Measurement Insights

Want to Grow Paid Search Impact this Holiday? Avoid the Reindeer Herd.

Like a herd of reindeer harnessed together, many retail marketers cannot seem to resist following their competitors.

Most retailers and industry publications are now sliding into full-time holiday planning mode. While there is no question the peak sales weeks in November and December are critical for retail sales, I shake my head each year at the mistakes repeated by digital marketers. 

Just today, for instance, I read a report indicating that the peak days from Black Friday to Cyber Monday will again experience the largest paid search ecommerce revenue growth of the quarter. The misguided interpretation I most commonly observe is “I’d better plan to ramp up my search spend even higher those days: I don’t want to lose share to my competitor!”

While this plan seems intuitive to many marketers, Ovative’s years of experience advising and managing digital media for many national retailers lead us to often recommend the exact opposite action.

Our testing and analysis make it clear it is usually more profitable to leave the after-Thanksgiving bidding mania to your competitors.

So, what is the rest of the herd missing? Simply put, most retail marketers are targeting the wrong objective.

Caught up in the holiday-ecommerce-sales-driving excitement, they believe (or misguided leaders told them) their job is to drive the most ecommerce revenue during the most important days of the year.

There are two major flaws in that objective:

  1. It focuses on the wrong revenue metric.
  2. It fails to consider profitability.

Target the Right Revenue Metric

When thinking about revenue, marketers should focus on driving incremental enterprise revenue with their media investment.

  • Think incrementality: A huge proportion of revenue traditionally attributed to paid search comes through brand keywords. Our controlled testing shows very little of this revenue is incremental, particularly during peak sales periods. Meaning, something else drives much of the paid search revenue proudly reported by the industry, and that revenue would have happened anyway. Seasonal consumer behavior should get most of the credit, not paid search ads customers click after they decided to buy. In fact, we have found the same low incrementality is often present in all forms of media and even the promotions many retailers run during peak. With effective measurement in place to remove non-incremental revenue from ROI figures, peak days are not nearly as attractive for investment in media or promotions.
  • Think enterprise (ecommerce + stores): Most retailers drive far more revenue through stores than online. Even in paid search, we typically see several times more revenue driven via stores than through websites and apps. By considering ecommerce alone, not only do marketers under-value their media’s impact, they invest in the wrong tactics at the wrong times. In particular, non-brand search and product ads drive a far higher proportion of revenue in store than online, and as a result are often underfunded relative to other media tactics during holiday. In addition, while ecommerce sales peak in the days immediately after Thanksgiving, store sales and new customer acquisition are heavier in the following weeks, suggesting an entirely different investment timing.

Consider Profitability

While ecommerce sales climb fast during peak days, costs climb faster. Holiday peak can be the least profitable time of year to compete in paid search. We recommend letting your competitors win the race to unprofitability while you invest during more profitable times.

  • Consider media costs: Manic competition drives paid search cost per click far above normal levels. While conversion rates and revenue per click rise, we see many marketers increase bids even more, resulting in lower ROI. Most marketers would be better shifting their limited media budget into lower-cost periods before and after peak days.
  • Consider promotion & fulfillment costs: Media is not the only thing with higher cost during peak ecommerce days. Some of the deepest discounts of the year and highest fulfillment costs cause after Thanksgiving days to have some of the lowest profit margins of the year.

After measuring revenue properly and accounting for the extra costs, we typically find that retailers will drive far better total results by shifting a substantial portion of their paid search and other media budget out of the peak ecommerce sales days and into the weeks before and after.

As tempting as it is to “beat” your competitors during some of the most important days of the year, challenge yourself and your leaders to break from the herd. Ask critical questions about how you are measuring revenue and counting costs, then set a thoughtful plan that maximizes your enterprise’s results for the full holiday season.

Leave the reindeer games to your competitors. Let them celebrate this peak’s record wasteful media spend without you.

Ovative is a digital-first media and measurement firm seeking to transform the measure of marketing success. At Ovative, we help brands move the needle. We are curious. We value your brand. We want to see you succeed. Connect with us to learn more!

Lillian Smith

Senior Analyst, Paid Social

About the Author

Lillian is a Senior Analyst on the Paid Social team at Ovative.

Dale Nitschke

Dale Nitschke

CEO & Founder

About the Author

Dale is the Founder and CEO of Ovative. After years of operating a large omni-channel business and leading a customer data initiative, Dale knew there was an opportunity to create a marketing firm that helped clients become more customer centric and drove better performance outcomes. A gap existed between business consultancies and advertising agencies that modern marketing approaches demand. He also believed that a strong, healthy culture could attract and develop smart, talented team members. In 2009, he formed Ovative to bring media, measurement, and consulting together under one roof to enable an enterprise approach that drives more revenue and grows clients’ customer base.

Prior to founding Ovative in 2009, Dale spent 23 years at Target Corporation where he served as President of and grew the ecommerce business from start-up stage to a $1 billion+ business and established the foundation of Target’s Guest database capabilities. Previously he served as SVP Merchandising at the Department Store Division of Dayton Hudson. Dale has advised retailers and brands globally on business, growth, marketing, and measurement transformation strategies.

Outside of Ovative, Dale is a leader on topics including business strategy, change management, and team leadership. He serves on the board of Allergy Amulet and on the Dean’s Advisory Board of the Wisconsin School of Business at UW-Madison.  He enjoys spending time with his family, up north in northern Wisconsin, playing golf, and cheering on Wisconsin sport teams.

Seth Brand

Senior Manager, Consulting

About the Author

Seth is a Senior Manager on the Consulting team at Ovative.

Amanda McCann

Senior Manager, Consulting

About the Author

Amanda is a Senior Manager on the Consulting team at Ovative, specializing in Retail Media Networks.

Jenny Reinke

Senior Analyst, Measurement Solutions

About the Author

Jenny is a Senior Analyst on the Measurement Solutions team at Ovative.

Annie Zipfel

Executive Vice President, Media

About the Author

Annie is the Executive Vice President of Media at Ovative. She oversees delivery and growth across paid and owned media (digital, traditional, and retail media) and creative services.

Annie has more than 30 years of experience in media, brand management, insights/analytics, marketing, and product. She has also developed large, high-performing teams and built new measurement capabilities. Annie led the marketing team at Andersen Windows & Doors, leading the digital, social, content, customer insights, and creative functions. Prior to that, Annie served in multiple marketing leadership roles at Starbucks, REI, Target, and General Mills, with a keen focus on brand, media, insights, analytics, and measurement.

Annie is an industry leader in brand management, customer insights, e-commerce, social media, and analytics. She enjoys hiking, traveling, cooking, fishing, and spending time with her sweet dog and two sons.

Bonnie Gross

Executive Vice President, Talent Services

About the Author

Bonnie is the Executive Vice President of Talent Services at Ovative. She is responsible for attracting and retaining top talent and creating a culture in which our team thrives personally and professionally. Under Bonnie’s leadership, Ovative has defined an industry leading leadership and development program and transformed our approach to talent recruitment with a focus on diversity, equality and inclusion. Prior to her current role, Bonnie led Ovative’s Client and Business Development team overseeing client satisfaction and new growth opportunities.

Before joining Ovative in 2014, Bonnie spent 13 years at Target Corporate as the VP of digital and Digital Marketing where she led the launch of Cartwheel, an industry-leading social shopping application. Bonnie was the VP of Marketing for Fingerhut for 15 years prior to joining Target.

Leander Cohen

Analyst, Consulting

About the Author

Leander Cohen is an Analyst on the Consulting team at Ovative.

Will Silva

Analyst, Measurement Solutions

About the Author

Will is an Analyst on the Measurement Solutions team at Ovative.

Sarah Chang

Sarah Chang

Analyst, Consulting

About the Author

Sarah Chang is an Analyst on the Consulting team at Ovative.

More Measurement Insights

Measurement Insights

Transforming Consumer Packaged Goods Marketing Success with Enterprise Marketing Return

One of the biggest challenges in CPGs is the lack of consumer-level data to make better decisions for the... Read More »

Senior Manager, Consulting


How to Measure AI Advertising Campaigns

A new generation of campaign management tools are utilizing machine learning to increase efficiency and campaign performance.... Read More »

Analyst, Measurement Solutions


Marketing Measurement is Changing, Don't Fall Behind

Experts from Ovative's measurement team, Beth McKigney and Troy Neidermire, hosted a webinar alongside Forrester's Tina Moffett discussing how... Read More »

Insights Team

accent bar