2006 Online Holiday Campaigns: Midseason Perspective

Not only is it December already, but we’re almost halfway through the peak online holiday shopping season. Unbelievable! It feels like the window of opportunity for online shopping gets smaller and closes more quickly every year. Who even had time to take advantage of Black Friday or Cyber Monday?

Analysts differ in their initial assessments of Cyber Monday this year. A study commissioned by Deloitte & Touche found that more people shopped online the day after Thanksgiving than last Monday. According to the firm, 20 percent of consumers were buying products on Black Friday, while only 19 percent were shopping on Cyber Monday, with better broadband connections at home leading the shift.

Hitwise finds that though Cyber Monday traffic rose 13 percent over 2005, Thanksgiving Day was the peak day for Web traffic. This is primarily because “consumers use the Internet to research Black Friday sales the day before venturing out to bricks and mortar stores,” says Hitwise. Stats from the NRF support this: “88.7 percent of consumers regularly or occasionally examine products on the Internet before buying in a store.”

And the implications of comScore’s Cyber Monday research depends on who spins it. Cyber Monday sales were up 26 percent to $608 million, says the panel-based research firm, but “Business Week” pooh-poohs Cyber Monday as “still only 12th most popular online shopping day of the year.” ComScore’s and others’ data suggest online holiday retail sales will peak the week of December 10, with the week of December 17 only slightly behind.

Since online retailers depend on shipping their orders, the reality is most have to cut off their orders one to two weeks in advance of the holiday to ensure gifts arrive on time. Or from an advertising point of view, “Pony up early and heavily if you want to have any impact whatsoever.”

How are advertisers faring? With bigger-than-ever Q4 online ad budgets, we’d expect to see correlating results, but just where and how are those ad dollars being spent this holiday season?

According to Jack Smith, 24/7 Real Media’s VP of product strategy, there’s been “a shift of display ad dollars away from the portals to networks. [Retail] clients still prefer search to display [ads] and are increasing budgets based on clearly defined ROI targets.” The portals wouldn’t respond to this statement, but I bet they’re not hurting for ad dollars during this holiday season, either.

Sheryl Draizen, the IAB’s SVP, concurs about the ad mix, stating that 40 percent of holiday ad dollars will be spent on search, compared to 31 percent on display ads. The impact of online holiday advertising hasn’t even kicked in yet because, according to Draizen, “shoppers are waiting longer to make their purchases this holiday season and in general.”

Having posed this perspective to a handful of industry analysts and representatives, I heard similar assessments. Most agree the retailers are executing their online ads well, but that consumers are let down when they arrive at the sites. Ads for Cyber Monday stipulated “quantities limited,” but so were the selections; shoppers were consequently frustrated or disappointed. When consumers who were expecting deep discounts or incentives (like free shipping) didn’t find them, they left sites unfulfilled and in search of better deals.

Holiday shoppers know what’s coming: last-minute deals and special incentives. They have learned from past years and are smarter and more discriminating now. That’s another reason Draizen feels buyers will shop later. She recommends that instead of losing the potential buyer altogether, retailers should forge a relationship with them as quickly as possible, so the retailer still has a shot at wooing the consumer back for those last-minute deals.

E-mail newsletter ad buys, stalwart performers in my agency’s arsenal, can be leveraged to contact these last-minute shoppers if the retailer isn’t able to establish a relationship. Many run special editions with holiday bargains. The trick, however, is that inventory is limited and usually has to be purchased well in advance to ensure holiday visibility.

On the bright side, the NRF has observed that perhaps for the first time in its history “retailers are finally merging their Web sites with their brick-and-mortar stores.” That’s likely to mean more opportunities to return or exchange gift merchandise off- or online, which is good news for shoppers.

Up next: holiday campaigns in hindsight. Agency folks, I’d like to hear from you!

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