Did you know that Q4 contains the most expensive 3 months of the year for advertising and is the leading cause of death among marketing professionals?
Ok, thankfully only one of the above facts is actually true 🙏🤞.
October, November, and December are the three special months of the year when consumers around the world increase their spending. And vendors of all sorts flood advertising channels to try and get a piece of the action.
This means every year, small to medium-sized businesses face the challenge of taking advantage of seasonal opportunities while avoiding overspending. Something that can be difficult to do when you’re forced to compete with the bottomless advertising budgets of big brands.
But even though every year is different, you can learn a lot from looking at the strategies and results of the previous year, to help guide your 2020 holiday advertising strategy.
I’m the CEO and co-founder of Brainity. My platform automates Facebook and Instagram ads for e-commerce stores. We’re basically like the robotic version of an ad expert or agency. And because of this, I get to see A LOT of e-commerce stores’ holiday marketing strategies and results.
E-commerce stores connect to our platform and with a few clicks, Brainity configures their prospecting and retargeting campaigns. They’re then able to run dynamic and contextual ads on Facebook and Instagram in a sequence. Guiding prospective customers through the decision-making process and increasing purchases over time.
As we only launched in March of 2019, we didn’t have any past Black Friday/November results. We were excited to see how the platform would perform in the complex context of holiday advertising. But we couldn’t know what the exact outcome would be.
Having worked as a Facebook ad expert myself for many years before co-founding Brainity, I was well aware of the dangers of Q4. Even though it’s full of popular shopping days, the increased competition can reduce campaign performance and increase costs.
So with these challenges in front of us, last year we knew we needed to focus on monitoring our current users’ results and ensuring the increased ad prices wouldn’t reduce our users’ favorite Key Performance Indicator. That is, the monthly average Return On Ad Spend (ROAS).
In the month of October, just before things started ramping up for the end of the year, our automated campaigns were achieving an average monthly ROAS ratio of 7:1. Meaning stores made $7 for every $1 of ad spend. Lots of sources consider a ratio of 4:1 to be a successful campaign, so we were ecstatic with 7:1. But it’s important to note that each shop is different. Individual ROAS goals should be calculated according to each store’s specific profit margins, costs, and situation.
Brainity ads are designed to go beyond simple retargeting, to work like a funnel. The high average ROAS of our users indicated that Customer Journey-based advertising was working effectively and increasing our users’ campaign performance.
Our platform manages campaigns for e-commerce stores covering a wide variety of products. And some are not exactly the type of stores that experience a seasonal boost (i.e. stores that sell replacement parts).
Additionally, the monthly average ROAS calculation includes our 14-day free trial users. These users are brand new to the platform and are often launching their first Facebook ads ever. Even though the platform is made for beginners, results often improve after the first week or two. As the platform optimizes based on conversion data collected over time.
Ok, so enough explaining, here’s what I found crunching the numbers.
For November 2019, the average ROAS was 1,000%.
Average of course means we had some e-commerce stores make more, and some make less. As mentioned before, a ROAS ratio of 4:1 is widely considered as the benchmark of a successful campaign, so 10:1 had our users very happy. Apparel stores were, in general, the biggest earners.
But even though the results are exciting, I always want to maintain an honest representation of the Brainity platform. It’s true that we make it easy to run Facebook and Instagram ads and use algorithms to power sophisticated prospecting and retargeting campaigns. And we helped a lot of stores get great seasonal results on autopilot this year.
But the Brainity platform is not a magical money-making machine.
I wouldn’t want to share our results and have someone think that ads are the only solution. If your store isn’t optimized or your product fit isn’t right, advertising isn’t a magic fix.
For some stores, ads might not be the right time to focus on scaling. They might need to rethink their product offering or improve their web experience before trying to increase traffic and opportunities.
Advertising will only be successful if the store has figured out how to provide an overall positive online experience. It’s why I think experimenting is so important. Each business is different and should try things out for themselves to become aware of their own specific situation. We know the stores we currently work with are working hard to deliver the complete package to their customers. Which is why we were able to achieve a really surprising average ROAS during Black Friday.
It feels good and we are excited by where we are heading, together.
It’s moments like these that make building something worth it. Thanks for reading this write up of our experience and I look forward to sharing the next milestone.