I recently joined a PPC Town Hall with Googler Chris Moreno (director of eCommerce insights) and the well-known PPC’er Fred Vallaeys.

We discussed how the holiday season in 2021 would be different from past years, and I thought it would be interesting to bring this to you in a written format. I have expanded on some of the things in the Town Hall video, but there are plenty of things I have not included—so the Town Hall is well worth watching.

Without further ado.

We have been through a lot over the last year and a half. Some countries have been through more than others, and some countries/states are still battling through the thick of it.

It will be interesting to see how people spend their time and money compared to the COVID-19 days.

In the US, we have so many states that handled COVID-19 differently. It’s almost the same as every country in Europe.

In Europe, we saw people push their vacation time into August. Where July is usually the worst month of the year for eCommerce, this was extended into August, meaning that compared to last year, people:

  • Spent money on vacations instead of on their homes.
  • Took time away on vacation instead of buying things online.

If we’ve learned anything from 2021 so far, we can’t compare our numbers to 2020. That’s not good.

Benchmarking is hard in 2021

Benchmarking is difficult due to the difference between 2020 and 2021.

Moving into 2021, we knew one thing. We couldn’t use last year as benchmarks for anything.

Lockdowns, consumer behavior changes, supply chain restrictions, and a bunch of other factors affected dozens of main industries.

You should be careful when setting targets based on last year. But you know that already.

What you need to be ready to do is change your targets on the fly based on what you see in the market.

Things are Unpredictable, So Don’t Predict

We all have to predict to some degree.

Predict how much of a specific product to order.

Predict what your promotions should be this year.

So, no, we can’t simply not predict. That’s not good advice.

But we can try to limit our mistakes.

If you have been loyal to the Black Friday concept in past years and only run promotions on Black Friday itself, then this might be the year to expand.

For most eCommerce businesses, Black Friday is a substantial part of their revenue/earnings. Betting on something, just to watch it not work on the day because something in consumer behavior has changed, might be too much to risk.

Maybe this is the year you run your promotion as a Black Week promotion?

Stock Levels Are Going to be… Interesting

Showing how the stock levels might dry out way before the end of Q4.

Reviewing your in-stock levels will be a factor that we have never really done much of before. Most of our clients have always had an unlimited supply—or we’ve never been near levels where we literally had to turn off the ads.

Now we’ve sold items with either a limited quantity set or where we had to sell everything (i.e., Christmas calendars) before the end of the season. These things are normal.

What’s not normal is running out of popular products that were meant to sell through December on Black Friday.

We recommend having a plan for how to work with limited stock products.

Review what in-demand products you have a limited stock of and have an overview of the sales velocity. Meaning, you want to know if you’re trending toward selling out of the items before Christmas.

Get the Most of Smart Bidding and Smart Shopping

The questions we covered slightly but didn’t get all the way to the bottom were:

  • How well does Smart Bidding handle seasonality?
  • Do we have new account structure recommendations?
  • In what way should we set targets?

Our thought on the topic is that a general uptick in seasonality is handled well by Smart Bidding.

We think the biggest mistake most people make with Smart Bidding and seasonality is not to give another look.

When you manage bids manually, you conduct in-depth analyses weekly. When you run Smart Bidding, it’s like most people just stop doing this.

With your weekly analysis, you look at whether the performance (high/low ROAS and revenue) fluctuation is due to anything in particular. You might decide that a decrease in ROAS isn’t too alarming and that you don’t decrease your bids.

You might see that your mobile traffic isn’t converting well, so you send a note off to your eCommerce team to revise mobile UX (or simply check that your tracking is working on mobile).

A lack of insights from weekly in-depth reviews is the biggest flaw in running Smart Bidding, which is a problem with PPC specialists, not Smart Bidding itself. 

Here are 3 principles to make Smart Bidding work for eCommerce.

Smart Bidding Constricts to Hit ROAS Targets

Smart Bidding works by decreasing your bids on individual search terms—explaining it very simply—but if there is a group of a million searches, then Smart Bidding will decrease exposure to search terms that have a low ROAS.

Smart bidding will decrease the bid for low performing keyword in terms of ROAS.

One of our best techniques for high season is to boost all keywords—including the keywords that usually don’t work.

Smart Bidding’s best ability is the ability to set accurate bids at the search-term level, meaning that you don’t have to add a search term as a keyword to your account to set a bid for it.

That’s powerful.

It also means you can have a lot of shadow search terms that your keywords should be triggering. But Smart Bidding had decreased the bid for those search terms due to low historical ROAS.n

Smart Bidding waits for historical performance, but if you aren’t getting any clicks for these shadow terms, then they will forever be shadow terms.

This is where shocking the system comes into play.

To tell Smart Bidding to release the shadow terms, you can do one of two things:

  1. Move to manual bidding for a week.
  2. Change your ROAS target.

I will never argue for switching back to manual bidding completely. I am personally against anyone with less than stellar PPC skills running bidding manually.

This leaves us option 2): Change your ROAS target.

Often, you need to decrease your target by 20–50%. But at the same time, note that setting a Seasonality Adjustment doesn’t help with shadow terms. All data during this phase is ignored.

Smart Shopping is OKAY, but Shouldn’t Stand Alone

As I’ve said before, I believe Smart Shopping is great for many advertisers. Surprisingly few advertisers have figured out how to set up more complex Shopping setups, so Smart Shopping has been great for many.

However, it suffers from the same problem as Smart Bidding. Never let it stand alone.

You should back Smart Shopping up with one or two regular Shopping campaigns where you can do the following:

  • Exclude low-performing products from Smart Shopping, and control them with manual bids.
  • Increase bids for regular Shopping, so shadow keywords/products can gain exposure.
  • Work with hand-picked audiences to boost performance.

Read our full article on Smart Shopping for more insights.

This Holiday Might Be Different—Be Ready to Adapt

I’ve highlighted some of the ways that the holiday season might be different this year. But it might not. Or it might be.

That’s why you need to be ready to adapt to what you’re seeing. If you’ve done this for many years—like me—now is not the time to blindly do what usually works. Keep your eyes open, and be ready to take action if you feel it is needed.