Do we see a “rerun” of last year’s holiday digital advertising performance? Or will marketers not be as merry as the shortage of advertising cookies and tracking limitations continue to hamper ROAS. With linear eyes moving to CTV screens and IDFA changes, advertisers may double down on their YouTube advertising budget to compensate for ROAS declines in other channels.
The advertising industry took a whipping from the pandemic last year, slashing a 5.2% decline YoY during Q2 as brands halted ongoing campaigns. However, it did not take long for advertisers to bounce back as they closed with 12% and 29% increases in spending, Q3, and Q4, respectively. Although US digital ad spending suffered mid-year shrinkage, 2020 ended with a 12% YoY increase, $139.8 billion in revenue. This year, Dentsu projected a more positive outcome, 13.7% growth, and might outrebounded last year’s performance.
Peak of the Season, Peak of the Competition
As everyone turns their calendars to October, hundreds of holiday-themed ads start to arrive on consumers’ screens, targeting early Christmas shoppers watching YouTube product reviews. Based on a Statista.com survey, 38% of Christmas shoppers begin to check out their carts before November.
Looking at the last three years’ data from 2018-2020, month-to-month YouTube Holiday advertising CPV increased at an average of 10.79% during October, 15.70% in November, and 30.12% throughout the festive month of December. By knowing these data, advertisers can plan early on their digital advertising effort and spread the cost throughout the campaign period.
CTV Advertising: The Power of Co-Viewing During Holidays
The pandemic has stepped on the pedal in Connected TV growth, and there’s no sign of slowing down. Mediapost reported, last August 2021, TDG found that 85% of broadband households use a CTV. In addition, six out of ten Connected TV users watch Advertising-based Video on Demand platforms.
Looking at Campaign Lab data, Strike Social proprietary tool, Fraction of Views from mobile continue to take a considerable share of the advertising spends. In 2019, spending allotment on mobile saw a 12% jump from the previous year. However, the shift in the behavior of digital consumers created by the pandemic skewed the ad budget to CTV. As a result, desktop, Tablet, and Mobile devices ad spending allocation slowed down by 5%, 7%, and 10% each.
The transformation of “me” to “we” of video consumers is evident as eyeballs deviate from a small device to a bigger screen. As a result, the Fraction of View for Connected TV has seen a massive surge of 31% from 2018-2020. Additionally, consuming video content on CTV creates a whole new opportunity for advertisers as Nielsen stated that 47% of co-viewing happens with families and friends.
Seize The Holiday Opportunities
Strike Social perspective for 2021 Q4 will behave similarly to 2019. As clients move advertising money late this year, advertisers allocate budgets to platforms that absorb additional investment. As brands flocks to grab audience attention, this creates a rise in the auction. Therefore, the team anticipates Q4 CPVs to be 10%-15% higher than Q3 and potentially increase by December.
In addition, holiday advertising campaigns should consider co-viewing audiences. Research conducted by the Video Advertising Bureau shows that 71% of advertisements displayed to co-viewers generate a substantial emotional response compared to 37% of single viewers. At the same time, streaming video content has been a communal activity since the pandemic.
The learning from the previous holiday season creates adaptability and agility in the marketing strategy. But to further leverage the success, analyzing and understanding the data will create a higher probability of attaining campaign objectives.
