• by Sarah Engel , Op-Ed Contributor, October 18, 2022

When rising levels of inflation and ongoing supply chain issues are affecting the likes of Nike, Target and VF Corp., you know that shareholders’ spotlight is shining even brighter on Q4’s peak selling season. 

In fact, 44% of holiday shoppers say it’s better to purchase gifts and other seasonal items in October, because they believe inflation will continue to impact prices later in the year according to a recent NRF survey. Capturing this consumer’s holiday-spirit-fueled attention now is more important than ever, but with rising advertising costs, shifting digital behaviors and increasing privacy limitations, it is also more difficult than ever. 

Best way to stay where you are? Do exactly what you are already doing. 

In our current media landscape, doing the same thing will no doubt drive less success than in holidays past. The reality is that ad costs are continuing to increase and what worked in terms of reaching and converting shoppers pre-Covid simply is not as effective or affordable. 

With Meta’s CPM increasing by 61% YoY, TikTok’s increasing 185% YoY and Google’s programmatic display CPMs increasing by 75% YOY, diversifying your media mix continues to be a crucial strategy advertisers need to implement to offset rising costs. 

Put simply, if you are following best practices, but exclusively spending on Meta and Google, you’re likely in a race to outspend the other advertisers on Meta and Google leaving you with diminishing reach and returns. If you can expand your plans to include TikTok, Pinterest, Snapchat, YouTube, OLV, CTV, audio, or other diverse channels, you can build a strategy that separates you from your competitive set. With tight marketing budgets, throwing more advertising dollars at legacy digital channels to ride the coattails of an algorithm is no longer an option. It is critical to set aside a portion of your budget to test and then diversify media spend to maximize brand investment. 

The Why & How You Test Is As Important As The Test Itself 

If all of the chaos of the past three years has taught us anything, it is that you cannot have one rigid plan for business success to market towards your customer’s ever evolving spending habits. It starts with building an infrastructure from top to bottom that celebrates the insight you gain from trying, learning, and yes, even failing. 

Fostering a curious culture that has a thirst for pushing boundaries and testing means enabling your teams and agencies to propose ‘out of the box’ ideas, have educated debates and create agreed structure for testing. Aligning on what a good outcome looks like before tests begin is equally critical as the outcome is not likely to possess the exact same ROI your team is familiar with looking at in current channels. 

Another key component of testing effectiveness is to reserve budget specifically for testing. Doing so limits risk to core programs and allows for more agile decision making.  There is always an assumed risk in any new testing but getting ‘out innovated’ by your competition or your margins being negatively impacted due to not changing course in the face of diminishing returns poses significantly more risk. 

The Creative Imperative 

You could read the above and think that we’re in a dire digital marketing situation, when quite the opposite is true.  The shifting privacy landscape and rising ad costs is forcing nimble and flexible marketing strategies to render positive outcomes. There is more innovation and new testing happening now than has happened over the past decade.  From crowd-sourced customer retention strategies that mitigate the enormous cost of new acquisition to tapping into valuable customer data to ensure the incentives offered are what your unique customers are craving and not the broad sweeping discounts that erode precious margins.  As channels emerge and new beta tests launch each day, brands are more directly and impactfully reaching their customers. Recognize that this is the time to get creative, to connect with customers in new ways, and to do something that’s never been done before! 

In truth, it all goes back to building a culture comfortable with testing and evolving strategies to meet the customers where they are shopping with the engaging content they have come to expect.  Now, will you be able to deploy all of the above ahead of the shopping season, most likely not. But, you have the power to start testing, learning and iterating to push your business forward. Initially test in an area where you have a working knowledge, so whether it works or not you have the ability to offer educated reasoning.  Not only do these smaller tests enable your teams to quickly pivot and optimize, but it sparks appetite across the business to push boundaries towards innovation, creativity and growth that will serve you well beyond this holiday season.