This year, given the current economic uncertainty, the pressure on the fourth quarter is amped up for marketers. That might be one of the reasons some are planning to offer holiday sales incentives earlier in the season, with some advertising executives saying they have clients — mostly e-commerce and direct-to-consumer brands — planning to spend ad dollars earlier in the year and easing up in December.
Marketers aren’t alone in starting to roll out holiday marketing and sales early. Target and Walmart are reportedly getting a jump on holiday sales this year in an effort to ease the challenges of inflation. And Amazon just yesterday announced that it would also offer an early access holiday sales event in early October for Prime members, touting that they could “start saving now” in the company’s press release.
“We are definitely seeing brands go forward with earlier sales, similar to last year,” Katya Constantine, CEO of performance marketing shop DigiShop Media, said when asked about the earlier time frame for holiday sales this year. “With another Prime day being announced for early-mid October, we now see it as the earlier kick off to holiday shopping and brands’ promotional plans.”
Ad execs noted that the holiday shopping season has been extended in recent years, so while the current economic environment may contribute to some marketers bumping up their plans, it is likely not the only reason for the early holiday sales.
“I don’t think this is to combat inflation but rather a force function to extend the holiday shopping window earlier and earlier,” said Alex Brandstetter, senior strategy director, account management, at Wunderman Thompson Commerce, Seattle. “This was a massive success during Covid.”
Brandstetter continued: “The reason they did it back then was to take pressure off their constrained supply chain by spreading demand over a longer period, but today, it is actually driving consumers to start spending earlier in Q4 — encouraging brands to spend more in retail media as well.”
Grace Teng, chief media officer at Zambezi, said she expects that brands’ and retailers’ e-commerce teams will be “activated way early this year” and that they will “be doing a lot of optimizations,” a move that “extends the buying period so there will be more time to optimize.”
This is not to say that all advertisers or ad execs are getting requests from clients to kick off sales early this year. While some marketers are aiming to lean into sales and roll them out earlier in the year to appeal to consumers ahead of the peak holiday shopping season, some are focused on trimming where they can now.
Some agency execs said that there’s simply more pressure from marketers on agencies to keep overhead as low as possible going into Q4. That might be why some agency execs say there are fewer pitches happening now: If marketers are aiming to save and keep overhead low, they may be less likely to want to move their business and start anew.
“Many brands that benefited from the ‘Covid bump’ are now seeing sales slip,” noted one ad exec who requested anonymity. “As a result, there’s a lot of scrutiny over working versus non-working dollars. By and large performance marketing is the focus. The more ‘traditional’ brand marketing is being trimmed on a number of accounts.”
“We’re being tasked to work with leaner budgets, be more flexible and rethink a lot of how we approach campaigns,” the exec continued. “This means smaller production budgets. We’re also focused on a lot of partnerships that bundle content and media to stretch dollars further.”
3 Questions with Lisa Odenweller, founder and CEO of DTC wellness brand Kroma Wellness
How does having celebrity investors, like Gwyneth Paltrow, and other fans like Jessica Seinfeld, Bobbi Brown and Amy Schumer tie into Kroma’s marketing strategy?
I thought if we could get highly influential people, whether it’s celebrities, business leaders [or] moms in the community, it could be our megaphone to the world. I had to get really creative and clever about how to raise money. I knew that [venture capitalists] were not going to fund us at this stage, nor did I really want that. I really had this vision of, could [investors] be our marketing. The buzz of the product and experience got out there and helped me bring together these investors. Because they were engaged with the product and the brand, they helped us tell the world. They got us, not only the megaphones for great press, telling their friends, plugging us into events, getting in front of the right people, [but] have been that marketing machine to give us an advantage.
Why were influencers and celebrities a key part of Kroma’s strategy?
All of my effort was in building those relationships with influencers, our investor community, celebrities, press, etc. Again, very non-traditional. I think where the mistake is, especially in today’s world, is these companies are becoming dependent. They come out of the gate dependent on paid media. So when the paid media [return on advertising spend] went [down], their whole strategy imploded. I never wanted to build a company dependent on that. Our success was grassroots, guerilla marketing — people telling people. That’s the most powerful type of marketing, but it’s also the hardest to do.
So with your current learnings, what’s next?
Now, I’ve got enough data to know what our ROAS is. Now, I’m ready to spend more. Let’s go get really good content. We run a very tight ship. It’s incredibly mindful about spend and we analyze everything. We look at every single expense and what the [return on investment] is. That’s why we’ve been baby stepping. We’re gonna be investing in building that influencer and ambassador channel. That will involve spending money on influencers, something that we haven’t had to do. [We’ll be] putting more money and investing significantly more in paid media because I have the data to know that it works. — Kimeko McCoy
By the numbers
Sustainability is becoming a bigger topic of conversation around marketing and brand purpose. While a number of agencies have lauded sustainability efforts as an advantage in the talent war or ramped up eco-friendly efforts for office returns, consumers expect brands to lead the way, according to new research from Morning Consult intelligence company. Find more key details from the study below:
- 8 in 10 consumers say major technology companies bear the responsibility to drive innovation in environmental sustainability practices.
- 7 in 10 consumers have never thought about the sustainability of a production while watching a movie or TV show.
- 23% of consumers who responded to the survey think their everyday shopping behaviors have a major environmental impact. — Kimeko McCoy
Quote of the week
“If you have a big open space or people are fighting for small conference rooms to get in, it’s kind of the worst of both worlds.”
— An agency HR director on the difficulties of returning to the office, using co-working spaces for the latest edition of our Confessions series.
What we’ve covered
- As the economy wobbles, advertisers and publishers at the top end of the market go more and more direct
- Lower match rates in data clean rooms are being given a much-needed boost
- How Mojo Supermarket’s founder broke the Madison Avenue-style advertising mold