fbpx Increasing Your Advertising Budget in Anticipation of The Holiday Season


Increasing Your Advertising Budget in Anticipation of The Holiday Season

Louai Nasser

Sep 12, 2018

With the holiday season fast approaching, advertisers around the world are preparing themselves for the busiest period of the year. Of course, advertisers should constantly be on top of their game regardless of the time of the year. However, the last quarter is of utmost importance, as it represents the period when customers tend to loosen their purse strings and spend more than they usually do, prompting advertisers to follow suit.

So, with that in mind, here are some of the reasons that may persuade companies to increase their advertising budget in anticipation of the holiday and shopping seasons coming up in the fourth quarter.

Customers’ Consumption & Activity Increases

Let’s start with the most straightforward one.

In a period where consumers are expected to make more purchases than any other time of the year, it’s quite understandable that advertisers will want to ensure that their voices are being heard and their products are being seen and noticed by the public. Increasing brand awareness can be costly, especially when everyone else is trying to do so at the same time. Although it may weigh heavy on your budget, it can usually be compensated for by the increase in spending by the customers.

That’s because the holiday and shopping seasons are upon us and it will come as no surprise that people are preparing to dig deep into their pockets for the coming months. A sharp increase in online purchasing activity usually takes place during these periods, with these figures rising as a consequence of it.

  • Click-through rates (CTR) grow by 100%
  • Direct traffic increases by up to 150%
  • Average order value grows by 30%
  • Conversion rates can increase by 60%
  • Ad impressions increase by 50%

These are some impressive figures, and ones that should not be taken lightly. Considering how unusually high they are in comparison to the rest of the year, it would make sense that advertisers adapt and put in that extra effort and investment in promoting their products and services.

Challenging Competition

One of the biggest challenges companies face during the holiday and shopping season is standing out from the busy and crowded competition. In fact, it is usually noticeable for businesses to save some of their best promotional content and budget for the final quarter of the year, regardless of the type of medium they are using to convey their message.

As the battle between businesses heats up, customers will be the real beneficiaries as they have more to choose and better options to choose from. Competition may even save customers money as companies try to undercut each other and offer consumers the best possible deal on the market.

Businesses will also have to come out with the most appealing and engaging promotional content that they can think of as they aim to lure customers into purchasing from them. For that reason, it is important for businesses to ensure that they can invest a sufficient amount into their advertising budget in order to create the best and most attractive advertising campaign. According to reports, nearly 60% of all advertisers will significantly increase their advertising spending during the holiday seasons.

The extra effort that companies make during this pivotal period can not only help them succeed in persuading customers to buy from them during the busy shopping season but can also help transform them into loyal customers.

Increased Advertising Costs

So, as we’ve already mentioned, peak shopping seasons and holidays always have advertisers scrambling to purchase ads and ad space. This leaves Facebook with little choice but to raise the costs for advertising on their platform, in accordance with the economic laws of supply and demand. That’s because, generally, low supply and high demand result in an increase in price. The stronger the competition is, the higher the costs will be.

Bearing these facts in mind, it’s important to prepare yourself for higher ad prices for important events such as Thanksgiving, Christmas, Black Friday, Cyber Monday, New Years Eve and Day, and even during post-holiday sales. Therefore, it might be a good idea to consider investing in your advertising budget a little bit earlier in order to get the best prices.

Reduce Inventory

Another reason to further invest in your advertising budget is the size of the inventories some companies may have come the end of summer. Retailers will usually try to get rid of stock that is considered ‘off-season’, being items that customers won’t be looking for as much during the latter months of the year.

For instance, companies selling swimming wear may want to increase exposure of the remaining stock that they want to get rid of by applying sales promotions for these specific products, allowing customers to purchase them for a reduced price. By promoting these products, businesses can aim to reduce their losses by selling any remaining inventory, albeit at a discounted price.

Some Interesting Figures

To round it off, here are some noteworthy figures that could help you make your decision…

  • In 2017, 30% of US’ annual retail sales happened between Black Friday and Christmas.
  • Over the weekend of Black Friday and Cyber Monday in 2017, 43% of all sales were done through mobile devices, a figure that has risen strongly from the year before.
  • According to Adobe, that same weekend, mobile devices accounted for 61% of all store visits.
  • December 23 last year witnessed the most purchases ever made in the history of mobile commerce in the US: 48% of all purchases.
  • According to eMarketer, e-commerce is expected to further increase by more than 15% in the 2018 holiday season.

What are your thoughts on this topic? Do you agree that companies should do all they can in order to increase their advertising budget in preparation for the holiday season? Have you started planning for some of the most lucrative days of the year? If you’re interested, we would love to talk advertising strategies and campaigns with you! It’s the perfect time to try out your free two week trial with The Next Ad if you haven’t done so yet! Don’t miss out and sign up below!

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