The least well-kept secret in all of eCommerce is that Black Friday and Cyber Monday deliver phenomenal results.  We’re talking boku bucks in paid search revenue that many marketing departments dream about all year long.  So why is it that most advertisers still don’t manage to capture the totality of the opportunity of these days?

We looked at a sampling of 20+ retail clients from 2013.  We indexed their ROAS (return on ad spend) on Black Friday and Cyber Monday against their ROAS for November and December overall.  The results?  Advertisers had a 68% higher ROAS on Black Friday and a 78% higher ROAS on Cyber Monday.  Non-brand ROAS was 52% higher on Black Friday and 89% higher on Cyber Monday.   That sounds like a good thing right?  Not necessarily.

BlackFridayPost

For most retail clients, the goal should be to maximize profit, not achieve the highest possible ROAS.  More simply, you want to maximize revenue above a profitable ROAS.  If we assume that our clients were profitable throughout November and December, that means that our clients likely left money on the table by not being as aggressive with bids as they could have been on the two major shopping days.  Since we’re looking at non-brand campaigns, we often times are not in 1st position, nor do we have 100% impression share.  Higher bids should yield more ad impressions at better ad positions, resulting in more clicks, conversions and revenue.

Let’s look at an example.  Let’s say TitosSnowboards.com is profitable at an ROAS of 6:1.  That’s what we achieve throughout the Holiday season.  However, if we anticipate that Black Friday should deliver an ROAS of 9:1, it’s likely that I’ll drive more revenue if I push up bids.

We could hypothetically spend $1,000 and drive $9,000 in revenue, or we could bump bids up and spend $2,000 and drive $12,000 in revenue.  That means our profit (revenue – ad spend) is higher in the latter scenario.

This doesn’t mean that you should blindly raise bids 50% on Black Friday.  It does, however, mean that you should look for individual keywords, keyword categories and potentially even whole ad groups and campaigns to bid higher than you have been the rest of the year.  Black Friday comes once a year, don’t get stuck in a turkey coma, make sure you’re taking advantage of eCommerce’s version of Christmas.

Share: