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Why You Should Increase Your Advertising Budget during the Holiday Season

It might feel too early to talk about the holiday season, but in reality, consumers have already started crossing things off their holiday shopping list. When it comes to the budgeting for your ad spending throughout the year, all months shouldn’t be treated equally. It makes sense to increase exposure and spend more money on advertising during the months when more consumers are making purchases.

3 min read

Why you should increase your advertising budget during the holiday season

It might feel too early to talk about the holiday season, but in reality, consumers have already started crossing things off their holiday shopping list. When it comes to the budgeting for your advertising spending throughout the year, all months shouldn’t be treated equally. It makes sense to increase exposure and spend more money on advertising during the months when more consumers are making purchases. This may seem like a no-brainer. Yet, retail sales aside, there are some other crucial reasons to increase your advertising budget during the final three months of the year. In this blog, we give you five reasons why you should spend a disproportionate amount of money on your advertising during this crucial time of the year.

1 All numbers are rising

With increased marketing and advertising methods, the holiday season is the season when all numbers are rising:

  • Ad impressions rise by 50%
  • Click-through rates increase by 100%
  • Direct traffic rises to 150%
  • Average order value grows by 30%
  • Conversion rates can go up to 60%

(Source: Kissmetrics & Monetate).

Considering these rising numbers, it seems logical to spend more money on advertising during that time of the year.

2 Increased competition

A second reason for increasing your advertising budget concerns your rivals. During the holidays, competition for limited ad space heats up. With all this competition, your normal advertising strategy might not work. To be able to stand out from the crowd and don’t get lost in the big ocean of ads, you need to spend more money on your advertising. The holiday season is the time when advertisers spread their big guns in terms of ads. According to Forbes, companies in the apparel and technology industry, for example, spend twice as much on their holiday advertising than compared to the rest of the calendar year, making this even more challenging for you to compete. This is why it is important to prepare your budget and advertising strategy beforehand.

3 Advertising costs are increasing

More competition means higher advertising costs. With the high competition, retail and e-commerce advertisers will see their CPM spike, especially between Thanksgiving Day and Cyber Monday. This is why you need to start spending more on your advertising early, when competition is less intense. The earlier you invest in Facebook advertising, the better the results. This means, investing more in October and November will pay off in December, when advertising costs are higher than usual.

4 Online sales rise before Christmas

The rise in sales before Christmas is another reason why you should increase your advertising budget during the holiday season. According to research by Forbes, most sales actually happen in November during Black Friday and Cyber Monday:

  • 42% of consumers surveyed will shop on Black Friday
  • 47% will make purchases on Cyber Monday

Moreover, most people get convinced by online ads rather than television ads with 86% of consumers doing online shopping according to Kissmetrics. The majority of consumers is going to make online purchases via their mobile phones. Another reason to move towards mobile ads.

5 Get rid of your inventory (if you’re a retailer)

A final reason to increase your advertising budget during the holiday season relates to your inventory. Let’s say you are a retailer selling clothes. Summer is over and you need to get rid of your summer and fall collection before winter is coming. If you want to increase your sales of your inventory, try to get maximum exposure by spending more money on advertisements that boost promotions and sales events. This could be your last chance to sell your final inventory before it gets out of date and irrelevant for the upcoming season.

Finally

No matter if you’re a retailer, an independent contractor or small business owner, it makes sense for you to start planning your advertising budget and spend more money on your advertising in the months of October, November and December. Don’t be afraid to spend more money during the holiday season. Increasing your advertising costs will compensate with the increases in sales during the shopping period. In the end, it will help you to compete with your rivals, to follow consumer shopping trends and to make the most out of your advertising strategy for the upcoming season. But keep in mind that spending more doesn’t necessarily mean better results or more sales. Instead, you need to spend money more strategically. Via our platform and our smart algorithms we can help you to automatically optimise your campaigns. This way, you can get more sales and leads while keeping costs down. Go ahead and try our platform for free.

What will you be doing this holiday season to increase your sales? What social advertising approaches do you take? Let us know in the comment section below.

 

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