eCommerce Ad Spend During the Holidays: A 5-Step Strategy for Maximum ROI

The holiday season: it's make-or-break time for eCommerce businesses. With consumers eager to snag the best deals, competition for their attention—and wallets—is fierce. Advertising is key, but how do you make sure your ad spend actually works during the holiday rush? Should you increase, decrease, or hold steady on Christmas Eve and Christmas Day? This guide gives eCommerce managers a step-by-step strategy to maximize their return on investment (ROI) during the holiday shopping frenzy.

What You'll Achieve

By the end of this tutorial, you'll be able to:

• Understand holiday ad spend nuances.
• Analyze your historical data for optimal budget allocation.
• Implement effective strategies for different holiday season stages.
• Optimize ad campaigns for peak performance.
• Make data-driven decisions to increase ROI.

Prerequisites

Before you start, you'll need:

• Access to your eCommerce platform's analytics.
• Access to your ad platform(s) (e.g., Google Ads, Meta Ads).
• Historical data from previous holiday seasons (if available).
• A clear understanding of your key performance indicators (KPIs).

Step 1: Analyze Historical Data and Set Clear Goals

Before touching your ad spend, you need data. If you've run holiday campaigns before, this is your starting point. If not, analyze your pre-holiday period performance to establish a baseline.

• Review past performance: Look at conversion rates, cost per acquisition (CPA), return on ad spend (ROAS), and overall revenue from previous holiday seasons. Identify trends and patterns. Did certain products sell better? Were there specific days or times that drove more sales?
• Set realistic goals: Based on your historical data and current market conditions, set clear, measurable, achievable, relevant, and time-bound (SMART) goals for the upcoming holiday season. What revenue increase are you aiming for? What's your target ROAS?

Pro Tip: Use past data, but adjust based on current market trends. For example, if you see a shift towards mobile shopping, focus your efforts there.

Step 2: Segment Your Audience and Tailor Your Messaging

Here's what most guides get wrong: one-size-fits-all advertising never works, especially during the holidays. Creating targeted ad campaigns for different customer segments can significantly boost your results. Consider these segments:

• New Customers: Focus on brand awareness and acquisition. Offer attractive first-time buyer discounts or free shipping.
• Returning Customers: Reward loyalty with exclusive offers, early access to sales, or personalized recommendations.
• High-Value Customers: Treat your VIP customers with special offers and personalized experiences.
• Lookalike Audiences: Use your existing customer data to target new customers who share similar characteristics.

Warning: Don't use generic messaging. Personalize your ads based on the segment. Address their specific needs and pain points.

Let's be honest—the average order value (AOV) during the holiday season in the United States was approximately $163 in 2023 Statista. This highlights the importance of optimizing your website and ad campaigns for conversions.

Step 3: Plan Your Budget and Bidding Strategies

Budget allocation and bidding strategies are critical for maximizing ROI. Here's how to break it down:

• Early Bird Deals (Pre-Holiday): Increase your budget to build momentum and capture early shoppers. Also, 26% of holiday shoppers start their shopping before November NPD Group.
• Peak Season (Thanksgiving to Christmas): This is the most competitive period. Allocate the largest portion of your budget here, but closely monitor performance and adjust bids accordingly.
• Post-Christmas Sales (After Christmas): Reduce your budget slightly. Focus on clearing out inventory with deep discounts. You can see the biggest returns here, but still monitor your spend.

Bidding Strategies:

• Automated Bidding: Use automated bidding strategies like “Maximize Conversions” or “Target ROAS” to optimize your bids based on real-time data.
• Manual Bidding: If you have the expertise, manual bidding gives you more control, but it requires constant monitoring and adjustments.

Tip: Experiment with different bidding strategies during the pre-holiday period to see what works best for your products and audience.

Step 4: Optimize Your Ads and Landing Pages

Even with the perfect budget and targeting, your ads won't convert if they're not compelling. Here's how to optimize:

• Compelling Ad Copy: Use strong calls to action (CTAs). Highlight limited-time offers, discounts, and free shipping. Use holiday-themed keywords.
• High-Quality Visuals: Use professional-looking images and videos. Show your products in action and create a sense of urgency.
• Landing Page Optimization: Ensure your landing pages are relevant to your ads and optimized for conversions. Make sure the landing pages are fast, mobile-friendly, and have clear CTAs.

Step 5: Monitor, Analyze, and Adjust in Real-Time

Holiday advertising is dynamic. You need to constantly monitor your campaigns and make adjustments based on performance. Here's what to track:

• Conversion Rate: Are people buying your products?
• Cost Per Acquisition (CPA): How much does it cost to acquire a customer?
• Return on Ad Spend (ROAS): Are you making a profit on your ad spend?
• Website Traffic: Are you driving traffic to your site?

Warning: Don't wait until the end of the holiday season to analyze your results. Monitor your campaigns daily and make adjustments as needed. If one ad isn't performing, pause it and try a different one.

Sound familiar? According to a survey from Deloitte, 57% of consumers plan to shop online this holiday season Deloitte. This emphasizes the importance of a strong online advertising strategy.

Should You Adjust Ad Spend on Christmas Eve and Christmas?

This is a common question, and the answer is: it depends. The Reddit thread, "Are you increasing/decreasing spend Christmas eve and Christmas", highlights the uncertainty around this topic, with users questioning whether to adjust spend on these days. It's important to analyze your data and make a decision based on your specific business and target audience.

One Reddit user commented: "Are you increasing/decreasing spend on Christmas eve/christmas do people spend on these days as most of the shopping might already be completed or are you keeping the spend as is".

• Considerations:
  • Audience Behavior: Are your target customers likely to be shopping on these days? If you sell last-minute gifts or experiences, consider maintaining or even increasing your spend.
  • Competition: Competitors may decrease their spend, creating an opportunity for you to capture a larger share of the market.
  • Data Analysis: Review your historical data to see if you've had successful sales on these days in the past. If you have data, use it.

Pro Tip: If you're unsure, start with a slight decrease in spend and monitor performance closely. You can always increase it if you see positive results.

Troubleshooting

• Low Conversion Rates: Review your landing pages, ad copy, and targeting. Make sure everything is aligned and relevant.
• High CPA: Optimize your bids, refine your targeting, and test different ad creatives.
• Low ROAS: Review your product pricing, margins, and overall campaign performance. Consider offering discounts or bundles.
• Technical Issues: Ensure your website is up and running, your payment gateway is working, and your tracking pixels are firing correctly.

Next Steps

• Continuous Testing: A/B test different ad creatives, landing pages, and offers throughout the holiday season.
• Analyze Results: Review your performance at the end of the season and identify what worked and what didn't.
• Plan Ahead: Start planning your holiday advertising campaigns early to give yourself ample time for preparation and testing. Consider using a tool like CRO Benchmark to analyze your website's performance and identify areas for improvement before the holiday rush. It can help identify conversion leaks, provide tailored A/B testing ideas, and give you a clear CRO Index Score to track your progress.

Ultimately

Optimizing your eCommerce ad spend during the holidays is crucial for maximizing your ROI and achieving your revenue goals. By following these steps, you can create a data-driven strategy that drives conversions and sets your business up for success. Remember to monitor your campaigns closely, make adjustments as needed, and always be testing to find what works best for your brand and your customers. The holiday season is a great opportunity to make significant gains in revenue, but you must be prepared and always focus on the customer experience.