Data Shows Retailers Need To Pace Spend To Maximize Black Friday Performance

Traffic volatility can make spend pacing during Black Friday very challenging. Spend too much too soon and you might suffer a lower ROI and not have money left for Cyber Monday. Spend less and you might be missing out on consumer volume.

Performance data from the past three years reveals that search marketers are indeed leaving money on the table. Spend drops during the week in anticipation of Black Friday and then picks up on Black Friday.

The ROI increases by 20% over baseline too. Spend on Cyber Monday increased 50% over baseline in the past three years but the ROI more than doubled too.

Conversion rate trends tell a similar story, as conversion rates on Cyber Monday are more than double the baseline.

These trends suggest that marketers have room to maximize their performance during Black Friday week.

First, they should increase their investments on Cyber Monday to get to the consumer who is twice as willing to buy on that day than the preceding week. Second, if the overall budget is fixed then spend can be lowered on Thanksgiving day as ROI and conversion rates are lower than average.

Finally, if retailers want to analyze their own data, I would highlight a few potential caveats. Cyber Monday conversion rates are higher because many retailers lower their prices. As a result, retailers will see a lot more revenue but not necessarily margin. Needless to say, if you are margin focused then measure performance by looking at margins by day.

Further, conversion rates on Cyber Monday might be higher because consumers are researching products they want to buy over the weekend and making the purchase on Monday when the prices drop. This “priming” would help Cyber Monday’s performance.  Still, the high discrepancy between Cyber Monday and the other days around it suggest an opportunity for optimization.

If you are a retailer, I would advise looking at performance numbers by day for the days around Cyber Monday for the past two three years and if you find trends similar to the ones I find, you should consider increasing search budgets on Cyber Monday. After all, there is money on the table, don’t you want it?

Note: I would like to acknowledge Manoj Jacob, one of the crack analysts at Efficient Frontier who compiled all this data. Thank you Manoj!