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Holiday Season Advertising Trends That Will Impact Advertisers in 2017

featured image- Q4 2016 FAB retail trends
This article originally appeared on IBM’s THINK Marketing blog.

The 2016 holiday season was a banner year for retailers. With $1 trillion in sales, Q4 presented a phenomenal opportunity for capturing revenue. As indicated in a recent benchmark report of Nanigans advertisers, social channels like Facebook, Instagram and Twitter helped marketing teams drive new and repeat purchases throughout the entire quarter.

The data from these ad campaigns show that next-level advertising strategies such as employing dynamic ads, migrating to mobile and investing in mobile video paid off in Q4 2016. These insights don’t just apply to last quarter, and retailers who evolve their ad campaigns to incorporate these trends will likely see revenue growth in this quarter and beyond.

Ad spend and purchase rates grow

Q4 is always a busy quarter for retailers due to the holiday shopping rush. So it’s no surprise that e-commerce advertisers also saw higher purchase rates last quarter. Compared to Q4 2015, those returns were significantly higher across a same-advertiser set. Additionally, return on ad spend (ROAS) also increased in Q4 2016.

Ecomm ROAS and purchase rates - Q4 2016 FAB retail trends

This revenue growth doesn’t have to end at the conclusion of Q4. Marketing teams can continue this trend by continually engaging new and returning customers who made holiday purchases. Turn these consumers from one-off purchasers into loyal customers by retargeting them with ads on sites like Facebook, Instagram and Twitter. Offer purchase incentives such as limited time sales or exclusive coupons. Remember, those Q4 buyers were shopping for items that were intended as holiday gifts. To encourage customer loyalty among those shoppers, promote products that are relevant to them and their demographic, not just their gift recipients.

Shoppers and advertisers go mobile

Desktop advertising remained vital for online retailers in Q4, but mobile continued to capture a growing share of their Facebook ad spend. Across a same-advertiser set of e-commerce companies using Nanigans, mobile ad spend grew 23% year-over-year in Q4 2016. This trend follows acceleration in mobile-first or mobile-only customer shopping habits, which have positively impacted downstream returns.

Mobile shopping - Q4 2016 FAB retail trends

The mobile shopping trend is likely to continue growing, with over $335 billion in mobile revenue projected for 2020. Advertisers need to meet consumers where they shop. This means increasing mobile advertising spend is vital for retailers who want to drive revenue not just during the holiday season, but for 2017 and beyond.

Mobile video ad spend hits all-time high

Mcommerce wasn’t the only booming mobile trend of Q4. Mobile video ads among Nanigans advertisers hit an all-time high. 18.9% of mobile ad spend in North and South America was allocated to video ad formats, representing a 20% quarter-over-quarter increase.

mobile video ad spend - Q4 2016 FAB retail trends

Video has long been a digital advertising staple for retailers. The visual, engaging nature of this ad format is perfect for communicating product appearance, brand style, and voice. However, e-commerce advertisers need to make sure that their videos are also equipped for viewing on smaller mobile screens if they don’t want to be left out of this continuing trend. Try following video creative best practices that resonate loudly on mobile devices, such clear and concise messaging, optimizing for muted sound and bold, eye-catching visuals.

Dynamic ad adoption booms

Facebook’s dynamic ads continue to provide advertisers with a powerful way to promote individualized ads based on customer behavior. Across Nanigans advertisers, the share of all Facebook ad spend that was allocated to dynamic ads increased 164% from Q4 2015.

dynamic ad spend- Q4 2016 FAB retail trends

Retailers who haven’t yet explored the potential of Facebook dynamic ads are missing out. This versatile ad unit helps advertisers capture more revenue by intelligently promoting the most relevant products and services to customers on any device. Dynamic ads are a great way to reach shoppers who may have researched particular products by retargeting them with ads featuring those products or similar items. This powerful retargeting ability isn’t just valuable to retailers during the holiday shopping season, but also for year-round revenue growth.

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