As the e-commerce world readies itself for the last push of 2017, in-house teams and agency partners alike will be finishing up their final rounds of Cyber Weekend number crunching.
With figures now emerging, everything points towards 2017 being another bumper year. Black Friday sales up. Cyber Monday sales up. People are both buying and spending more, and perhaps most encouragingly for our sector, an increasing proportion are doing so online.
From above, everything appears rosy. However, what happens when we delve deeper?
Whilst it’s clear that the four-day period is now a critical part of any online retailer’s success, it has equally grown to become a key indicator of how a business will perform over the Christmas period. Consequently, marketers now operate under the dual stress of trying to ensure their brand is ahead of the Cyber Weekend curve, with the additional weight of knowing that results will also forecast their festive bottom line.
We’ve arrived at a point where the importance of this purchasing phenomenon for many has become utterly absolute. So established and entrenched is it in our promotional calendar that advertisers simply cannot afford to get it wrong.
Challenging questions will already be starting to form in preparation for 2018. With more retailers than ever participating in some element of promotional activity, how do you address the competition? As an ever-growing number of channels and devices enter the marketing mix, how can you continue to maximize revenue from your budgets without overspending? What insights can be gleaned from 2017 to ensure you can almost guarantee the same level of performance in the years beyond, without cutting deeper into your margins?
We can’t give you the answers; every business is different, as are the initiatives that will work best. What we can offer however is a fresh perspective on how to tackle these problems by showing you three ways in which we addressed them with our clients.
And the key? Detail. We’re utterly obsessed with it. Not only because an immersion into the ‘nitty gritty’ leads to the best results, but it’s actually linked to the way we are paid as an agency. We’re only rewarded once we drive a sale, and for that very reason, we need to do everything we can to seek out conversions.
So, let’s take the age-old saying of ‘don’t sweat the small stuff’, and turn it on its head.
Study your audience closely
Any strong marketing strategy relies on a solid understanding of the audience your product or service attracts, as well as the levers that drive them.
Whilst Cyber Weekend will attract your core audience, you also need to be watchful of how the gifting season influences the makeup of your customer base.
With a sports retail client of ours, last year we noticed a shift in the demographics of converting users. The audience became more female in its breakdown (Fig. 1.1), and also swung towards older generations (Fig. 1.2) – not the characteristics typically expected when it comes to sports merchandise.
Looking at additional data, we also noticed a greater proportion of sales coming from people in a relationship or two-person households (Figs. 1.3 & 1.4).
By putting all these pieces together, it became clear that women buying gifts for their partners was a significant customer segment to focus on. From these learnings, we created a campaign with tailored messaging and bidding strategies for the 2017 Cyber Weekend and Christmas period.
The next step is to look at how much a conversion costs you from each consumer group. Whilst the bulk of your revenue may be coming from a certain demographic (perceived to be your core audience), this may be because most of your advertising is directed at this audience.
For example, when we look at the consumer age range for a fashion retail client of ours the majority of their revenue came from 18-24 and 25-34-year-olds. As a result, their brand and messaging were geared towards these age groups, as were their rather expensively assembled Paid Search campaigns.
When we took over their accounts, however, we learnt that over the course of the year the most cost-effective age groups to target were the ‘middle-aged’ brackets (Fig. 2.1). Bid multipliers were applied to our activity, which greatly improved results.
Once we entered Cyber Weekend, however, an interesting shift occurred. Firstly, we witnessed a significant improvement in revenue-per-click performance from 18-24-year-olds, along with an uplift for 65+ users (Fig. 2.2).
Fig. 2.3 highlights the scale of this change. Rather than sticking with the same bid multipliers, we needed to respond quickly to reflect the behavioural changes. As a result, the negative bid multipliers placed on 18-24-year-olds were reduced, and the positive multipliers were increased even higher for the 65+ audience.
Understanding your audience is key, and when it comes to your audience over promotional periods, always keep a close eye on two things: how the breakdown of your audience changes, and how this impacts the way in which you should spend your money.
Pick the moments to push
It’s Thursday evening. Campaigns have been prepared, budgets have been allocated, and Digital Marketing Managers across the land can rest easy until it’s time for those Tuesday morning reports.
Unfortunately, we all know it doesn’t quite work like that. It instead involves keeping a close eye on how much money those preciously apportioned pounds/dollars are earning you.
Even during this most promotional of promotional periods, there are still moments to pull back on advertising, and equally, moments to push. Spending as much as you can as evenly as you can over the entire four days is a one-way street to overspending, under-delivering and sleepless nights.
Something we closely monitor with all of our clients is at what point users show the highest propensity to purchase. These insights are recorded and utilised the following year.
So rather than sitting there fretting, why not monitor your own purchasing trends to see when the best times would be to maximize spending?
A trend that we’ve really seen come to the surface in 2017 is what we have called the ‘pyjama panic buy’. As you can see in Fig. 3.1, at 11 pm each night, we witnessed a spike in ROAS from our campaigns. Unaware of when offers end, consumers have a tendency to purchase late at night (around 11 pm) in the fear that the discount will have vanished by the time they wake up.
With retailers extending promotions across the weekend and beyond, the process repeats itself each evening. What’s more, by this point in the day a portion of your competition will have undoubtedly reached their daily spend caps too.
Save your pennies in the morning, and push them later when it really matters.
Being the best at the bottom
With Cyber Weekend becoming an ever more permanent part of our collective consciousness, the number of people directly seeking out offers (rather than waiting for them to magically appear) continues to grow.
Analysing Google Trend data from 2017 in comparison to 2016, Fig. 4.1 demonstrates the year-on-year growth of Black Friday related search terms. Not only did we see a general uplift over the four day weekend itself, but we also saw growth in interest in the weeks leading up to the 24th.
What this tells us is that consumers are more proactively researching which brands will be offering discounts, and what those discounts look like – all before Cyber Weekend kicks off. We can, therefore, make the solid assumption that more and more people are entering the period with a pre-conceived idea of what they’re in the market for.
Pull channels as a result become even more of a race to the bottom. Whilst branding during the research phases is clearly an important exercise, advertisers should be questioning more than ever how they can get in front of the user at that final point of purchase.
One way in which we managed this was by capitalising on the uplift in volumes around Black Friday based terms. Our proprietary Google Shopping technology gives us the ability to target keywords of interest through our performance-based model. In doing so, we ensured our client dominated the space at this crucial stage. This could come in the form of specific products they stocked, or even brands that they resold (Fig. 4.2).
Every single day our platform dynamically pulled out the key terms based on recent data and adapted campaign structures to prioritise the products that drove the best performance.
When assessing the development of Cyber Weekend as a force within the online world, it’s clear that its claws are firmly planted within our promotional calendars.
What comes with this mass awareness is mass competition, with businesses of every shape and size entering the market in an attempt to take advantage of the buying frenzy.
For Digital Marketers, the path to success is becoming ever more complex. Which channels do I use? What offers do I push? Which products will become best sellers? How do I keep an eye on margins?
The answer? Narrow your focus. Ignore the dizzying lights of all that volume, and focus on the detail. From there, your efforts can grow.
Get your hands dirty. Get creative. Get granular.