Unboxing Holiday Trends & Insights for Digital Advertisers in 2023

Hello and welcome to the Simpli.fi webinar series. I’m Ann Kraus. Thanks for joining us each month for industry news, interviews, product rollouts and training on all things related to targeted advertising and connected TV. The Simpli.fi webinar series is available on demand with new episodes posted each month at simpli.fi/webinars along with all of our previously recorded episodes. It's October 2023, and in this month’s webinar we are talking about the Holidays. It may seem early, but consumers are interested in shopping prior to November. In this session, we will be sharing valuable insights, including platform-level data, emerging buying trends, and industry reports. Our aim is to empower you and your advertisers with the information needed to make informed decisions and plan effectively for the holiday season. We will explore this topic from four distinct perspectives: First: the Timing: While the holiday season may seem to start earlier each year, this trend has been quietly gaining momentum for a couple of years. We'll dig into why this shift is happening. Next: The Dominance of Online Shopping: With the rise of online shopping during the holidays, it's crucial to understand how this impacts early buying and what retailers should do to prepare. Then new will dive into The Data: We will examine conversion rates from 2022 on the Simpli.fi platform to identify successful strategies that can guide your advertising strategy. And finally, we’ll share some Return Po Let’s begin with the timing. While people moan and groan (and you know who you are) about how early the holiday season starts in many retailer stores, most consumers are quite interested in buying in October, or even earlier. Last year's unprecedented early start to holiday shopping has set the stage for consumers to anticipate a similar trend this year. According to the National Retail Federation, 60% of consumers started their holiday shopping before November last year. Source: https://blogs.oracle.com/marketingcloud/post/holiday-marketing-predictions-what-to-expect-this-year Consumers still remember the Pandemic-related shortages and delivery delays of the past couple of years, and that has only reinforced early gift buying. Combine that with the economic instability that has marked the past few years and you have holiday shoppers that are concerned about low inventory, raised prices, and delayed shipping. What’s the benefit of starting early? Well, starting early allows shoppers to not only lockdown hard-to-find gifts but also spread their holiday budget over several months. In fact, last year, the average holiday shopper had already completed 21% of their gift purchases a few weeks before Halloween. Source https://www.thinkwithgoogle.com/consumer-insights/consumer-journey/holiday-consumer-engagement/ What does that mean for advertisers? Well, it underscores the importance or reaching relevant audiences at right times. Retailers must be prepared to capture early attention and adopt an "always on" marketing approach. Maintaining a year-round presence keeps your brand, policies, and deals fresh in the minds of consumers. Our advice to advertisers is clear: start earlier than last year. In fact, start now. Recent surveys of US consumers indicate that 50% of shoppers intend to begin their holiday shopping no later than October, with 26% planning to skip Black Friday altogether. This shift in shopping behavior is notable, with Gen X and millennial shoppers starting as early as September and October. Source https://kortx.io/news/holiday-shopping-trends/#:~:text=Start%20earlier%20than%20last%20year.&text=According%20to%20a%20recent%20survey,early%20as%20September%20and%20October. And eMarketer forecasts that overall retail spending will increase 4.5% to $1.3 trillion for the 2023 holiday season, with ecommerce accounting for almost 20% of sales and contributing 48.5% of incremental spending gains. Source: https://www.insiderintelligence.com/content/holiday-2023-marketing-strategies-should-adapt-value-oriented-environment However, retailers are preparing for inflation-induced cost-cutting measures this year. Many are reducing inventory and ordering fewer high-end products. Additionally, a significant majority (67%) of retailers anticipate needing deep discounts to attract holiday shoppers. Source https://www.wordstream.com/blog/ws/2023/08/29/holiday-marketing-trends Let’s talk about this early shopper and what they are looking for. According to eMarketer, discounted prices motivated 65% of respondents to buy earlier, and 26% appear scarred by last year’s supply chain issues as they plan to start early to make sure desired items are available. So, retailers that are looking for great sales in Q4 and the holidays in particular, need to aggressively price their products, and then make sure the consumers are aware. Source: https://www.insiderintelligence.com/content/half-of-consumers-plan-start-their-holiday-shopping-before-november Here at Simpli.fi, we observed that shopping-related advertisers increased their holiday shopping spending on our platform six weeks earlier in 2022 compared to 2021. Agencies should leverage Simpli.fi to communicate the availability of early-season bargains, as this aligns with the prevailing trend. In 2021, advertisers began capitalizing on the holiday shopping season around mid-October. Last year, this acceleration occurred right after Labor Day—a total of six weeks earlier year-over-year. We anticipate this trend will persist, which means agencies must be prepared for heightened competition in the programmatic marketplace. To prepare for this, be sure your retailers and advertisers are optimizing their website for a good user experience and data intake, and then leveraging that data and customer lists to make a big impact during the holidays. Let’s move to the dominance of on-line shopping during the holiday season. The popularity of online holiday sales continues to grow, surpassing in-store shopping. Advertisers must be equipped with the right ads and messaging to cater to this trend. Since the pandemic, we at Simpli.fi have seen an accelerated shift toward e-commerce and online shopping. Despite a rebound for brick-and-mortar stores, we’re still seeing a massive shift take place. And we fully expect that to continue in 2023. Last year, on 2 of the biggest online shopping days of the year, Simpli.fi was ready to handle the uptick in spend, and provided insights their advertisers could use throughout the year. For instance, in 2022, consumers spent a record $9.12 billion while online shopping last Black Friday. Here at Simpli.fi, we can report that holiday shopping campaigns for Black Friday on our platform drove 5 times more online conversions compared to foot traffic conversions. Source: https://www.reuters.com/business/retail-consumer/adobe-says-black-friday-online-sales-hit-record-9-bln-2022-11-26/#:~:text=Nov%2026%20(Reuters)%20%2D%20U.S.,Friday%2C%20Adobe%20Inc's%20(ADBE. 2022’s Cyber Monday also made history as the largest retail e-commerce sales day in U.S. history, with consumers spending $11.3 billion online—an impressive 5.8% increase over the previous year. After Cyber Monday, a noteworthy 64% of holiday shopping campaigns on the Simpli.fi platform focused on driving online conversions until Christmas. Source: https://www.practicalecommerce.com/sales-report-2022-thanksgiving-black-friday-cyber-monday#:~:text=Adobe%20Analytics%20stated%20U.S.%20Cyber,year's%20Black%20Friday%20online%20sales. Even with the strong online sales growth, there’s still strong demand for in-store shopping, mainly driven by the ability to buy online and pick up in-store. Advertisers should prepare to use online advertising strategies–including engaging ad formats such as native advertising–to reach the massive majority of shoppers researching online in the consideration phase and/or making online purchases. Native advertising, in particular, has proven highly effective, offering better performance than traditional display ads because they seamlessly blend with the publisher's content and design. It's worth noting that native advertising is projected to reach $400 billion by 2025, making this holiday season an ideal time to incorporate it into your advertising strategy. Native ads also boast a six times higher response rate compared to traditional display ads. At Simpli.fi, we stand ready to provide creative guidelines to help your advertisers maximize the potential of this emerging format. Feel free to reach out if you need guidance on imagery or copy points for various business sectors this holiday season, including retail, home, and technology. That brings us to our third point- letting the data tell the story. As a leading digital advertising platform, Simpli.fi collaborates with over 2,000 agencies, brands, and media-buying organizations. In 2022, holiday shopping campaigns on the Simpli.fi platform harnessed data-driven targeting methods to engage consumers effectively. During Q4, there was a remarkable 49.7% increase in holiday shopping advertisers utilizing addressable geo-fencing, which leverages household-level targeting based on over 3000 location and demographic factors. Advertisers are also focusing on utilizing connected TV advertising to reach relevant audiences with this popular format. In 2022, Simpli.fi witnessed a substantial 178.5% increase in CTV spending for holiday shopping campaigns from the third quarter to the fourth quarter. We anticipate this trend will continue, especially with the recent launch of ZTV, our proprietary zip-code targeted CTV solution, offering both audience-level and inventory-focused connected TV advertising at a competitive starting CPM of $10-12. According to eMarketer, 95% of marketers reported that CTV achieved their desired key performance indicators. So, it's evident that advertisers should consider CTV advertising to ensure their ads reach a receptive audience. This year, we expect advertisers to continue relying on data-driven tactics to achieve their goals. Advertisers will prioritize advertising platforms that can provide return on ad spend (ROAS) metrics for their campaigns. In the past year, Simpli.fi ran more than 530,000 campaigns on its platform tracking cart value metrics online. In Q4 alone last year, an additional 27.4% of Simpli.fi's holiday shopping advertisers relied on cart value and ROAS metrics to demonstrate results. Moreover, spending on advertising during the holiday shopping season while tracking these data-driven metrics increased by an impressive 104% from the previous quarter. That tells us that a large number of online advertisers are dedicating large portions of their advertising budgets to solutions that will help prove not only campaign success but actual results that impact a company’s revenue. That brings us to our fourth point: Some best practices to keep in mind for holiday advertising this year. Enterprise retailers need to respond to the industry shift of the last 2 years by embracing an omnichannel strategy — one that seamlessly bridges the gap between online and offline channels. Purchasing decisions and follow-through are no longer confined to a single platform. Let me explain. Buying online, picking up in store, and return policies are all big drivers of whether or not an online purchase goes through. In 2022’s holiday shopping season, returns increased by 12%. According to Salesforce, your advertisers return policy should be clear, easy and reasonable. In fact, they predict that a poor returns experiences "will put 21% of online orders at risk.” Retailers need to ask themselves: Is our return policy clear, easy, and reasonable? Source: https://www.salesforce.com/au/blog/holiday-shopping-predictions/ Clear: 93% of shoppers research a brand or retailer’s return policy before making a purchase. Make sure this is easy to find. Easy: 81% of shoppers have stopped buying from a retailer after one bad returns experience. Keep your policy clear and include all the possibilities that could come your way. Reasonable: 78% of shoppers have abandoned a shopping cart if free returns weren’t available; 30% say getting a refund instead of store credit influenced where and when they purchased. Source: https://www.salesforce.com/au/blog/holiday-shopping-predictions/ Let’s not forget that price remains a pivotal factor during the holidays, with 69% of shoppers identifying it as the top influencer in their purchasing decisions. This surpasses considerations like quality and convenience. In fact, competitive prices can lure shoppers to new brands or stores, with 80% stating that pricing would motivate them to explore different options. Additionally, 59% indicated that better prices would encourage them to shop at unexpected locations. Source: https://www.insiderintelligence.com/content/half-of-consumers-plan-start-their-holiday-shopping-before-november Consider these campaign options: Utilize Simpli.fi's CTV offerings to engage viewers with commercials highlighting early holiday pricing discounts. Subsequently, retarget those who have seen the CTV commercials with display ads emphasizing free shipping and returns. This combined approach not only reduces the (CPM) but also reinforces critical touchpoints like return policies and pricing. Suppose your aim is to reach sports enthusiasts. With ZTV, you can target zip codes where residents have a higher inclination to view sports content. Showcase the option for online ordering with in-store pickup in your commercial. By providing ads across all display sizes, including mobile, you can serve ads on other devices within the household through cross-device matching. And if a customer’s mobile device is detected in the store, we can report foot traffic conversions, even if the user was not there for an order pickup. Consider leveraging native ads to highlight the latest technology trends for gifting. These ads blend seamlessly with the content and design of the publisher's website, offering a non-disruptive user experience. You can use native ads in conjunction with traditional display ads or CTV, along with our wide range of targeting options. So- there you have it. People are shopping earlier than ever, and retailers need to be ready with competitive pricing. With the extension of the holiday shopping into October, agencies need to be aware that the bidding on certain inventory will become more competitive. Agencies should really look for a DSP partner that can provide data driven metrics like the cart value for ecommerce and ROAS. Finally, make sure your creatives reflect the pricing and convenience that shoppers are looking for. Thanks for joining us today. If you have questions about Simpli.fi’s offerings, please reach out to your Simpli.fi account manager or send an email to hi@simpli.fi. We look forward to seeing you next month.