This is a crazy time for advertising and every company out there is vying for everyone’s attention - what is your feeling on what kind of effect this has on consumers?
[Markus] In my opinion it’s also very important that you really think about the customer’s needs - you really think about what is actually driving your customers to purchase your products, because everybody has a different reason for it. For some people it might be that you offer free shipping, for others it might be the quality of your products, whereas for others it might be the price. Therefore you also need to address this in your creatives so that you create somewhat personalized creatives. And use the tools that we are already very much used to from Facebook with the dynamic ads, that also are getting more and more popular on other platforms, so that you really show the creatives and assets to the users that they actually would like to see.
But it’s also, of course, very difficult to balance that because on the one hand people want to have very personalized ads, but on the other hand maybe some people get scared because it’s too personalized. So it’s very important to also keep this in mind, that your ads are not too personalized, but you rather keep in mind why they purchase your product. And then make sure to have different creatives running at the same time [with each of these different “purchase drivers”] and let the algorithms do their work because they’re getting smarter and smarter and you can also benefit from that.
What’s the best time to start advertising or “priming” your audience for this season to get them to come to you instead of your competitors?
[Markus] I think the best time is already now because we are very much into Q4 already. And because the competition is so high you shouldn’t be going into cold audiences that much when it comes to Black Friday campaigns themselves since the CPMs will be rising a lot. Therefore, it might be better just to focus on your middle-funnel audiences, so that means the people that have already interacted with you -- maybe just focusing on these ones because they’re much more profitable and more open to your promotion as well.
So I think it’s a good time now to prime your audiences and really catch them and put them into your retargeting audiences, and then you can focus on them when it comes to Black Friday itself.
You work with some of the largest advertisers in the world. In your experience which channels should advertisers be focusing on right now?
[Markus] As we are in the paid social universe, I can of course talk the most about paid social, but I think it’s always a combination of channels. Because when you think about the different platforms that you’re advertising on every channel has its own use - people are using Facebook for different reasons than people might be using Snapchat, or Pinterest, or TikTok - so therefore you also need to consider in which situations your customers are using those platforms.
For example, Facebook and Instagram are mostly about browsing and scrolling the news feed, whereas on Pinterest people are actively searching for inspiration for a certain topic - therefore, the users are in a totally different situation and I can also provide different content to attract them to my website. On Pinterest it might be a bit more inspirational content and focused much more on the upper funnel, whereas on Facebook and Instagram it’s very well suited for direct response advertising.
So keep this in mind, and that it’s always a combination of the channels that play into it. So just having the right mix.
Do you have any recommendations on techniques they can use to make their ads stand out?
[Karolyn] I think the first thing that brands should do before thinking about the execution or techniques would be to have a solid message. So having a clear message that they want to put out there. And then focusing on having highly visual content regardless of if it’s in video format or a static format. This is because we only have a few seconds to catch the attention of people out there as they are being bombarded with tons of ads everywhere. Also taking into account the best practices of each platform, they can vary a bit. And lastly, I would say thinking about how the ads are consumed. Meaning we need to be mobile first because most of them are consumed via mobile.
Those would be the general recommendations, but we are also seeing that sound is becoming more and more important. People are, nowadays, listening to content with sound more often than before, for example, in placements like the story that are fully immersive. So this is also good to keep in mind - you should have ads that transmit your message with or without sound, but keeping into account that some people listen to them with sound on.
And instead of recommending a specific format to try out, I would say that finding a way to combine video and static, and also adding the right placements to have a good mix so you can have a good reach. This is because people tend to engage differently with different placements - some people engage a lot with stories and other people might feel more inspired by a collection ad or something different. So the main recommendation would be thinking about the steps of the funnel and how your ads and each placement you choose feed leads into there.
What can advertisers expect for CPCs/CPMs on these channels during this time and do you have any recommendations on how to adjust budgets to ensure you’re not overspending and having a healthy ROAS?
[Markus] That’s a kind of question that we usually get from our customers. I think this year is, of course, a bit different and also difficult to forecast because of the current situation with the pandemic going on. In general, what we saw from past years is that there is a huge increase in cost on Black Friday itself, but also in the days before you can already see a slow increase in the CPMs. Therefore, make sure that budgets are high enough so that you can really compete with your budgets and not run into any delivery issues. Because Facebook is always estimating a CPA based on CPM, then also based on your conversion rate and your engagement rate - so there are a lot of different factors playing into the actual estimation of the CPA. And if the CPMs are then higher than usual, then conversion rates also need to be higher, engagement rates need to be higher, but usually on Black Friday this is already the case.
So I think it’s really important that you set your budgets high enough so that you don’t run into any issues that might cause you to lose out on performance or on revenue. Maybe also consider switching to bid-caps because this can help you with not running into delivery issues. But of course, not changing it on the day so that the algorithm has time to adjust to the new situation.
You guys have this interesting idea about Q5 - can you talk a little bit about what Q5 is and why it’s an important part of an e-commerce strategy?
[Markus] Q5 is a very interesting concept because it’s the time between Christmas and mid-January, and why it’s so interesting is because CPMs are much lower because there is not that much more competition compared to the pre-holidays. So I think here is where we can benefit from lower CPMs. And also people are still in a purchasing mood because they’ve received a voucher or they would still like to self-gift themselves, and therefore we can definitely address this audience as well.
But then we have to make sure we’re considering the types audiences just before Christmas, because now we have all the data from the gifters - so that means people who purchased products to give them to other people. So now we have this data so we can maybe also leverage it, but we, of course, need to address it in a different way and not just by giving out our message as usual. We need to consider that these people [the gifters] are not in our actual target audience, but we can maybe follow the path and think about ways to get them to purchase something for others again, or maybe we can convince them that they also need to purchase our products for themselves. We have a case study on our website with Third Love about how they’ve leveraged this specific time frame very well.
And this time might be great if you still want to leverage Christmas shoppers but you don’t have that much of a budget - this might be the time for you to spend some of your budget [but not have to compete with the same CPMs as during the peak season].