What the Holidays Mean to the Heavies

By Zachary Rodgers

The holiday shopping season is officially out of the starting blocks, and the online advertising and marketing outlook is much improved over last year. Several studies released in November foretold a substantial increase in online spending this season, with merchants experiencing increases of 25 percent or greater during the first two weeks of November. Additionally, new research from Global Insight predicted a 16 percent increase in online ad spending next year.

That’s all good news, but the statistics don’t say much about what money is being spent on. What are the creative and production trends emergent in online campaigns? To get a sense of what’s really happening in online advertising, we called up seven industry veterans – working for both small and large firms — to ask what they’re seeing this year.

With each of these execs, we posed a question related to his or her area of expertise — whether it be e-mail, media buying and planning, or rich media — in an effort to shed light on this year’s holiday trends.

For Andreas Combuechen, chief creative officer and managing director of AtmosphereBBDO: What creative and sales trends have you seen this year? Are there any client examples that stand out?

Andreas Combuechen, CCO

From an online perspective in Q4, it’s all about retail. After all, the Web environment is the only retail channel that is expected to reach double digit growth this year. In the first few week of November alone, we’ve read that some online retailers have seen a 25 to 49 percent lift in sales.

But it’s not just about online sales. Comparison shopping is a key online activity, especially in November when consumers are making purchase decisions for holiday gifts. We’ve seen a lot of pot-sweetening (exclusive online offers/free shipping). We also feel that it’s important for marketers to get the message out there. Learning occurs, even if a consumer simply reads an execution without clicking. This can effect online, offline, telesales … etc.

What has stood out is Amazon’s offline effort, which encourages consumers to do their holiday shopping online. That’s good for the entire category.

Another of our clients, Cingular Wireless, stands out by offering something that no other competitor is: rollover minutes. What’s more, the company is sweetening the deal with an online, limited time offer. And to reach consumers during this frenetic time period, Cingular will break through with simple executions in which the brand emotionally connects with the target (stay tuned).

For Young-Bean Song, director of product analytics for AtlasDMT (a division of Avenue A): What online media planning and buying trends have you observed leading up to the holiday season? What have your clients been doing?

The first thing I have to mention is the rampant use of rich media. As broadband adoption has increased and brand awareness studies have been conducted, the discovery has been made that Flash, streaming and other rich media mechanisms clearly produce better results. Some of our clients served 90 percent rich media this year. A year or two ago, the proportion against traditional media was probably switched.

You’re going to see that even more in 2003. Another factor that will fuel the trend is that people surf and purchase while they’re at work, where T1 and cable connections are commonplace. There are now huge spikes in Internet usage during work hours and particularly at lunch.

Another interesting trend is in the number of days before December 25 that people stop buying online. In 2000, the drop-off hit 10 days before Christmas. In 2001, it occurred seven days before. The reduction indicates people are more confident in the shipping process. It probably won’t get much shorter, but I think there’s still room for some shrinkage. The Amazons of the world are so well trusted that people are willing to believe the promises made on retailers’ sites.

For Al DiGuido, chief executive officer of Bigfoot Interactive: How often should retailers be shooting emails to their lists this time of year? What unique issues are e-mail marketers facing this season?

Al DiGuido, CEO
Bigfoot Interactive

It’s not a strict matter of frequency. Holiday e-mail strategies should emerge from the data and the relationship a retailer has with each customer. The retailer who has been keeping good tabs on its transactions with customers is more apt to send e-mails that are contextually relevant.

A successful campaign might say to recipients, “If you had us ship gifts directly to your friends, neighbors, or relatives last year, we can give you the option to send to those same people again.” Clients are also making special offers to those who have been good customers throughout the rest of the year. This tells customers they’re appreciated.

If you get a message that has no relevancy at all, you’re unlikely to be interested or responsive to any e-mail from that source. Tuned-in marketers don’t waste their customers’ time with elaborate messages that miss the point. The successful ones are using the data are going to get opened, noticed and acted on.

This year, convenience and value are going to be a priority for consumers. Marketers should avoid the hard sell, focusing rather on the value their product or offering brings to the marketplace. Be of service to the customer.

This is a time of year everybody’s trying to steal business from each other. Many marketers are using the season to test messages from an acquisition standpoint and see if they can bring more customers in. Unlike print or TV, e-mail gives retailers an opportunity to test a variety of approaches to win customers.

For James Beriker, president and CEO of Search123: How would you characterize your clients’ use of paid search in the run up to the holidays?

We generally see an up-tick in searches on our network during the holidays. We do about three million searches a day; starting now, I think we’ll see an uptake in searches until around the 15th.

We monitor the keywords that are holiday related, and we advise them on the keywords they should be bidding on to get that traffic. However, our advertisers also have to step out to identify themselves and any search terms relevant to their business. And it goes without saying that our advertisers selling holiday goods and services will bid into the keywords.

“We monitor keywords that are holiday related, and we advise advertisers on the keywords they should bid on to get that traffic.”

As a matter of course, we let advertisers know what we’re getting lots of searches on. We tell them, based on the words we’re seeing. For example, if we see a lot of searches on wreaths, we’ll ask some advertisers if they sell wreaths. If so, we suggest they bid on those words. If there are common search terms related to wreaths that a wreath seller might also like to bid on, we’ll suggest those as well.

For Sarah Fay, president of Carat Interactive: Online holiday campaigns: What’s the scoop this year? What are your clients doing?

In general around the Web, I’m seeing a huge flurry of activity. There seems to be a sense of urgency about delivering messages. I’ve seen lots of pop-ups and pop-under formats with specific offers, which is a pretty good idea. Get somebody’s attention with an exact offer and purchase idea right there.

We have two clients with holiday programs. The biggest is Radio Shack, which calls this the golden quarter. We’ve been gearing up for it since about May. The toy market has become more important for them. Last year it was Jimmy Neutron. This year it’s the Zip Zap small remote control cars. For the second year in a row, we have developed an online game in partnership with WildTangent.

Last year, the program was a huge success. We succeeded in selling out the Jimmy Neutron cars, and we expect the same this year. We felt it was a great use of the interactive medium to get the more engaged type of buyer to play the game. Last year, we had about a million individual game plays. The average user spent 15 minutes with the game – pretty awesome.

For Elizabeth Cholawsky, SVP of marketing and product development for Commission Junction: What broad trends in affiliate marketing have you seen leading up to the holidays this year, and which affiliate programs stand out?

Elizabeth Cholawsky
SVP of marketing
Commission Junction

Performance-based marketing is dominating the affiliate marketing methodologies and taking an increasing share of the online budget of merchants this year. Objectives for affiliate marketing efforts are broadening as advertisers are looking more closely at new customer acquisition as a key determinant of their offer to publishers.

Paying a commission for a new registered user (lead) is generally associated with companies offering services (financial, dating, memberships, subscriptions). Historically, retailers and catalogers structured their commission offering as a revenue share model. Now this group is measuring lifetime value of their online customers and seeking to reward publishers (affiliates) for new additions to their database.

Another trend we have seen is in offer distribution techniques among the publishers. One technique gaining momentum is to insert CPA-based offers in the paid-inclusion search engines. During the busy holiday season this increases the advertiser’s ability to reach the consumer, therefore broadening their reach. The publishers may not infringe on the advertisers’ trademarked keywords which minimizes the concerns of advertisers that their affiliates are competing with them at the search engines.

eBay, Half, Zappos, The Back Country Store, New Line Cinema, JC Whitney, PeopleFirst, and Surefit SlipCovers are all successful programs, plus many others which are succeeding with pay-for-performance advertising.

For Brian Levin, president and co-founder of Mobliss: Does the festive season mean anything at all for wireless marketing?

Yes, on a couple of fronts. First, everyone’s looking for phones and other handhelds to be the gift du jour this holiday season – specifically the fancy new color phones that are being marketed. This is great, because it gives us more room to develop color, Java, and BREW applications. That’s one side of it.

Like any good marketer, we tailor the message for the medium and the season. We put a big push on our Family Feud launch, for example. (Editor’s note: Mobliss launched a wireless game in November, a version of the classic game show Family Feud, encouraging families to work out their seasonal bickering with phones.) It’s the kind of game you can play around the dinner table.

Another big marketing push for us is a property called “My snow report,” sponsored by Toyota 4-Runner. It gives regular updates on snow conditions regionally. We expect that to pick up this month.

Small Business Computing Staff
Small Business Computing Staff
Small Business Computing addresses the technology needs of small businesses, which are defined as businesses with fewer than 500 employees and/or less than $7 million in annual sales.

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