Navigating The Holiday Season's Bidding Frenzy

The lines have blurred when it comes to Black Friday and Cyber Monday, as consumers now engage in both online and offline shopping activity all weekend long. In 2013, Thanksgiving and Black Friday brought in a combined $12.3 billion in sales, according to ShopperTrak. The National Retail Federation reported that 92 million people shopped on Black Friday, with nearly half shopping online. Additionally, Cyber Monday reached an all-time high, with $1.7B in desktop sales.

We all know the kind of frenzy that goes on during this time of year. First, consumers flood big-box retailers and soon after, online retailers get in on the action. For real-time buying (RTB), this means more than a shopping frenzy. The surge in sales around these prime shopping days also means a bidding frenzy.



By now, a large majority of advertisers spend a portion of the their holiday marketing budgets on RTB, which helps them reach and get in front of customers in real time based on a varied set of behaviors, including online search and site activity. What tends to happen during a high volume-shopping period like Black Friday and Cyber Monday is, the number of advertisers bidding on audiences increases signficantly, which drives up the bid price. As bid prices go up, so does the cost per acquisition, making it much more costly to acquire a customer.

During Black Friday and Cyber Monday and even throughout the larger holiday season, inventory can also be harder to come by. The influx of dollars spent on advertising in guaranteed buys may reduce the volume of inventory on the open marketplaces. The combination of less inventory available with increased demand also forces higher prices across the ad exchange environment. 

As RTB matures, companies will become better equipped to deal with the holiday rush.   Here are some things you can do to make sure you reach your customers with the right campaign at the right price:

  • Adjust bid prices early on, and optimize pacing to ensure that your campaign can meet delivery goals. Hopefully you or your partner has an optimization engine that can do the heavy lifting for you.
  • Look at historical performance and evaluate previous market activity to inform your RTB strategy, including when to begin more aggressive bidding.
  • Lock in rates with proven sources of good media ahead of time with private marketplaces.
  • Experiment early on with cheaper sources of media, like long-tail sites.
  • Integrate your CRM database into your site retargeting campaigns. Bid more for loyal customers -- you don’t want to lose them.
  • Implement a cross-device strategy. Tablets and mobile phones as well as desktops have RTB inventory available to buy. Not many companies have done this yet, but you may find it cheaper -- and more effective -- to reach your customer on a different device.
  • Think hard about your attribution model. Serving an ad to someone at the last second often does not have much of an impact. At this stage, consumers are most likely to click on the ad, as they have already made their purchase decision and decided to buy from you. Influencing purchase decisions earlier equals cheaper inventory. We’ve found that the most expensive inventory is not based on media type, but on bidding strategy. Site retargeting tends to be more expensive than all other forms of RTB bidding. Implementing a prospecting strategy such as search retargeting can significantly reduce your cost of customer acquisition, especially when you have the proper attribution model in place.

At the end of the day, advertisers want to be where their customers are -- and RTB continues to prove that it is the most effective strategy available. Rather than placing such an enormous emphasis on Black Friday and Cyber Monday, brands should leverage RTB across the extended holiday season, taking advantage of data that can help them reach and influence their customers early on, well before the bidding frenzy begins.

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