Prepare for a strong holiday season with actionable tips based on insights from past e-commerce trends and consumer behaviours.

My first day working at my company was Cyber Monday. Everyone welcomed me warmly, expressing how busy they were, as I observed the flurry of activity. Rolling my office chair from desk to desk, I listened in on calls and learnt what Cyber Monday meant for e-commerce.

As the 2024 holiday season approaches, I’m reminded of this experience and think about the new marketers who will face the trial by fire from Black Friday to Cyber Monday.

Whether it’s your first holiday season or your 20th, this post will help you achieve the best results for your business or clients. Let’s examine the holiday e-commerce season through three lenses: the consumer, the publisher, and the marketer.

The Consumer

Inflation has heavily influenced this year’s economic outlook. On September 18, U.S. Federal Reserve Chairman Jerome Powell announced a half-percentage point cut in interest rates, the first since the COVID-19 pandemic. This rate cut is expected to lower interest rates for consumer loans and other financial products, which will help maintain a strong job market.

These positive developments should also drive consumer spending. As the graph shows, e-commerce retail sales have steadily grown, even as total retail has flattened. Businesses with a robust online presence will be well-positioned to realise substantial wins this holiday season.

According to the University of Michigan Consumer Sentiment Survey for 2024, while consumer sentiment has fluctuated, there is growing confidence among consumers who are willing to spend money online again after a slump in 2022. This indicates that digital marketers must prepare for increased budgets and flexibility to capture demand as it arrives.

What will consumers be looking for this holiday season? A recent holiday marketing playbook released by Microsoft highlights four key consumer preferences:

• 16% increase in buy now, pay later financing.

• 23% increase in expedited shipping.

• 7% increase in free return and exchange policies.

• 24% increase in “freebies” as incentives to complete purchases.

Businesses should pay particular attention to expedited shipping. With Thanksgiving arriving later this year, there are five fewer days than usual to ship gifts before Christmas. As a result, last-minute shoppers will need assurance that gifts can be delivered on time.

The Publisher

Next, let’s consider the publisher’s perspective, starting with Microsoft Ads. The previously mentioned playbook indicates that search volumes will climb significantly in October, rather than waiting until December. This shows that consumers are beginning their holiday research earlier than in previous years.

Data also reveals that cost-per-click (CPC) growth peaks in November. While I recommend focusing on revenue rather than clicks when planning budgets, this data highlights a potential disconnect between consumer behaviour and digital marketers’ ad-buying strategies.

Search Volume, Clicks, and CPCs

According to Google’s 2024 quarterly reports, paid clicks and CPC growth have been relatively healthy, with no signs of a reversal anytime soon. Google Ads data shows an expected 8% increase in paid clicks for Q4, alongside a 10% year-over-year increase in CPC prices. This could lead to top-line growth but also margin losses if conversion rates (CVR) or average order values (AOV) remain steady.

But how reliable is Google’s data? Two points reinforce its validity. Firstly, our agency’s own data shows similar CPC trends. Secondly, Facebook’s metrics also indicate a rebound in ad prices, suggesting that marketers are investing more in both platforms to chase growing consumer demand.

With this data, we can expect strong consumer demand in the upcoming holiday season, leading to increased ad inventory and rising ad prices for publishers.

The Marketer

From a macro perspective, marketers should do what they do best—crush it. To help solidify your approach and avoid any pitfalls, here are some essential tips:

✓ If you’re using Broad Match, Search Partners, Dynamic Search Ads (DSAs), or Performance Max campaigns, review their performance during last year’s holidays. If you don’t have that data, refer to past sales events.

✓ Be cautious with campaigns run by AI; they can become too loose with increased budgets or aggressive targets. Ensure your negative keyword (NKW) lists are robust and monitor closely after making any adjustments.

✓ Avoid being lured by “Black Friday Deals” keywords unless you have dedicated squeeze pages or offerings to accommodate those broad searches; otherwise, users are likely to bounce.

✓ If your campaign is marked as “limited by budget,” consider re-evaluating; you risk losing high-value clicks to competitors.

✓ It’s a common practise but always say “no” to display expansion.

✓ Each day in this condensed shopping window is crucial, so ensure that budget phasing reflects this urgency.

✓ Follow the “Batman” approach: a well-managed account should look like this by the end of the quarter: Can you see him? The little Batman? This strategy means that costs should align with revenue.

Stick to this method even if publishers try to convince you that early spending is vital for getting into the consideration window. Their motive is often to drive up ad premiums during lower ROI times. Stay strong for the benefit of your business and clients.

Make It a Winning Season

As a fan of the “Game of Thrones” series, I’m reminded of Lord Ned Stark’s words: “Winter is coming.” The e-commerce landscape is poised for a strong 2024 holiday season. Ensure your budgets are uncapped, targets are appropriate, NKW lists are strong, and then just ride the wave.