Many retail businesses rely on seasonal sale periods throughout the year to boost profits. The Christmas period of 2015, for example, generated 21% of yearly e-comm spend.
While we always recommend avoiding strict budgets, and aim instead to generate as much profit as possible at a target return on investment, we also know that many businesses need to create marketing budgets for the year in order to forecast performance. Below we’ve outlined our approach to budgeting during holiday and peak periods so you’re able to remain competitive and, more importantly, profitable.
Identify your peak holiday periods
As a rule of thumb, the best place to start is to look at the historical data for your accounts. The questions you need to ask are:
What peaks did you see last year in your conversions?
How much did you invest over the holiday seasons last year and/or the year before?
Did this yield the desired revenue?
If not, would increasing or decreasing the budget for these periods get you closer to your target figures?
If you don’t have any historical data to look over, don’t fear: AdWords has a recommended budget which estimates the cash required for your ads to remain competitive. This is based on the traffic volume for your keywords and acts as a good starting point.
You can also use Google Trends to check out seasonal fluctuations for almost any keyword or brand name since 2004. This can be incredibly useful in predicting buying behaviour for brand new accounts.
Another way of planning your budget is through the keyword planner. This is a great tool to see cost-per-click estimates, which helps by letting you know exactly how much you can be expecting to pay per keyword. To access it, navigate to your AdWords account, click ‘tools’ at the top of your dashboard, then click ‘keyword planner’.
The final tool you can use is Google Analytics. Here you can look at your site’s conversion rates to see how people usually convert during these holiday periods. Comparing this to customer behaviour outside holiday periods can give you an idea of the difference in revenue, which in turn can tell you how much more to invest given your company goals at these times.
Having asked these questions, and used these tools, you’re now ready to allocate your budget.
Allocate that budget
The most obvious starting point in allocation is to assign more money to your most profitable seasonal periods. But how do you ensure you’re able to remain profitable in these periods?
Here at Genie we input seasonal trends into Clarence, our bidding software, and we’re then able to algorithmically change our bidding strategy according to expected trends. You can take a more manual approach using the AdWords ‘automated rules’ function to adjust bids and budgets depending on a number of factors, including seasonal periods.
Let’s say you want to increase your spend for the day before Valentine’s Day. You can create an automatic rule to increase your budget and bids for the desired time and decrease it to a normal level afterwards. Using automated rules is a great way to make automated, large scale changes in your budget and bids.
To use automated rules, click ‘automate followed by ‘change daily budget when’. Then (using the menu options) select the campaigns you want, then the automated action. Remember to make rules in pairs - a rule to make a change and a rule to change it back later: so in this example, ‘Raise daily budget’ for the first rule and ‘Decrease daily budget’ for the second. Set the frequency to ‘One Time’ and enter the date you want to make the change.
As with any campaign, it is of utmost importance to regularly monitor performance to be prepared to make changes to your allocated budget and your bids. Our bidding technology makes bid changes proactively and reactively according to the fresh data appearing in the account, up to four times per day, but if you’re manually adjusting bids it’s important to keep a very close eye on spend during peak or seasonal changes.
There are several eventualities where a necessary change to your budget may be required; for example if you are facing much more competition than you estimated... or much less! It’s important to keep an eye on anything which may require swift action. Furthermore, It's useful to avoid having a rigid budget plan set in stone, but to have one with more flexibility, so you can make changes if the unexpected occurs.
We find it useful to set up a series of alerts which notify us immediately if any unexpected activity happens outside our normal account monitoring. These can be as simple as alert services to let us know if the site is down, alerts to notify us when spend is outside statistical norms, or alerts to tell us if conversion rate drops below expected levels. This allows us to make changes the minute that something happens in the account.
Recap: Identify, allocate, monitor
Thinking in more depth about where you allocate your annual budget can result in much healthier conversion volumes at the end of the year. Using your account's historical data to assess which times of the year see the most conversions is a great way to work out a seasonal budget strategy which works for your account.
Once you have a plan in place, you can use automated tools to increase bids and budgets according to seasonal trends. Finally, there’s nothing more important than monitoring your campaigns daily to assess whether your campaigns need more or less investment in order to maximise return on investment. Good luck, and happy campaigning.