Holiday advertising CPM trends in 2022
Every end of the year, buyers begin to spend in order to fuel their holiday gift-giving. As a result, firms begin to increase their marketing spending in the hopes of catching the attention of their ideal customer.
This means more market competition for brands, and not just against traditional product or service competitors. Tons of businesses like you are marketing to and targeting advertisements to the same categories of clients.
Historically, this has resulted in a greater cost-per-“mille” (CPM) for each impression served. With more people vying for the same ad positions, winning a bid and actually serving an impression requires an increasingly high bid. In other words, if you want to reach the same number of users, you’ll have to spend more.
What is the forecast for 2022, and what should marketers do to prepare for this seasonal shift? Let us begin by learning from history.
Holiday CPM Seasonality in the Past.
When it comes to year-end CPMs, 2020 was an unexplored year. While the concern surrounding the epidemic and its consequences for ad performance indicators, including CPM, remained high, we found that the virtually usual ramp in CPM trends toward the holiday season began in line with the trend seen before the pandemic.
Forecasts for 2022
This brings us to the topic of modeling and forecasting. Based on data from previous years, it is safe to expect that the end of the year will be the most expensive time of year for reaching people this year as well. With a greater baseline compared to past years, even identical relative growth implies significantly higher CPM.
Changes in the baseline.
The epidemic demonstrated clearly how supply and demand drive CPM trends. Marketers responded to the epidemic in March 2020 by scaling down campaigns almost immediately, despite more people than ever before being online (working from home, quarantining, etc.), resulting in a sharp drop in CPMs in April.
In terms of CPM trends this year, we anticipate no signs of growth slowing in 2022. In reality, we find the opposite: ad placement competition is intensifying, as it was last year and prior to the pandemic.
How Do CPM Increases Affect Your Holiday Campaigns?
A higher CPM indicates that it is more expensive to reach your target audience, which will have an impact on all of the metrics you may use to assess the effectiveness of your campaigns (ranging from cost per user reached, CPA, CPC, ROAS, etc.). Any time is a good time to evaluate and reprioritize the aims of your campaigns, but especially when impressions are more expensive.
Your Objectives, Metrics, Potential Changes, and Next Steps
Does your marketing include…
ROAS or CPA for conversion-driven goals?
ROAS and CPA objectives are typically employed for conversion-driven ads that target an audience that is already familiar with your brand. While growing CPMs make reaching these users more expensive, the silver lining is that your campaigns’ CPA and ROAS will not be affected at the same rate.
After all, you’ve probably already spent in these audiences to get them interested in the first place. With these consumers being so close to conversion, assisting them with the final leg of their customer journey would be inefficient at best.
Finally, it is more expensive to reach users in your efforts, but owing to the lower funnel nature of these initiatives, even a significant increase in these costs is unlikely to be worth it to stop targeting these users entirely.
Do you want to grow your targeted audience list?
While your CPA or ROAS is unlikely to be impacted at the same pace as your CPM because they only target existing users, conversion-driven campaigns, such as retargeting campaigns, are the most impacted by rising CPMs.
Consider broadening your intended audience as much as possible to avoid limiting prospective bids to a narrow set of users. How? Consider increasing the duration of your campaign or broadening the scope of your targeted audiences.
You should be aware that retargeting campaigns targeting a broad 1+ page viewed or ‘all visitor’ category outperform retargeting marketing targeting only a very high intent segment such as abandoned carts. It helps to allow our bidders to cast a wide net when it comes to picking up conversion signals; because consumers in a cart signal display more high-intent signals, we will likely wind up paying higher on these individuals anyhow.
Does CTR measure traffic and engagement goals?
When your aim is ad engagement (ad clicks or generated website visits), you should be aware that CTR is not directly related to CPMs. Instead, think of it as a chain reaction.
CPM increases mean fewer impressions for the same amount of money, which means fewer clicks—even if your audience clicks through at the same rate as before the CPM increase.
What are your options? Optimize your creatives and experiment to see what works best for you. Consider experimenting with an alternative call to action or creative methods in your commercials. The more noticeable your CTA, the more likely you are to attract attention and, eventually, impact visitors.
Impression-based brand awareness goals?
While a higher CPM results in a greater cost per person reached, the good news is that brand awareness initiatives targeted at people who are unfamiliar with your brand at the top of the funnel have a substantially lower CPM than lower funnel tactics such as retargeting. You may increase your potential reach per dollar spent by moving funds from lower to upper funnel initiatives.
A Strategy to Consider in 2022
Email + Advertising
Email marketing is still going strong. Insider Intelligence refers to it as a “resilient” channel, and we at AdRoll know that email + ads are a strategy that creates leads that are twice as likely to convert and convert twice as quickly. By synchronizing your advertisements and email campaigns, you can provide your clients with a unified marketing experience across platforms. This is an opportunity to leverage each channel and provide consistent messaging and offers that encourage consumers to convert.
2022 Considerations
Marketers are feeling a greater need than ever to achieve a better balance between investments and profits. Many clubs have experienced layoffs, reduced finances, and inflation in 2022. However, there has been an increase in creative advertising, a greater emphasis on brand purpose, and an increase in channel variety this year.
According to Digiday, some marketers are completely slashing expenditures across all channels, while others are attentively monitoring where their budgets are going and investing in more value channels.
As the end of the year approaches, marketers must bear in mind what is to come: the holidays. According to Insider Intelligence, despite the economic slump, customers will continue to make purchases, and consumer purchasing behavior will strongly influence marketing trends.
The crucial thing to remember is that consumer sentiment is still rising, which means you may still interact with customers who are shopping.
Better Decisions, Based on Better Data
It is obvious that improving your campaigns and KPIs is critical to guaranteeing their success during the Christmas season. Whatever the seasonal trends are, having access to all of your data across channels always allows you to make more educated decisions.
