Holiday 2020 was challenging to predict, impacted by a national election, pandemic uncertainty, virtual holiday gatherings, and a long holiday shopping window.
Q4 2021 is looking to be just as unpredictable with supply chain issues and changes in digital tracking capabilities. However, there are steps brands can still take to ensure they are optimizing digital performance over the next three months.
Planning & Marketing Mix
- At this point, it is critical to have Q4 promo and messaging plans built and distributed to key agency partners. At the same time, build contingency plans for underperforming promos (e.g., if there are declines in click-through rate or conversion) and be ready to shift spend to other campaigns or key holiday shopping days.
- Out-of-stocks will be common this year. Capture emails or SMS permissions for potential customers who are interested in back in stock messages. Review product feeds regularly to ensure traffic is driving to in-stock products.
- Build campaign-level reporting for all digital channels to ensure there is a firm understanding of how key metrics (traffic, AOV, conversion, ROAS, CPC/CPM, revenue) are trending each week. Establish reporting now so that there is a clear baseline as holiday sales ramp.
Apple iOS changes in spring and summer have negatively impacted Facebook-reported ROAS across industries. While we’ve seen many advertisers diversify spend across different marketing channels (read more from Polly Wong in Modern Retail), it is still critical to optimize spend on Facebook and Instagram this holiday season.
- Adequate Goal-Setting: Ensure there is a clear understanding of Apple iOS impacts to ROAS and that there are specific ROAS goals for Retargeting, Retention and Acquisition. This will help ensure a healthy mix of spend between bottom and top-of-funnel campaigns. Even if at a lower ROAS, many of our clients still invest 60% of Facebook spend in Acquisition campaigns to fill the marketing funnel.
- Find and Target Holiday Shoppers: Test audiences based on previous holiday shopping behavior (e.g., customers who purchased during November and December 2019 and 2020) not only as specific Retention audiences, but also as a base for look-alike targeting.
- Review Product Feed and Product Data: Facebook continues to prioritize the use of Dynamic Product Ads (DPAs) and an optimized product feed is the first step in building a strong campaign. Review the feed and segment out any products that could drive down AOV (e.g., limit products under a certain price point, such as socks or pillow inserts). Build a testing strategy around increasing AOV to try and understand the most efficient product segmentation that balances conversion and AOV.
Apple iOS changes mean diminished visibility into email open rates and brands need to ensure they are making segmentation and spend decisions based on the most accurate metrics.
- Establish Your New Baseline: Comparing 2021 open rates to 2020 will not be an apples-to-apples comparison. Review performance data from 9/20/21 forward to understand current metrics and establish new open rate goals. Review user data to understand what percentage of your list uses Apple mail products.
- Focus on Clicks and Purchases: Do not rely solely on open or read behavior to segment or qualify email subscribers. Use clicks and purchases as more accurate measurements of activity. At the same time, do not remove or downgrade a contact who has not opened an email in the last 30 or 60 days. Instead, look for reactivation opportunities in key holiday messages to drive clicks.
- Integrate SMS: SMS has become a key channel for many of our clients, even those that target an older consumer. Test into SMS and develop valuable and personalized campaigns that speak to your most engaged customers. Abandoned cart SMS messages will be a valuable tool to stand out during the very distracting Cyber 5!
We can understand the uncertainty going into Holiday 2021, but are optimistic there are ways to ensure your digital dollars are spent as effectively as possible. Reporting and reacting quickly to performance indicators is crucial as the holiday season begins!