It's that time of year again – time to plan your holiday advertising budget.
Although it might be annoying that radio stations start playing Christmas songs the day after Halloween, it is imperative that you follow suit and be one of the first to arrive at this holiday party. During the last holiday season, Walmart spent over $50 million and Target hashed out $28 million on TV ads before Thanksgiving. Ad competition is fierce, so it's important to become a competitive force on any (and all) platforms that digital giants aren't yet leveraging well in advance of the holiday season.
The holidays can make up as much as 30 percent of your annual sales, so it's not wise to leave anything to chance. With holiday sales jumping 3.2 percent in 2015, and then again by 3.6 percent in 2016, you can expect more of the same this upcoming season, especially if the economy continues to boom.
Of course, achieving almost a third of your annual revenue in 30 days can't be done by accident, nor can it be accomplished with mediocre planning. You need to set a clear strategy and pull off a near-flawless execution to achieve your ultimate goal: sales. With this in mind, it's crucial to start planning your ad spend now.
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5 holiday budgeting tips to keep your brand afloat
Creating a budget is rarely a fun task, and it can feel overwhelming. From product costs and margin cuts to logistics and ad spend, it can seem like there are too many elements to consider as you move into the holiday rush. But managing your ad spend is far from impossible. As long as your strategy is fully fleshed out and you've set a comfortable budget bumper of about 20 percent, you're on the right path toward holiday success.
Smart budgetary decisions will help you make the most of your ad spend. Here's where to begin:
1. Start planning now.
Consumers start their holiday shopping earlier and earlier each year. In fact, a report from the National Retail Foundation estimates that around 40 percent begin shopping for the holidays even before Halloween. If you aren't thinking about your holiday budget now, time is running out.
Unfortunately, there’s no one-size-fits-all approach to setting an advertising budget because there are too many factors at play. To act strategically, look at your profit margins closely as you set your advertising budget and product pricing. Consider production costs in relation to the fees associated with getting your goods on store shelves. Think about your goals as well — getting traffic to your page will cost less than converting that traffic.
Your advertising budget will also depend on your past efforts. If you have great historical data, you can spend less on advertising, whereas if you're new to online pay-per-click ads, you'll need to spend more money so you can test a variety of audiences. Remember, ad spend also depends on what you can afford, so don't overshoot.
2. Invest two to five times more than your normal ad spend.
Competition naturally heats up prior to the holidays, which means you'll need to spend anywhere from two to five times more on ads to stand out from the crowd. However, don't wait until after Thanksgiving to ramp up your spending.
To get the most out of your budget, start advertising in October and November. In doing so, you'll already have a good idea of what messaging works best, what audiences are most interested in your company and what keywords you should be targeting. A PPC advertising agency can point you in the right direction in terms of where you should focus your ad spend, how much you should expand your budget, and what results you can expect.
3. Know the competition.
There are many ways to reach a target audience. But during the holiday season, it's almost always best when done before the competition. To stay ahead of the curve, get to know competitors' schedules and the channels they use to engage with consumers.
To keep tabs on Facebook Ads, navigate to the competitor's Facebook page and click on Info and Ads on the lower left side of the screen. This will show you all of the active Facebook ads that are currently running. In addition, spend some time on the competitor's website; with any luck, you'll dig up its remarketing ads. You can also sign up for the competitor's website updates or newsletter, as it might increase your chances of seeing an ad, and even if it doesn't, you'll still have a firsthand look at its promotions.
4. Don't forget about retargeting.
It's one of the oldest tropes around: Boy visits site, boy leaves site, boy finds site again – that is, after a cookie on his browser triggers an ad to recapture his attention. Thus, retargeting past visitors can shorten the time it takes to build enough brand awareness to become a factor in the buying decision.
To retarget strategically, consider your audience size. If the number of people you are retargeting is on the smaller side (say, thousands), you'll want to keep them in one large group to ensure the ad frequency is low. With a larger audience to retarget, segment audience members and only retarget those most likely to convert. For example, these are the individuals who previously spent a significant amount of time on your site.
Additionally, most advertising platforms allow you to limit total impressions or impressions per day per user. You can also limit impressions by segmenting your audience members by the number of days since they last visited your site and only targeting recent visitors.
5. Invest in email campaigns.
Email will often generate the greatest return at the lowest cost. With this in mind, don't wait until the holidays to begin building a high-quality email list. Better yet, divide your email list into smaller segments to strategically target and personalize your campaign.
Next, highlight specific features that might resonate with each audience. Remember, people respond when an email is relevant to their needs, and they quickly disregard generic messages. If you've done the above but your email response is still low, take the time to limit the frequency of your email blasts and look into refocusing the target audience in order to improve your engagement.
As we move into the upcoming holiday season, make sure your brand's digital marketing campaign isn't already falling behind. As long as you follow these steps to prepare your strategy and start your holiday marketing early, you'll be well on your way to staying ahead of the competition and ending the year on a profitable note.