Will Digital Marketing be Worth It This Holiday?

The news this holiday has been all about America’s massive supply chain disruption which has retailers warning shoppers to buy early as they expect inventory issues.  This back up in the supply chain which has inventory sitting in ports with no way to get to stores and warehouses, has of course led to an increase in prices due to the limited supplies. But there are other rising costs that also have retailers worried this holiday, specifically the costs of digital marketing.  In this article, the author highlights many of the issues with digital marketing this year compared to years past such as Apple changing privacy policies, the expected drop off in Facebook usage, and the consumer behavior changes coming out of the pandemic. 

Last year, during the pandemic, companies in the travel industry, for example, avoided paying for digital marketing advertising on social platforms and other sites to conserve cash during uncertain fiscal periods and to avoid coming off as insensitive during a difficult time.  This left prime advertising real estate during the holiday for other retailers who ended up seeing successful returns on their digital ad spends. However, this year, like the increasing costs from the supply chain issues, digital marketing costs are also increasing. Last year, with people stuck at home scrolling through media and social platforms, advertisers had a captive audience that may not be there this year.  With this almost full return to normal post-pandemic life and spending habits, retailers will have to be smarter with their ad spend. 

This may mean that targeting and content will play a bigger role in digital advertising this year.  As prices increase retailers will want to get their messages to customers with whom they will resonate the most and see the best ROI.  Some retailers are tweaking campaigns to state their inventory positions amidst all the supply chain concerns with messages like “ready to ship” and are starting their advertising blitz earlier.  Other retailers are waiting on goods to arrive to start their blitz of holiday campaigns.  With all these rising costs for companies this holiday season, it will be interesting to see how it impacts revenues during a time that most retailers see their largest revenue gains.