• Gabrielle Gillespie

Ho, Ho, Ho - Hold Up! Why Are My Ad Costs So High?

Chestnuts may be roasting on an open fire, sleigh bells may be jingling, and the snow may be glistening. However, it is certainly NOT the most wonderful time of the year for some online advertisers.

Why? Because ad prices are known to skyrocket during holiday season. No, really… Worldwide spend on social media advertising was up 50.3% at the peak of the 2020 holiday season compared with the same period the year prior, according to the latest quarterly report based on Socialbakers' platform data. Holy tinsel!

So, why on earth does it get so expensive? Well, a couple of reasons:

1) Increased Competition

When are consumers most likely to buy? Holiday season. And how are they shopping? Online! So, like any good marketer or advertiser, your competition wants to appear when your target audience is most likely to purchase, and where your audience is likely to be. And, as mentioned, social media is the most popular way for small and medium-sized businesses to advertise during the holiday season, per a survey by location-based marketing firm Reveal Mobile. In fact, the study found that more than a third (36.4%) of advertisers will allocate the majority of their holiday ad budgets to social media, followed by email marketing (15.2%), TV (14.7%) and print (14%).

In other words, you’re competing with a ton of brands, both big and small, in the most highly competitive time and space.

2) Higher CPC (Cost-Per-Click)

More competition means that you’ll inevitably be paying more per click. Let’s face it: Google, Facebook, Twitter, YouTube, SnapChat, and other platforms are in the business of profit. They want to capitalize on the holidays just like you do. With the increased demand for ad space, it’s only natural that the bidding war begins. So get ready to pay more per click!

But, there’s something crucial to consider!

Despite the increase in competition and investment, the holidays are a great opportunity to maximize on the best buying season of the year. Sure, advertising costs are bound to increase, but ROAS will as well. Marketer Neil Patel found that ad impressions typically increase 50% during the holiday season. Click-through rates rise 100%, direct traffic increases 150%, the average order value grows by 30%, and conversion rates go up 60%. Now THAT is a winter wonderland!

So, now you know why it’s more expensive but you’re still eager and ready to compete with the big brands to get those results. If you aren’t sure where to start or how to optimize your ads for the season, deep breaths!

We’ve got some tips: