Seasonal Breakdown: Back-to-School Spending Is Back

Students don’t usually return to classes until August or September, but research indicates that some consumers start on their back-to-school (BTS) shopping as early as May or June. And purchases really ramp up in July and August. Last year’s BTS season may have been hit hard by inflation, but in 2023, it’s looking like this spend is making a comeback.

Key Insights: Back-to-School 2022

Inflation Affected Consumer Purchasing Behaviors

An uncertain economy played a huge part in the dip in BTS spending last year. In 2022, for the first time since 2019, planned BTS expenditure decreased year-over-year (YoY).

Aside from impacting overall spend in 2022, inflation affected where and how people spent their money. eMarketer reports that consumers combated inflation by buying cheaper versions of items, spending more to buy usual items, and buying less of some items, among other strategies.

In-Person Shopping Was In Again

For obvious reasons, 2020 and 2021 saw a notable increase in online BTS shopping compared to previous years, while in-person purchasing experienced a dip. Last year, however, the majority of those who did purchase BTS items chose to do so in person, as opposed to online. With the world returning to some form of pre-pandemic “normalcy,” nearly half of BTS consumers said they’d budgeted for in-store shopping in 2022.

Electronics were top of mind during the 2022 BTS season—an estimated $12.5B was spent on these types of items.

Back-to-College Spend Exceeded Expectations

The “back-to-school” moniker for this season may conjure images of three-ring binders, crayons, and non-skid tennis shoes for P.E. But it  isn’t solely for kids—back-to-college shoppers are also a key segment of this audience. Despite the aforementioned unsteady state of the economy and inflation, an estimated $73.9B was spent on back-to-college items in 2022, up from $71B in 2021.

Back-to-college significantly contributed to overall expenditure for the 2022 BTS season. In fact, when counted together, planned back-to-college and back-to-school spend actually increased year-over-year (YoY), hitting a record high.

Consumers Spent More on Back-to-School and Back-to-College Than on the Winter Holidays

The winter holidays have historically been seen as the best time for advertisers to drive meaningful business, but in 2022 a different seasonal moment stood out. Per the National Retail Federation, consumers actually spent more on back-to-school and back-to-college than on the winter holidays.

Advertisers should take this finding into consideration when planning their yearly budget allocation—BTS and back-to-college might turn out to be as beneficial as the winter holidays for driving business.

What to Expect in 2023

Near-Perfect Attendance For Back-to-School Shopping

While the economy is still in flux, the large majority of people have indicated that they will shop for BTS needs in 2023. A recent survey from Cint reports that 96% of consumers will make BTS purchases this year.

This should serve as an encouraging sign for advertisers as we head into the peak months of BTS spending.

Most Back-to-School Spending Will Happen in July and August

While some consumers will get a head start on BTS shopping, the majority plan to spend in July and August. 41% of people reported that they’ll shop for BTS items in August, while 34% said the same for July.

Back-to-School Scores Top Grades Among CTV Advertisers

Knowing that the vast majority of consumers will spend on back-to-school in 2023, we were interested in advertiser performance during this season, specifically on Connected TV (CTV).

We pulled first-party data from MNTN’s Performance TV platform, which uses an AI-driven optimization engine to determine bids and inventory decisions based on performance marketing goals (like return on ad spend, cost per acquisition, etc.). Analysis was limited to advertisers with active campaigns reporting performance data for over 90% of the total days in June-October for 2021 and 2022.

Here’s what we learned:

Brands who advertised on CTV during the BTS shopping season saw significant year-over-year (YoY) performance growth, with conversions increasing by 60%. On top of this, they reached 41% more users, had 39% more Verified Visits, and pulled in 14% more revenue.

To further understand what worked for CTV advertisers during this season, we analyzed data from a specific segment of MNTN customers whose industries historically experience a lift during the back-to-school season. Looking at the time period of May 30-September 9, 2022, we dug into the performance of 69 Performance TV advertisers from the following industries: accessories, apparel, beauty, consumer electronics & technology, education, home & garden, and shoes.

Prospecting and Retargeting Are Better Together

Advertisers who concurrently launched prospecting and retargeting drove better performance than those who ran one type of campaign. Running prospecting and retargeting campaigns together resulted in 198% (almost 2x) higher revenue than prospecting only, and 50% more than retargeting only during the back-to-school period.

Advertisers Benefit From Promoting Both Low and High-Ticket Items

From July 23 to August 10, 2022, MNTN’s data showed that average order value (AOV) was much lower than the rest of the reporting period (May 30 – September 26, 2022). However, during this time, conversions trended upward. This indicates that a larger amount of lower ticket items were being purchased.

From mid-August onwards, there was an inverse relationship—AOV increased but conversions were lower, suggesting that consumers spent more on higher-ticket items.

These findings show that it’s vital for advertisers to promote both high and low-ticket items/services in their creative messaging. To remain top of mind with potential customers, brands should create variations of these advertisements based on when shoppers are in the market for each type of product.

Brands Offering Home Goods Saw the Strongest Return on Advertising Spend

When looking at performance by industry, MNTN advertisers that offer home goods saw the best return on advertising spend (ROAS). Here’s how the rest of the list rounded out:

A Look at Which Networks Produced Top Performance for CTV Advertisers

This list supports the aforementioned findings on estimated consumer spend by product category during BTS in 2022—electronics, apparel, and shoes were among the top four.

We also took a look at network data to see which specific CTV channels drove the best consumer engagement. For this analysis, we focused on MNTN customers who had an obvious tie-in to BTS and could benefit from running campaigns leading up to and during the season. We examined relevant brands in specific industries, including: Beauty and Fitness, Books and Literature, Career and Education, Computer and Electronics, Fashion and Apparel, and Home and Garden.

The Big Takeaways:

• The best return on advertising spend (ROAS) isn’t exclusive to one type of network. Networks with considerably different content offerings—Discovery Life, Hulu, Pluto TV, ESPN 3, and A&E—drove top ROAS numbers. This suggests that advertisers might not be able to predict where their most engaged consumers will be. So, it’s in your best interest to diversify your ad spend, as opposed to allocating entire budgets to one type of channel or another.
• Discovery Life performed best overall with BTS consumers. The Discovery Life channel not only produced the best ROAS, it also generated the highest conversion rate and lowest cost per acquisition (CPA). Brands who want to bolster their BTS efforts would be wise to target consumers on this channel. 
• Pluto TV produced a high number of impressions and conversions. A large number of impressions doesn’t always correlate with the number of conversions, but in Pluto TV’s case here, it did. The AVOD channel ranked among the top 5 networks for both impressions and conversions—leading to a conversion rate that was well above the group average.

Top Performing CTV Networks in Regards to Key Metrics

For Brands, Back-to-School Means Back-to-Results

With 96% of consumers planning to spend on back-to-school items in 2023, this season is a veritable smorgasbord for advertisers. Not only will BTS shopping be back in full swing, but back-to-college shoppers are also a strong segment that advertisers should consider strategically targeting. Despite inflation affecting overall spend on BTS in 2022, brands who advertised on CTV were able to drive meaningful performance. Advertisers who want to step up their CTV efforts during the BTS season in 2023 should find an ad solution that has the capability to target viewers on a wide variety of streaming networks.