2024 is already set to be a holiday shopping season like no other. With just 27 days between Thanksgiving and Christmas, this is set to be one of the shortest holiday shopping seasons in recent memory. NetElixir had warned retailers to approach this year’s holiday season with ‘cautious optimism’. Results are still trickling in from last week’s Prime Day. However, from what we are seeing so far, it is seeming to be a modest start to the season. Here’s what we know so far.
As Ad Spend Spikes, ROAS Falls Short
The gap between ad spend and performance was evident in this year’s two day Amazon event. While many merchants saw a significant increase in their ad investments, their Return on Advertising Spend (ROAS) dropped noticeably. Ad spend increased by as much as 70%, but the returns did not align with this aggressive investment.This trend points to a more competitive advertising environment, where higher costs didn’t translate into proportionate sales growth.
Modest Order Growth and Rising CPC Inflation
We saw moderate order growth during this year’s sale, about 8-9% compared to last year. However, this increase was not enough to offset the rising ad spend and the inflation in Cost Per Clicks (CPCs).
The cost to advertise during Prime Big Deal Days saw a significant surge. The two-day average reflected a 26% year-over-year CPC inflation. This rise in CPCs, coupled with only modest order growth, means advertisers had to spend more to capture the same level of consumer attention.
Port Strike and Other External Factors at Play
Several external factors might have dampened the event’s potential impact:
- Weather disruptions: Adverse weather conditions, particularly in Florida with Hurricane Milton, may have influenced consumer behavior.
- Election season uncertainty: With upcoming presidential elections, some consumers may be holding back on discretionary spending.
- Labor strike concerns: Though a major port strike was called off just two days before the event, earlier apprehensions might have impacted retailers’ momentum going into the sale.
A Moderate Beginning to the Holidays
This year’s Prime Big Deal Days delivered a moderate performance, but still showed some growth. As we look ahead, retailers will need to fine-tune their strategies for the rest of the holiday season, balancing ad spend with a clear focus on profitability. With unpredictable factors still in play, the coming months will reveal whether this moderate start is a sign of broader trends—or just a slow beginning to a more promising holiday season.
Is your holiday strategy ready to overcome rising ad costs and shifting consumer trends? Connect with one of our experts today to ensure your campaigns drive profitable growth all season long.
More Resources:
NetElxiir’s E-Commerce Holiday Readiness Calendar
NetElixir Original Research: Zero Click SERPS: A New Era of SEO
Navigating the 2024 Holiday Season: Key Insights from Google’s Think Retail 2024 – NetElixir
