How Small Businesses Can Be Successful During Black Friday
At Hot Sauce, we’re already thinking about what can be done going forward to help smaller to medium-sized businesses stand out from the noise.
Based on our research, we have already seen reports that Black Friday online spending has decreased for the first time. In 2020, shoppers spent $9 billion online and in 2021, the early reports suggest that online shoppers spent $8.9 billion.
"Adobe suggests that the trend downward might have been caused by an uptick in early spending."
Impact of Earlier Spending
Another factor for the earlier spending is that for online businesses, Black Friday has turned in to weeks of advanced promotion. As brands rush to try and get ahead of one another in an effort to keep costs low, they’re pushing the limits on how far out the sales start.
My hypothesis is that for small businesses (including e-commerce), Black Friday and Cyber Monday will simply become too expensive to advertise. In short, you will be priced out of the market.
The Rising Costs of Black Friday and Cyber Monday
In several marketing & media buying groups that I am a member of, there were reports that CPMs climbed 35% on average compared to the week before Black Friday. In some cases, there were reports of CPMs being up 75% since October!
For context, CPM is the amount an advertiser pays per one thousand visitors who see its advertisements. Typically CPMs on Facebook range between $2 and $30. Let’s assume we see an average CPM of $5. If that increased by 75% and everything else remained the same, our cost would rise from $5 to $8.75. For most small e-commerce brands that is simply not affordable.
Black Friday & Cyber Monday Marketing Trends
There were several trends that we picked up on this year, and some that we’ve heard of through the various groups we’re a part of.
iOS 14 and privacy/data changes had an impact on Black Friday. It was harder to be aggressive with ad spend throughout the day because there is less data available to Facebook.
Attribution remained a challenge. Using UTM’s is critical to be able to track the overall impact of your paid marketing campaigns in Google Analytics. Comparing the data seen in Google Analytics and Facebook Ads Manager varied by account but in most cases, we saw Facebook data lagging behind Google Analytics.
Static creative outperformed video. When using discount messaging, we typically see a static image outperform a video ad. This varies by client, of course, but this is a trend we feel confident in reporting.
Performance picked up throughout the day. This was a big topic of discussion in several online forums but a lot of media buyers and brands were reporting that sales started slower in the morning and picked up later in the day.
Brands that leveraged more than just ads did well. Using email and SMS are tactics that help lift a brand but also those brands that add a homepage banner image, a popup, or a banner on their website maximize their ability to get the message out.
How do smaller e-commerce businesses survive Black Friday and Cyber Monday?
This is a good question and one that doesn’t have a simple answer that is universally applicable. With the rising cost of Black Friday for small businesses and my hypothesis that these rising costs are going to price most brands out of being able to have successful BFCM campaigns, I have a few ideas.
#1 Start Marketing Early
I’m talking, like, really early. I’d recommend deploying a strategy that you can deploy over the course of the year to acquire email signups, web visitors, and people who are engaging with your content. Building this audience will allow us to tap into them during Black Friday and Cyber Monday. Sending emails is (almost) free! Just don’t wait until Black Friday to start collecting this data.
#2 Work With A Trusted Partner
I almost didn’t put this one in here but decided on adding it because this can make a huge difference. This is the wrong time of year to see how good you are at managing Facebook Ad campaigns. Work with a trusted partner who knows what they’re doing and can deliver value for you.
#3 Take a Stand
What does your business stand for? Some small brands refuse to offer discounts on Black Friday. Other brands, like Patagonia, donate 100% of their profits from Black Friday. This will vary from one business to the next but whatever you stand for, make sure you tell the world. Send a press release, post on your social media accounts, and let everyone know what your plan is.
#4 Embrace the Cost
If you’re able to plan for the rising costs, that is great. You can still have a successful Black Friday / Cyber Monday campaign if you account for the rising costs and budget a little more each year for your marketing efforts.
#5 Compelling Offer
Similar to taking a stand, if you’re going to offer a discount or run a sale, you need a compelling offer. 10% off a product that costs $20 is not enough. Make a significant splash, create urgency, and drive scarcity. “I never do this - It’s 40% off for the next 6 hours only” works well.
#6 Don’t Rely on Black Friday
I’ve often seen businesses who count on Black Friday as a make-or-break for their business. This one is simple. Black Friday is not predictable and you can’t rely on it to make your business.
We’ll wait and see the full details around Black Friday and Cyber Monday spending habits and continue to monitor for other trends. While small businesses and e-commerce businesses might soon feel like they’re priced out of Black Friday, there is still a lot you can do to make your business successful, scalable, and sustainable.