Why Creative is Paramount for This Year’s Holiday Ads

Advertising endured a brutal blow in the first half of 2020 as Covid-19 slashed CPMs and isolated shoppers in their homes. But the ad market is recovering, shoppers are embracing digital channels to an unprecedented degree, and the holidays offer brands a final chance to capitalize on a tough year.

Brian Bowman, founder and CEO of Customer Acquisition, shared with Street Fight his reflections on advertising in the year of Covid-19 and how brands can capitalize in Q4.

How have advertising costs developed since the start of the Covid-19 pandemic?

At the start of the Covid-19 pandemic in March, advertisers across verticals pulled back, effectively crashing CPMs globally. Travel, retail, and other services businesses reduced ad spend because people couldn’t travel or go out. However, this posed an opportunity for businesses that could benefit from advertising to people staying at home and using entertainment, gaming, and e-commerce apps.While there were additional peaks and valleys in CPMs through spring and summer, the ad market appeared to fully recover in mid-August. In fact, we’re also now seeing some spikes in CPMs as the US election closes in.

How do you expect CPMs to change in the next couple of months based on past trends?

Q4 and particularly the week surrounding Black Friday and Cyber Monday typically see advertising CPMs spike by 30-49%. The competition for quality inventory is fierce. We’ve also seen that Facebook ads, in particular, spike in price during Q4 because advertisers find it to be such an effective channel for new customer acquisition during the holidays. The good news is that costs do eventually drop, typically starting from December 26. So advertisers can enjoy some of the most efficient CPMs of the year from December 26 through to Valentine’s Day on February 14, 2021.

What challenges does this year’s holiday season uniquely present due to Covid?

Over the past several years, the percentage of holiday advertising dollars have shifted somewhat from TV to other platforms, and particularly to mobile. But this may be the first year that e-commerce apps are a primary means for consumers to do their holiday gift shopping instead of in-person shopping at stores and malls. We expect more pressure on e-commerce, and this may pose uniquely high CPMs and more competition in the market than past years. In particular, there’s typically an advertising surge around the last day of shipping, but this may start sooner this year as consumers worry about shipping reliability. Marketers will likely front-load a lot of their spend. That said, it’s an uncertain time and hard to predict what will happen even a week from now.

How will the most nimble brands prepare?

When marketers are all using the same platforms and automation tools to bid and compete against each other this holiday season (like with Facebook Automated App Ads and Google App Campaigns), the key differentiator will be ad creative. Preparing an arsenal of high-performing creative will be critical to advertisers in order to keep costs down and be effective this year. Brands should start soon, now, and plan to have more frequent creative refreshes to fight creative fatigue and drive conversions. Also, brands should develop holiday-themed creative to increase relevance scores. This can help reduce some of the higher costs of holiday ads.

What technologies will drive successful advertising strategy through December?

Since Apple has delayed the depreciation of the iOS Users’ Identifier for Advertisers (IDFA), a feature that allows for targeted mobile advertising, until 2021, we’re expecting no material change in advertising technologies through this December. It should be business as usual for advertisers using key platforms like Facebook Ads and Google Ads to reach consumers this holiday season.

Tags:
Joe Zappa is the Managing Editor of Street Fight. He joined Street Fight as a contributing writer in 2015, has compiled the daily newsletter since 2016, and has spearheaded the newsroom's editorial operations since 2018. Shoot him an email at jzappa@streetfightmag.com.