they are in product evaluation mode (consideration campaigns), or when they have their wallet out ready to select their product (purchase campaigns).
- Run awareness campaigns all holiday season, but be ready to slow down spend on these types of campaigns when ad costs become untenable. Shoppers are still looking for ideas all throughout the holiday shopping season, so running top of funnel awareness campaigns on YouTube and Facebook during the holiday shopping season can still be a great move. But, when ad costs get really high, awareness campaigns might be hard to justify. Usually you want to push hard on awareness campaigns leading up to holiday shopping, and then be flexible during holiday shopping, depending on how much ad costs adjust. During the peak of Cyber 5 you might need to slow down your ad spend on top-of-funnel awareness campaigns.
- Run consideration and remarketing (purchase) campaigns all season, but be ready to lean into these a little harder when you need to pause or slow down your awareness campaigns. During Cyber 5 and into early December you’ll likely need to shift more budget into your search, shopping, and remarketing campaigns as you pull back some from your awareness campaigns that you’re running on YouTube and Facebook.
TIP 2 : Get clear visibility into consumer behavior by triangulating your conversion data
At this time, the biggest concern at the front of my mind is conversion tracking in the midst of online privacy changes. iOS 14 and other privacy initiatives are making conversion tracking increasingly difficult. This makes it really hard to see what campaigns are working and what campaigns aren’t so you can make proper adjustments. I think it’s becoming imperative to consider third-party attribution tools that rely on first-party data. I typically recommend the use of in-platform data (what you see in Google Ads or Facebook ads manager), plus Google Analytics, and a third-party provider. Some of our current client favorites are North Beam, Wicked Reports, and Hyros. While each of these tools have their pros and cons (no tool is perfect), I definitely think you should consider a tool like this if you aren’t already using one.
TIP 3 : Build Your Lists
Leading up to the holiday season is the best time to build your lists. What lists am I referring to?
Remarketing lists. You want robust and up-to-date remarketing lists that you can target with your Google, YouTube, and Facebook ads. We usually split our lists up into 30-day, 60-day and 90-day segments. You might consider shorter duration segments like 1-day, 7-day, and 14-day segments depending on how much traffic you get. What specific remarketing lists do we recommend?
- All site visitors
- All purchasers
- Abandoned cart
- All product page viewers
Email lists. Having a properly segmented email list that you can send offers too is an absolute must during the holidays. What lists do we recommend?
- All subscribers, non-buyers
- All buyers, segmented by product category
- All repeat buyers (VIPs)
SMS list. Want to really step up your SMS game? Listen to this podcast I recorded with Arri Bagah of Conversmart on 4 Keys to Effective Text Marketing.
The good news is that you can continue to drive sales while you build your lists. Remarketing campaigns are usually cheaper and more efficient than prospecting campaigns and the cost to deliver emails and SMS messages is super affordable. For our clients, remarketing customer acquisition costs are often half to one-third the cost of cold traffic customer acquisition costs. If you build your audiences now, you’ll have the opportunity to shift more of your budget to your remarketing lists when top of funnel awareness campaigns become too expensive.
TIP 4 : Provide The Right Offer At The Right Time
Holiday shoppers are looking for the right product at the right deal. They don’t want to make a poor gift buying decision and they don’t want to over pay. Here are some things to consider as you plan out your holiday offers.
- People expect deals, offers, and “on-point” messaging. Shoppers expect something special during the holidays. Keeping your message or your offers exactly the same as the rest of the year will likely result in subpar conversion rates.
- Craft deals that will motivate customers while protecting your brand. Going too deep on price cuts can result in a quick sales bonanza, but could damage your brand and train shoppers not to pay full retail price later. We have several clients who rarely offer discounts. In those cases a simple 10% discount on certain products can feel like a big deal and will still protect your brand value. Bundling products can also be an easy way to discount without making it seem like you’re slashing prices out of desperation. Plus, bundles can make gift buying easier. Bundles can often make for better gifts than a single product.
- Deals are important, but so is convenience. What about helping people achieve their ultimate goal - getting the right gift at the right time with little hassle? How about highlighting fast shipping or at least guaranteed shipping dates? Sometimes convenience outweighs saving a buck for certain shoppers if they’re convinced that your products are the perfect gift.
- Deals that don’t involve discounting your core product. What about free bonus gifts or mystery gifts? Our friends at Groove Life now offer a deeply discounted “mystery gift” ring as an upsell when you’re ordering your ring. This is a brilliant strategy any time, but especially during the holidays. A mystery ring could be a perfect stocking stuffer or gift for that hard-to-buy-for special someone. And they are using mystery rings likely to get rid of unsold inventory.
TIP 5 : Fill In The Holes
Your Search and Shopping Approach - We audit hundreds of Google Ads accounts each year in addition to the accounts we manage on an ongoing basis. It’s very common for us to audit accounts that are doing fine on the surface, but are missing serious opportunities for growth. It’s not uncommon to see search and shopping campaigns delivering a 250-300% ROAS or higher creating the illusion that everything is great. Once we dive deeper, we often find several features, settings, targeting options, or bid strategies missing that could improve either volume, return on ad spend, or both. Here are a few things you should consider now to make the most of your search and shopping efforts.
- Surfaces across Google. Google shopping has long been a favorite for online retailers and an area where OMG Commerce shines. For a detailed look at how to get the most from Google Shopping ads, check out the guide I wrote for Shopify earlier this year. Surfaces across Google allow your Google Shopping ads to appear on YouTube, in Gmail and other places. You’ve maybe experienced this yourself when you search for something on Google, then later see Google Shopping ads on YouTube for similar products. These ads can be effective anytime, but especially during the holidays.
- Leverage Dynamic Search Ads (DSAs). Dynamic Search Ads allow you to harness Google’s machine learning to run search ads for all of your product catalog without requiring a super detailed build out of keywords and ad groups. This can be a pretty easy step to really increasing your search ad volume.
- Highlight promotional pricing. If you are running discounts for the holidays, you can take advantage of promotional pricing both in Search and Shopping ads. For Search ads, you need to run promotion extensions that allow for your sales details to show under your existing Search ads. For Shopping, you can use the “sales price” field. This will allow Google to highlight that your price has dropped and your item is on sale. This is a powerful visualization that increases clicks on your listings and helps increase sales.
- RSAs and Extensions. Responsive search ads allow you to combine your marketing and copywriting strengths with Google’s machine learning to improve your ad performance.
- Adapt your bid strategy for holiday shopping. Get ready to bid more aggressively. As competition heats up, bid levels required to reach customers also go up. One simple way to get your bids ready is to use a bid automation strategy like target return on ad spend (target ROAS). As conversion rates increase during holiday shopping, using a bid strategy like target ROAS will allow Google to bid more aggressively and still reach your ROAS goals.
TIP 6 : Harness a Ubiquitous Remarketing Approach
One way we see some eCommerce companies come up short during the holidays is when they depend on a weak or underdeveloped remarketing campaign structure. Most eCommerce brands we meet are engaged in remarketing, but very few are maximizing their remarketing approach. So where should you be running remarketing campaigns?
- Discovery. Discovery ads show up as a Display ad on YouTube, Gmail, and in the Google Discover feed (on your mobile Google app). These ads really command attention and show up in placements where your competitors probably aren’t advertising. We often see Discovery ads perform 30-50% better than standard display ads.
- YouTube. YouTube ads have the unique ability to stop shoppers in their tracks and drive them to start shopping your site whether they are brand new to your site or have been there a few times. No remarketing campaign structure is complete without at least some YouTube remarketing.
- Google Display Network (GDN). GDN is what most people think of when they think of remarketing on Google. We recommend dynamic remarketing where Google uses your product feed to build custom ads tailored to your shoppers. With dynamic remarketing, shoppers see ads featuring the actual products they viewed while on your website. We also recommend responsive ads where you give Google a few headlines, descriptions, and images and they will mix and match to create a great ad. Responsive ads are preferred to static ads and allow for more placement opportunities and more visibility.
- Remarketing Lists for Search Ads (RLSAs). It’s very common for shoppers to see a YouTube or Facebook ad, visit your site, not purchase, and then forget your name. Enter RLSAs. This allows you to target search ads or shopping ads to remarketing lists. If a previous site visitor is back on Google searching for products like yours, you definitely want your ad to show for them. RLSAs help you do that.
TIP 7 : Leverage YouTube
Leverage the latest and greatest from YouTube for growth - We have a lot of merchants who come to us because they’ve had success on Facebook and they want to diversify into YouTube traffic. We’re a top spender on YouTube ads for agencies our size, so our reputation precedes us a bit. We’ve found that if a company can successfully run top of funnel awareness campaigns on Facebook, then YouTube will most likely be a good fit too. BUT - the platform is quite different. The structure and length of video ads that work on YouTube are quite different from video ads that thrive on Facebook. It often takes a few weeks to a few months to dial in your YouTube performance. It’s much easier to find the right combinations of winning audiences, videos, and landing pages BEFORE holiday shopping reaches its peak. To get the full scoop on how to scale with YouTube, I highly recommend our recent free webinar, The Winning Formula for Scale, that features experts from OMG Commerce, Google, and beyond. For now, here are a few tips:
- Run Video Action Campaigns (VACs). In addition to pre-roll or instream placements, VACs include autoplay ad placements in the YouTube mobile app. We’ve found that VACs often drive more impressions and more views while also driving lower cost CPAs.
- Utilize YouTube ads with Merchant Center extensions. This is Google’s new version of TrueView for Shopping. But it’s better. This extension allows you to highlight top products via Google Shopping ads that appear next to your YouTube video. This is YouTube ads + Google Shopping ads. It’s a pretty great combo. We’ve seen YouTube ads with Merchant Center extensions perform very well for consideration and remarketing campaigns and sometimes for top of funnel awareness campaigns.
- Leverage viewed video audiences. We discussed remarketing audiences a few times above. There’s another audience that’s similar and also very powerful - viewed video audiences. These audiences are made up of people who’ve viewed one of your videos to the billable point in the video. Which means they’ve watched at least 30 seconds of your video, or they’ve watched the entire video if it’s less than 30 seconds. We like to run YouTube campaigns showing additional video ads to people who’ve viewed a video, but haven’t converted. We also layer in viewed video audiences to our search and shopping campaigns. It’s very common for someone to watch a view, not take action immediately, but then search for your product on Google at a later time. Often, they can’t exactly remember your brand so they make more of a category based search.
- Lean into intent-based audiences. One of the great differentiators between YouTube and other online platforms is the ability to understand user intent. You can run ads on YouTube targeted users based on what they’ve recently searched for on Google. You can also target someone based on what they are searching for and watching on YouTube at the moment. Reaching the right shopper at the right time is easy on YouTube.
So how is your holiday strategy looking now? Need more help getting ready? Request a strategy session from the team at OMG. While we’ve been unusually busy this year, we still want to make time to talk to great eCommerce brands. Also, you can check out a few of our guides and resources to help you get ready to dominate this holiday season.