Key Considerations for Your 2023 Digital Marketing Plan

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Retailers like you survived Cyber Five and can now breathe a little easier. But, without a doubt, your 2023 planning is looming overhead and is subject to change as Cyber Five results continue to roll in. Today we will cover important considerations to keep in mind as you hash out budgets and adjustments to set your 2023 digital marketing strategy up for success.

CYBER 5 RESULTS AND WHAT IT MEANS FOR 2023

Going into Thanksgiving weekend, one could see a wide array of forecasts for eCommerce sales, anywhere from down YoY (year-over-year) by 2-3% to up YoY by 10%+. These conflicting forecasts spurred from experts’ differing perspectives on how the economy might impact holiday shoppers this year and where they will spend, if at all.

Ultimately, results ended in a pretty solid position, with Adobe reporting $35.3B in total eCommerce sales over Cyber Five, or 4% YoY growth. This growth was fueled heavily by retailer discounting, which helped offset the effects of inflation and rising lending rates. In the top gifting categories of toys and electronics, shoppers saw average discounts of 34% and 25%, respectively.

A few interesting trends emerged when we looked at our paid search data. Some of Adlucent’s top retail partners saw average results, with clicks down on average by 7%; CPCs were up by the same amount to offset that, so spend was flat. 

Despite the drop in clicks, CTR (click-through rate) was up 14%. Google trends data also shows that searches for inspirational type terms are down 5-10% this year, all coming together to indicate that while demand was relatively strong this year, people needed to look less for what they wanted. 

We saw lower search volume while still garnering revenue growth due to less ROI (return on investment) on stocks, fast campaign pivots, starting over with a broader, inspirational type search, and stronger discounts that cut out some comparative shopping.

Our clients also saw a 14% YoY increase in AOV (average order value). Even with heavy discounting and robust promotions running, shoppers were more likely to load up their carts or splurge on the more expensive version of that special gift because of the savings they were seeing. Keep in mind that with inflation, the cost of goods raised over the last several months, causing items to be more expensive than the previous year even after marginally better discounts were applied.

PLANNING YOUR BUDGET TO HIT YOUR GOALS

As brands look into forecasts for 2023 and align on budgets, there will undoubtedly be many arguments for cutting ad spend to limit costs with the expectation of falling demand. 

While controlling costs is vital, and it would be foolish to argue against that blindly, there are two fundamental principles to keep in mind and be ready to help defend against overzealous cuts.

PERFORMANCE Advertising CHANNELS

• If you’re hitting your performance marketing goals, you should keep fueling the fire. Whether your brand is focused on ROAS, margin, or other directly measurable KPI, you should push for budget fluidity that allows you to flux with demand and keep ad spend up if you can bring in the revenue.  
• Make sure you’re bringing to the table the data that helps support this argument for your brand and can show a history of generating additional income with increased ad spend and the ability to make relatively quick changes in spend, as necessary. 
• This flexibility flows both ways and may mean spending less if the demand isn’t there. Ultimately, you want the flexibility to spend if warranted and not just cut budgets because it seems like what should be done.

INCREASE SPEND

• The philosophy of increasing spend during a recession is widely written about by experts at HBR, Wharton, IPA, and numerous others.
• Interestingly, increasing spend during a recession sees an average market share increase that is significantly greater than competitors, particularly during the recovery phase. 
• The data here suggests a unique opportunity to increase share of voice as competitors pull back and their messaging becomes quieter. 
• Remember, messaging needs to be more relevant and on-brand than ever if you’re pushing it out to consumers who are more reticent to spend than they were previously. This also needs to be backed up by your value props and brand identity.  

Keep these tenets in mind when determining budgets and plans for your upper funnel channels like digital video, social, and even CTV. Check out this previous piece for more info on how to market effectively during a downturn.

IF FORCED TO CUT, KNOW HOW TO LIMIT DAMAGE

If you are forced to cut back spending in your 2023 digital advertising, it’s important to know how to minimize the negative impact on your program and where to make cuts that will least impact your bottom line.  

We’ve successfully employed the following three digital marketing strategies to help reduce wasted ad spend: 

1. Focus on high LTV (lifetime value) consumers:

• We’ve developed a proprietary technology called Adlucent Index™ that allows our advertisers to assign higher valuations to new consumers they know have a greater propensity to return and, thus, a higher LTV. Using this tool, we prioritize these tier 1 customers and can reduce spend on those likely to buy or unlikely to be repeat purchasers.

2. Minimize cross-channel frequency.

• We also recommend testing cross-channel ad serving frequency to find a minimum viable threshold at which CVR is maximized vs. the incremental cost of impressions and clicks. By limiting the ads served to each individual to this minimum level, you can spread your budget further and reach more new customers while still trimming from the top.

3. Eliminate waste in marketing channels that are not as targeted.

• Lastly, any channel that doesn’t allow you to hyper-target your audience and isn’t seeing favorable CPCs (cost-per-clicks) or CPMs (cost-per-mille) should be teased out with a fine-toothed comb and cut as necessary. There’s a time and a place for mass market messaging, but it’s harder to justify in less favorable conditions.

Conclusion

Several factors should be incorporated into your 2023 planning, and this list here is by no means exhaustive. Make sure your teams have adequate budgets to support your goals while at the same time finding ways to eliminate more wasteful spend.  

In parallel, assess the myriad of changes and digital marketing trends in real time to continue to create opportunities and headwinds for your program. If all of this is making your head spin, and you want to talk to the experts at Adlucent to get your feet back on solid ground, reach out today!

Brad Costella

Brad is a Senior Director of Strategy at Adlucent. He is a strategic, data-driven, solutions-focused marketing leader with 10+ years of experience in omni-channel digital marketing and customer acquisition. He has a passion for turning insights into actionable strategies that improve real world outcomes for advertisers and customers. He believes that success comes from finding and striking the sweet spot where customer's needs intersect with a brand's value and goals.