Why increasing ad spend around Black Friday
could be a waste of money

by Maor Sadra, CEO, INCRMNTAL

This was originally published on NewDigitalAge

Black Friday and Cyber Monday are undoubtedly the biggest shopping days for brands in the UK. Last year, according to Mintel, 49% of UK consumers made a purchase on Black Friday and sales reached an estimated £12.3 billion. Given ecommerce revenue for the whole of 2022 was £132.7 billion, Black Friday sales represented almost 10% of the entire ecommerce spend for the year.

It’s easy to understand then why advertisers pour significant budgets into Black Friday and Cyber Monday, with the anticipation that they will see considerable returns. But are brand campaigns really delivering the return on investment they are seeking?

Dates trump campaigns when it comes to sales

INCRMNTAL research has found that while Black Friday, Cyber Monday and other major shopping days clearly yield substantial incremental sales and revenues, often these can be attributed to the dates themselves, and the promotions leading up to these shopping holidays, rather than results driven by ad campaigns. It’s fair to assume that many consumers looking to make a purchase on Black Friday already know which product they want to buy, so being served an advert for a different item may be redundant.

From our analytics, it appears to be the case across all sectors; gaming, fashion, technology etc that the value of ad spend during shopping holidays is lower than the incremental value during normal seasonality. And we aren’t alone in finding this, eMarketer uncovered that each ad dollar spent on Prime Day 2023 in the US generated 25% less revenue than in 2021.

So many advertisers are in fact wasting money on shopping day campaigns, which could be better spent to help boost sales during periods when they are typically lower.  

So brands shouldn’t advertise around Black Friday?

Although advertising campaigns around shopping dates often aren’t delivering the value brands are seeking, it doesn’t mean there’s no value in marketing at all. In the example below for an ecommerce brand, we can see that prioritising a certain type of advertising, in this case promotions, did deliver in terms of incremental sales for Black Friday. In fact, promotions were accountable for 83% of the brand’s sales, while paid marketing activities only accounted for 17%. This makes sense, as the one thing consumers are looking for when it comes to Black Friday deals – particularly in line with the cost of living crisis – is value for money.

However, Black Friday results can also vary depending on the industry and in casual gaming advertisers, we sometimes see conversions go down around this date. Some of this decrease can be directly attributed to the competitive CPMs during this weekend, and the fact that many performance advertisers will spend less, as their campaigns will not match with the CPM bids of brands trying to capitalize on the shopping craze.

Making the right marketing decisions this November

The only way to really know which – if any – advertising or marketing campaigns are delivering on Black Friday and other shopping holidays is through effective measurement. Understanding the impact these dates and other factors have on advertising is one of the most powerful forces in a brand’s performance. Without knowing which tactics are driving success and which are not, brands could be wasting huge sums of money on redundant campaigns that aren’t generating ROI.

Comprehensive marketing measurement here is key. Its vital brands work with partners that can measure every aspect of their activity across all channels, so they can see precisely how every operational marketing change affects performance across certain channels and on certain times and dates, as well as how seasonality impacts this. This can be achieved through causality modeling, which will apply seasonality data to the operational changes marketers make on a day-to-day basis to measure incrementality continuously. It’s privacy-safe, and rather than applying learnings over user-level data, causality is able to predict what would happen if ad spend on a particular campaign is increased or decreased. Making it the perfect tool for brands considering whether or not to boost budgets around Black Friday.