Buyer behavior undergoes a significant transformation that takes place not only before but also after the holiday season. Therefore, sellers must adjust their approach during the holiday period at the end of the year, and entering Q1.
BellaVix Amazon experts have been working on breaking down important advertising approaches and transitions through the end of this year and into the early part of 2024. This article will give you a full strategic outlook for a successful end-of-year and Q1.
During the Holiday season, most sellers experience an increase in sales by 3x or 4x. However, the CPC may also increase as much as 2x or 3x. Consequently, the ACoS will tend to increase and ROAS will tend to drop.
ACoS (Advertising Cost of Sales)
It is an important metric to determine the advertising campaign’s success on Amazon and how much it costs to be a profitable seller. However, the campaign effectiveness is determined by the seller’s target and product margin.
Bearing in mind low ACoS means high profitability and a high ACoS means low profitability, sellers tend to push for low ACoS unless they are working on a specific brand awareness strategy where being profitable is not as relevant as getting impressions and clicks.
Advertising Strategy after the Holiday Season
When the shopping season is over, we must pay attention to advertising and retargeting efforts for customers who already purchased. This is an important step that can be easily forgotten Not all customers who bought during the season will be interested in purchasing again after the season is over.
Let’s suppose you are a business selling mugs on Amazon and have been advertising the products from your catalog through different placements. At almost the end of the season, a customer needed a last-minute gift and ended up finding and buying one of your mugs due to an effectively placed advertisement.
Clients such as the one previously mentioned usually purchase goods of something other than this kind. The aim in this instance is to buy a present for someone else. If you reach out to these customers for the remainder of the year and into Q1, they will be very likely to:
- Become aware of your brand through regular exposure to your mugs.
- No longer want to buy your product because their need for gifts has been satisfied.
- Feeling deterred from your brand as a result of seeing so many unwanted mugs.
How should you adjust your advertising strategy through the end of the year and into Q1?
Here are some general tips to have in mind to make it through the rest of the year and prepare for Q1:
- Adjust bids: Keep an eye on your bids as the value of clicks decreases when the conversion rate decreases after the holiday season. Consider decreasing them gradually.
How much should we be pulling back?
- Look at the dropping conversion rate last year: Amazon’s historical data will help you understand when the conversion rate for your category is most likely to drop. Using your website data is also a good option to understand this trend.
- Monitor your products, especially the Best Sellers: Understanding the behavior of your products after the season is over is crucial. If there is a high drop in the conversion rate after the season, your product is most likely giftable, and retargeting efforts for the same audience may not be successful.
- Intervene Manually: Many tools for bid optimization may quickly pick up on trends. However, they usually take into account a lookback window that includes the holiday season, which will affect the real trend.
- Pause or pull back on retargeting campaigns: Constantly targeting customers such as the one described above who are shopping for others could lead to budget money wasted.
- Be aware of your lookback windows. If you have retargeting campaigns with a 3 or 5-day look-back window, you can pause them and relaunch them after 3 to 5 days so that you can reach a more relevant audience.
For eCommerce sellers, the period between Christmas and the beginning of the new year is very dynamic. It’s crucial to refine the advertising strategy to optimize budget usage and lay the groundwork for a successful start to Q1.
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