Keep Calm and Carry On: The Truth About CPCs in Q4

by Amanda Oliver 12 months ago

The holidays can be a stressful time; trying to find the perfect gifts, dealing with the massive crowds, and trying not to drink too much at the company holiday party can combine to drive anyone crazy.

And if you’re an e-commerce brand, you’re likely to get even more stressed as you see increased costs and high CPCs during this same time.

While I can’t alleviate your holiday shopping stress, I am here to reassure you that you can keep calm and carry on when it comes to seeing rising costs during this holiday shopping period.

(1) Brace Yourself – Competition is Coming

It’s common knowledge that the fourth quarter, and especially the end of November and into December, are extremely competitive times for many e-commerce brands. The marketplace becomes crowded, which makes ads more expensive, and now you’re dealing with both increased competition and higher costs just to get your ad seen.

Luckily, the same way that Ned Stark, Lord of Winterfell warned his people to brace themselves for winter, you too can brace yourself for the upcoming “battle” by testing your ads and/or creative as early as possible.

By early as possible, I mean you should be testing your ads and creative from now into November.

Now is the time that you want to be looking to see what works best for your brand. Testing whether incentives such as free shipping works better over a percentage off is important for your strategy come late November. You don’t know what consumers may be favoring, so it’s crucial to try different combinations of ads and creative now to see which converts more users.

Having this knowledge in your back pocket allows you to keep your ad spend in check as costs increase. These tests will provide you with insights about audiences and/or creative while your costs are still low.

The more you can prepare, the better you will be able to handle the Game-Of-Thrones-type atmosphere that is e-commerce during the holiday season.

(2) But Keep Calm & Carry On When It Comes To CPCs

Many of our clients tend to be focused on CPCs throughout the year. However, since more competitors enter the e-commerce game aggressively during Q4, you’ll want to be less focused on that KPI.

Instead, it’s better to keep your eye on conversions and overall sales, since that will offset increased CPC costs during this time.

For example, you might see your CPCs increase by 30%. Such an increase, in isolation, may sound terrifying. During that same time, you might also see your conversion rate increase by 50%.

As scary as it can be to see costs going up with the increased competition, you should feel safe in the knowledge that you already tested what worked best earlier in Q4.

Therefore, you’re prepared with what you know will work best with your audiences. Because of this, you should see a corresponding increase in conversions and purchases. With that, you’ll be able to offset your increased CPCs and still increase your bottom line.

400px-x-400px-noahIn addition to putting together your strategy based on testing early in Q4, you should also factor in a “fluidity” when it comes your budget during the biggest shopping weeks. As Noah Schottenfeld, Senior Ad Optimization Specialist, said, “Being agile with your budget and knowing that portions of it may need to be adjusted as you see what happens during this time, will keep you from falling behind your competition.”

If you see that a certain ad is working wonderfully, you’ll want to turn up ad spend in that direction, and turn it down in others.

The best way to get the most out of this season is to not stress over CPCs and be willing to adjust to capitalize when ads are hitting it out of the park.

CONCLUSION

Keeping your focus on increasing overall sales and off of that CPC metric means you can keep your budget and KPIs flexible and adapt to what’s working.

Plus, if you’ve been testing properly, you’ll show up to the holiday rush prepared.

You can’t control the competition or the rate in which costs might increase. But since you can control your flexibility and testing, you can stay focused on rocking your overall goals, instead of stressing over specific CPCs.