Seasonal Breakdown: Holiday 2023 – Add Connected TV to Cart in Q4

Q4 Performance Story

More Is More

We compared Connected TV holiday campaigns in Q4 2022 versus the same period in 2021. The key difference? Volume.

The 2022 holiday season saw more advertisers spending more on MNTN Performance TV last year. This commitment drove big gains across the board and delivered even better performance than the 2021 holiday season. Your key takeaway? Performance marketing is growing on Connected TV and is becoming a bigger piece of advertisers’ Q4 strategies.

To Be Early Is To Be on Time

It’s not just planning that needs to come sooner. Waiting to launch holiday campaigns until November means missing out on key audience and performance insights that might come in useful for Black Friday and Cyber Monday, and leaves ad revenue on table. It also gives campaigns time to build awareness and a wide enough audience pool for retargeting efforts later on.

Advertisers who ran their campaigns throughout Q4 (instead of just toward the back half) drove better performance than those who started their campaigns in November.

Don’t Pull the Brakes On Budget

Launching campaigns in October also gave advertisers better insight into shopper sentiment over this period. We tracked performance data weekly over the quarter and saw that ROAS spiked in the first week of November, suggesting that shoppers were in the holiday spirit early on and ready to spend.

ROAS and conversion rates continued to climb in the lead-up to Black Friday and Cyber Monday, before peaking the week of December 12th due to an influx of last-minute shoppers.

You may be wondering: how did ROAS in early November and mid-December outperform Black Friday? It comes down to ad spend. Advertisers’ budgets were lower during those weeks, yet our data shows that there is plenty of opportunity to drive revenue. Something to keep in mind this year.

Prospecting and Retargeting Are Better Together

For advertisers interested in generating results all along the sales funnel, the case for running prospecting and retargeting is clear. In 2022, advertisers that combined both performed better than those who only ran prospecting campaigns.

Which Connected TV Networks Were the Q4 Drivers?

• Sports networks produced notable performance for advertisers | When looking at key performance metrics like ROAS, conversion rates, cost per acquisition (CPA), and cost per visit (CPV), networks with sports-focused content produced meaningful results (see the full lists below). This is notable, considering sports programming has historically been associated with traditional broadcast television. Now that dynamic is changing, as more of the major players in streaming purchase sports programming rights. 
• ESPN2 performed best overall with holiday shoppers | While multiple sports-focused networks produced results for advertisers, one came out on top: ESPN2. The channel drove the best ROAS, ranked No. 5 in CPA, and was in the top 10 for highest conversion rate. Additionally, ESPN2 generated a low CPV, coming in below the network average.  
• The best return on advertising spend (ROAS) was found all over the map | Sports networks may have performed well across the board, but the channels that drove the best return on advertising spend were less predictable. The top five networks in this category—ESPN2, Adult Swim, Pluto TV, Cinemoi, and the MLB Network—offer a wide variety of content, indicating that engaged consumers can be found on a diverse set of networks. This serves as a good reminder that brands can benefit from taking an audience-focused approach to their holiday advertising strategy. 
• Top networks significantly outperformed benchmarks | Each of the networks that claimed the number one spot when it came to ROAS, conversion rate, CPA, and CPV performed better than the average for each metric category:

Top Performing CTV Networks Based On Key Metrics

Consumer Spend is Expected to Stay Strong During 2023 Holiday Season

Heading into the 2022 holiday season, advertisers were concerned. With inflation and interest rates on the rise, in addition to lingering supply chain issues, many brands prepared for a lackluster Q4. However, these fears didn’t come to fruition—despite many indicators that consumer spend would slow down, last year’s winter holidays actually drove year-over-year (YoY) growth.

Key Insights: Holiday 2022

While inflation certainly impacted holiday spend in 2022, it didn’t stop consumers from getting their seasonal shopping done. According to the National Retail Federation, holiday sales in November and December 2022 topped out at $4.9 trillion, making for a 7% increase compared to 2021. Additionally, retail sales during the same time period last year hit $936.3 billion—a ~5% YoY growth. Though this increase may not have been as steep as between 2020 and 2021, in comparison to pre-pandemic years, the 5% jump in 2022 was significant.

Consumers Spent Big During the Cyber Five

The Cyber Five—Thanksgiving Day, Black Friday, Small Business Saturday, Cyber Sunday, and Cyber Monday—experienced notable growth in 2022, contributing heavily to the amount of spend for the season. A reported 196.7M people shopped during the five-day period from Thanksgiving to Cyber Monday. Consumers spent $325.44 on average on holiday-related purchases, up 8% from 2021.

Of the Cyber Five, Black Friday was the biggest shopping day—U.S. retail sales grew 12% YoY (excluding automotive), per Mastercard SpendingPulse™.

According to Adobe Analytics data, over the course of the Cyber Five, consumers spent most on the following categories: toys, jewelry, sporting goods, apparel, books, electronics, computers, and appliances.

Overall Holiday Retail Spend Increased

Even amid a fluctuating economy, overall retail spending during the holiday season (November and December) increased in 2022—hitting ~$1270.79B, a 4.8% increase from the previous year.

While the YoY retail growth wasn’t as strong as the previous two years, the bump in spending in 2022 was significant, indicating that consumers are still willing to spend during this season.

What To Expect in 2023

Those economic concerns—inflation, rising interest rates, etc.—may have certainly carried over into this year, but the 2023 holiday season is poised to once again drive significant business for brands of all shapes and sizes.

Gift Cards Reign Supreme

Numerator reports that the majority (78%) of consumers will purchase gifts for Christmas in 2023. This year, gift cards top the list of intended Christmas presents—69% of people said they plan to purchase them. Following this are toys & games (49%) and apparel (49%).

The Economy Continues To Impact the 2023 Holiday Outlook

The unsteady state of the economy is still at the forefront of advertisers’ minds, especially regarding the 2023 holiday season. CNBC’s recent Supply Chain Survey indicated that 71% of respondents are concerned that consumers will cut back on holiday spending due to inflation. As a result, retailers are ordering 43% less inventory than they did in 2022.

Continued economic uncertainty should certainly be a top consideration for advertisers as they prepare for Q4. That said, things might not be as bleak as predicted. To start, inflation is cooling down. CNN reports that in June 2023, inflation decreased to 3%—the lowest it’s been since March 2021. And, despite massive layoffs in the tech space throughout the first few months of this year, unemployment is near all-time lows, with 209,000 nonfarm jobs added to the market in June 2023.

”The economy is defying predictions that inflation would not fall absent significant job destruction,” said New York Economic Club Director Lael Brainsard. “Just today, we saw new and encouraging evidence that the U.S. economy is on the path to moderate inflation accompanied by a resilient jobs market.”

Another good sign for advertisers: consumers are still spending. In June 2023, retail sales in the U.S. grew for the third month in a row. Not only are people making purchases, they’re buying more “non-essential” products. Per eMarketer, “sales of furniture and home goods, as well as electronics and appliances—categories that were hit hard by declines in discretionary spending—also rose in June.”

Should these trends keep up, total retail sales could grow by ~6% in Q4 of this year, in comparison to the same period in 2022. E-commerce retail sales in particular might experience a notable bump—increasing 10.3% YoY.

A Full-Funnel Approach to CTV Advertising

As CTV increases in popularity with viewers, more brands are adding the channel to their marketing mix. While traditional television was historically used by advertisers as an awareness play, CTV has transformed the TV advertising landscape, making the channel more accessible for a wider variety of brands. Advertisers can use television as a digital performance channel, much like search and social media, to reach consumers at all stages of the funnel.

Many Advertisers View—and Use—CTV as a Performance Channel

In a survey conducted in partnership with Advertising Week, MNTN found that while 81% of marketers said they use Connected TV to raise brand awareness, two-thirds still classify it as a performance marketing channel. And many brands use CTV to drive specific outcomes—over half of respondents said they use the channel specifically to generate measurable web visits, conversions, and revenue.

How to Build a Strong Full-Funnel CTV Holiday Ad Campaign

Based on first-party data from the 2022 holiday efforts of some of MNTN’s top performing advertisers, here are our recommendations for how to make the most of your 2023 holiday campaigns.

Use August and September To Test and Learn

The “Holiday Season” may not technically get into full swing until November, but any strategic advertiser knows that campaign planning needs to start long before then. Use the months leading up to Q4 to prepare for what’s to come during the holidays by:

• Testing a wider range of audiences
• Leveraging audience segment reporting to discover audiences that drive ROI
• Applying those learnings across platforms to maximize Q4 performance

Blend Q4 Prospecting and Retargeting

As mentioned previously, advertisers who launch prospecting and retargeting concurrently drive better performance than upper-funnel efforts alone.

By running both types of campaigns during the holiday season, you can ensure you’re reaching engaged consumers at all stages of the funnel.

Use Evergreen Campaigns To Bolster Seasonal Performance

Brands can maximize key business moments (like the holidays) by leading into these events with evergreen advertising campaigns. One advertiser, Rumpl, ran an evergreen campaign leading up to Q4 of 2022, after not doing so the year before. With an evergreen lead-in, their 2022 holiday efforts produced a ROAS that was 15% higher than the year before and it helped to drive a 39% increase in revenue YoY.

Revisit Your Creative Strategy

A winning holiday campaign isn’t just about quality creative—it’s what you do with that creative that moves the needle. To help you make your upcoming holiday campaign the absolute best it can be, we analyzed the top 25% of MNTN advertisers to see what they’re doing differently that sets them apart.

Performance Perishables: Your Creative Has a Shelf Life

Even the most top-shelf creative has a use-by date, but that date depends on your campaign type. Our performance data reveals that seasonal creative has a shorter shelf life of 10 days, on average, versus evergreen creative’s 59-64 days, based on ROAS and conversion rates. Make sure you have enough creative variations on hand to fuel your creative pipeline for your holiday campaign based on these industry averages:

Retargeting creative, however, is an exception to the rule. It tends to outlast other creative types, especially as you continue to refresh your retargeting pool.

You can boost this performance even further when you run both prospecting and retargeting campaigns together.

The More Creative (Assets), the Merrier

Given the expiration dates of both evergreen and seasonal creative, you’ll need to have enough creative variations on hand to swap out, too—and there’s a sweet spot for the optimal number of assets. When analyzing the same dataset of advertisers, we saw that advertisers with 3+ creative variations delivered higher ROAS and lower cost-per-visits (CPVs).

Adding creative variations to your campaign toolkit is as simple as a few switches to some —or different combinations—of these elements, to tailor to your different audience personas. These include (but are not limited to):

• CTA
• End title card
• Voiceover 
• Ad length
• Re-editing the order of your ad

These creative variations in your campaign can aid in boosting performance—with the added benefit of providing intel that can be applied to your evergreen campaigns post Q4, too.

Ready, Set, Launch

Which way do you want the performance pendulum to swing this Q4? Our first-party data set the scene on what last year’s holiday advertisers did to move the needle on Connected TV, and how you can replicate the same approach for this year across the funnel. Don’t forget—there’s much power in utilizing these learnings to your evergreen marketing strategy for holiday gains, year round.