How Retailers Are Spending Holiday Ad Budgets

Halloween may still be over a week away, but retailers already have the winter holiday shopping season on their minds. In fact, almost three-quarters of retailers believe the holiday season begins by Nov. 1.

Much planning and preparation goes into making the sink-or-swim holiday season as profitable as possible for retailers. Consider that 19 percent of companies with 500 or more employees begin their holiday planning in July or earlier.

Kenshoo, a provider of agile marketing technology, teamed with OrionCKB, a direct response marketing agency, for the “2016 Holiday Advertising Survey Report.” The survey polled some of the top e-commerce and retail advertisers on their holiday ad spend plans.

How do you stack up against other retailers when it comes to holiday advertising? Here are the top three takeaways from the report.

Mobile
eMarketer forecasts that holiday e-commerce sales will grow by more than 17 percent in the U.S. in 2016, and mobile will drive the majority of that growth. However, the Holiday Advertising Survey found that more than half of respondents said mobile app install and engagement ads were less important to their strategy this year.

“While mobile e-commerce is being perfected, we think marketers might believe their money is better spent in improving the checkout experience,“ explains Saadi Muslu, Kenshoo’s product marketing manager.

Social Media
Most companies surveyed have separate budgets for search and social media, but both are important to the holiday marketing mix. Let’ start with social.

A whopping 71 percent of marketers said they'll be increasing their Facebook ad spend from last year. More than half of the companies also said their Instagram spend is greater this year over last. Although Instagram only makes up about 10 percent of social ad spend for the brands surveyed, it’s seen as the next platform where companies should be increasing spending.

Interestingly, the only social media platform that saw a large number of companies decreasing budget allocation for was Twitter. Almost a quarter of companies surveyed said they will spend less on Twitter this year, and the majority of others said their spending on the social network will remain unchanged.

Search
Companies of all sizes are spending more on search — in particular on Google.

“As far as ad types go, the two most important to marketers are on Google,” says Muslu. “Search keyword ads are the most important ad type for 74 percent of those surveyed, and Product Listing Ads for 61percent of those surveyed.”

Google accounts for 68 percent of the spend within retailers’ search budgets, and 62 percent of companies said this is an increase over last year. However, it’s primarily increasing for small and midsized companies. Of the large companies surveyed, only 9 percent said they're increasing their year-over-year spend on Google.

Focusing on multiple marketing channels, particularly mobile, social media and search, when planning holiday advertising budgets can help drive consumers to your website and brick-and-mortar stores.

“The real key to success is diversification, investing in both search and social and in a variety of ad types in order to best engage holiday shoppers across channels, wherever they spend their time,” says Muslu.