WARNING: Election Week Could Sink Your Ad Performance!

[00:00:00] Richard Gaffin: Hey folks, welcome back to The Ecommerce Playbook Podcast. I'm your host, Richard Gaffin, Director of Digital Product Strategy here at CTC. And I'm joined today, which when this is coming out, this is Halloween itself. I'm joined by our CEO, Mr. Taylor Holiday. Taylor, what's going on, man?

[00:00:15] Taylor Holiday: Well, happy Halloween to you all, as well as happy one-year-old Birthday to my daughter Jacqueline, my one-year-old Bernadudo who is turning, turning one today. So, you know, big day. And also, as you may have seen from the headline of the episode, this really officially kicks off. We've got election week here, Richard.

[00:00:34] Richard Gaffin: Right. It's true. Election week was right around the corner. Next Tuesday, And which means that this, this Halloween, and here's our little segue for you is one of the spookiest on record for those of us in particularly in the digital ad industry and in e commerce. And of course, a lot of that has to do with the sheer volume of political spend that's going to be pouring into the meta platform.

But what we wanted to talk about today is exactly what you should be looking out for over the course of these next few days into. Into the day of the election itself. So Taylor, let's let's jump into some, I don't know, some data points, just some, some things that we're seeing early on here going into the week.

[00:01:10] Taylor Holiday: Yeah, so we just want to remind you all, as we head into this week, that the data that we shared about this election season was that Despite all of the narrative around spending, CPM is rising competitive spending, and we're going to talk about some of those today, it's actually this week, the week of the election itself that tends to drive the most disproportionate performance in 2020 for context, we saw a 20 percent decline in new customer revenue and a 50 percent decline in AMER.

So that is a massive change just the week of the election. And so the hypothesis is not only is there a competition problem in terms of the amount of energy going into these last days, but it is also about the attention of the consumer. We are all sort of captivated by the final stages of what has been a very intense election season.

You've got the big rallies happening at Madison square garden. You've got every podcast imaginable hosting these these final candidates. And so. This week, the eyes of the country are off the shopping portions of the internet and onto the media and consideration for their vote upcoming next Tuesday.

So this is our warning to you to remind yourself about the lull that it is this week and the corresponding energy that will follow as we move through it into a focus on Black Friday, Cyber Monday. We will move quickly past it, but this week could be tough.

[00:02:39] Richard Gaffin: right. Okay. So then let's remind the folks of exactly what we should be doing over the course of these next 4, 5, 6 days to both prepare for the election, then prepare for sort of the aftermath. So, particularly you share some data with me around, Okay. the idea of like, if you're excluding swing states from your spending, perhaps like that type of thing. Like, let's talk a little bit about that, that sort of approach.

[00:03:01] Taylor Holiday: Yeah, we're gonna we'll share these in the show notes. But Eric Seifert, who's one of my favorite follows on Twitter, shared an awesome graph about the weekly ad spending on meta and Google platforms per eligible voter. So think of this is like sort of a frequency consideration for swing states. And the blue lines in this graph that we see here are representative of a substantial increase in the amount of spend per active voter in each of these platforms, moving up to 2 to 3, almost 3 X.

The amount of money of weekly ad spending per eligible voter. So you're getting a ton of delivery into those swing states. And then randomly there's a competitive Senate race in the sparsely populated Montana that has received significant spending for a competitive seat there. So if you are in those states, Michigan, Ohio, North Carolina, Pennsylvania, you're going Arizona, Nevada.

Those are the states where there's going to be a disproportionate frequency into the feeds of your customers this week. So it's worth maybe taking a peek at performance in those states and seeing if you're seeing some sort of substantial drop off. I am not sure that I feel comfortable excluding them.

I think I would let the algorithm handle that delivery decision. But that's the suggestion in this tweet. And it's worth, I would say at least taking a look at just because the spend is so disproportionately concentrated. Whereas in most of the rest of the States, you're seeing less than half a dollar per person being spent.

And you can just imagine that that's not going to be a very high impact to the competition in users feeds.

[00:04:33] Richard Gaffin: Gotcha. Okay. So what else other than excluding or not excluding, I suppose those particular swing states, like what other, what else are we recommending to our clients as far as how to approach this particular run up to the election?

[00:04:46] Taylor Holiday: Yeah, I think it's to be conscious of the fact that in a bidding environment where ECR, estimated conversion rate, is a big factor in your bid management, that there may be some upcoming lulls where you might be getting spend that's converting less often than you like. Now, there's sort of two ways to approach handling that.

One is to pull back. I would actually not recommend that. As a decision, if you can, if you can maintain the, the volume, despite this, what we have seen is that we get an uptick in performance immediately following the election. So it seems to be that the revenue is redistributed more than it is lost.

And so you want to maintain the presence for your customers, be considerate of the environment that you're in. But maintain the energy with Black Friday, Cyber Monday coming, the tide will rise again. You will realize some of that lost attention in the short term. So stay committed to the volume, but manage through the emotions of potentially lower performance over the next week.

[00:05:42] Richard Gaffin: Gotcha. Okay. So for then what's, what can we expect or what do you think we should expect to see like following. Following the election itself. So that's again, Tuesday, right? And so in this run up, you know, we're going to see depressed performance depressed efficiency revenue down. What do we are we thinking?

We're going to see a spring back immediately after like, what's your, what's your take

[00:06:04] Taylor Holiday: Yeah, I think the week following, I think we see an uptick and then a build up into a Black Friday, Cyber Monday, remembering that we have more days before Black Friday, Cyber Monday. So the way I would sort of think about it, it's almost as if If you treat November 6th as November 1st, kind of, and think about like this last week of November, as if it's a week, like you would treat October in the previous year and really think about your black Friday, cyber Monday windows, starting up November 6th or 7th.

There's a lot of people saying like, that's the day to launch your sale. Like if you're going early, maybe that's what you consider is that I almost in my head and treating November 6th, like November 1st of historical, because then that gives me four weeks to black Friday, cyber Monday. Into the cycle as we go.

So that's, that's one way I think we're approaching it is to almost move the calendar back in your mind a month to take the election week, set it out on its own, treat it like you would the last week of October, which usually is lower performance. Anyways, you're building up into the key moments, but it's not yet your key moment.

I definitely would not launch your sale into this noise.

[00:07:04] Richard Gaffin: Right? Okay. So we're titling this particular episode. You know, this is a warning about election day. So it what's, so what's the main warning here then? Because of what it sounds like to me is like, basically we're getting an extra week of October. Well, what's, what's kind of like the big

[00:07:20] Taylor Holiday: I think it's about it's emotional preparation. So I'll get one of our clients sent over. I think what is a great example of an email that if I'm in the human service business, I'm writing. If I'm a marketing manager, I'm sending to the executives as we head into the week. And it was an advisory about ad performance during the run up to the election.

And what you're doing is you're managing people through a hard moment. And to do that basically this references some data from e marketer, which I believe is public data. So I'm comfortable sharing it here that there's just been a 30 percent increase in political ad spending in the cycle across all mediums.

Political advertising has shifted to digital mediums at an accelerated pace. A hundred and 50 percent increase in political digital ad spending in this election cycle compared to 2020 total political digital ad spending in this electional cycle will be about three and a half billion dollars. So it's just setting the tone.

That the impacts of the historical realities are might be greater this year as there's been an increase in overall spending, an increase in distribution into digital now, digital covers a broad swath of topics and preluding program, programmatic television. So there is a little bit of noise in terms of the actual end distribution of that.

That doesn't mean meta in Google for us in the e commerce world. And we know that spend is also concentrated into the swing states as we described. But I think the warning is, Hey, take this podcast and send it to your executives. Take this podcast. If you're a service provider, send it to your clients and just say, Hey, batten down the hatches for a week, and then we're going to start to see some energy, but let's not use this as a broader indication about something being wrong with our ads or something being wrong with the economy.

This is an expected deviation of attention away from us and buying. Onto a very hotly contested election.

[00:09:03] Richard Gaffin: Gotcha. Okay. So maybe unpack if there, if there's anything there you think like the, the potential ways that you could approach this incorrectly, like the, like responding emotionally in the wrong way to

[00:09:14] Taylor Holiday: Yeah, I think you could, you could use the performance as an evaluation of your ad creative about the quality of your sale in some way that you may conflate. The creative ideation that you did with the macro environment that you served in it, which happens all the time. But that's one thing that I would certainly avoid.

I would also see like if you do see some level of performance about your media in some channels, you may, you may inappropriately reallocate, spend other places. You make, make decisions about where the dollars should be going relative to the performance of this week. And I would just say, Hey, If there's decreased efficiency, I think one of the ways that you could subsidy it on the positive side is that a lot of the data that we see is about the acquisition, like new customer acquisition efficiency.

And so there may be opportunity to plan some email and SMS ways to get through the noise and subsidize that revenue loss a little bit in the short term, but I really wouldn't overreact to anything you're doing as being about your effort as much as the environment that it's served into. And of course I would scale this relative to.

You've got to have your pulse on like how contentious or sensational is the thing that's happening. If it's a fairly normal election, the result is sort of conceded on the first night, which Lord knows that it probably won't 

happen, but, but, then, then great. Then, okay. Then you can sort of like ease the expectation of impact.

If something crazy happens over the next couple of days and it sucks our attention in further, I think it's really about that. It's about think about your feed, what you're captivated by, what you're looking at right now. And ask yourself how much big purchase decisions are being maybe just held off on for a moment.

[00:10:46] Richard Gaffin: Gotcha. So, so I guess like if you could summarize like the general advice to approaching these this next five day or even longer period, like, again, to your point, we'll see what happens on election day. But it's basically, it sounds like it's basically stay the course, let the algorithm do the work and you'll be okay.

Just don't freak out.

[00:11:05] Taylor Holiday: Yeah. Yeah. I know. And that's like, Taylor, is that all you ever, is that all you ever say? Yeah. Yeah. Well, sort of, but I think, I think even if you go read like our, our seven peaks of the fifth, fourth peak, like I, the idea is just that this is a slightly abnormal calendar, right? We've 

got these extra weeks before Black Friday, Cyber Monday, you got Cyber Monday in December because of a leap year, you've got the election.

And so it's just about continuing to recognize that the evaluation. Is going to be different, even if you start looking at year over year comps for the first week of November, that's another way that you could sort of get off course of like, what the heck last year, the first week of November was awesome.

But in your head again, you have to reorient how you do that in comparison. And so really, I just want more than anything. The warning here isn't to go do something suddenly. It's to just remember. And to go back and recognize and to notice and contextualize. And that's really what this episode is about more than anything for me is to say, it's not that there's some tactical thing you need to go do right now, as much as it is, don't do something crazy tactical because of misinformation that you read relative to a very different context in this first week of November versus previous years.

And to remind you that this week is actually with the one where we see the greatest impact in this whole cycle. Is this week? It's coming.

[00:12:20] Richard Gaffin: and part of that being too, that the, that the storm is going to break relatively soon. Well, again, I should say we don't really know that it's

possible that it may carry on past that point. But the idea being that like this, this four or five, six day lead up to election day itself, that's generally speaking, that's where the tempest happens.

And then afterwards you'll probably be 

[00:12:40] Taylor Holiday: The good news is we move on quickly as a culture. Like we don't linger, you know, barring some, even, even in we're thinking about 2020, right? Like 2020 lingered. It was insane, but we moved on and the revenue came back. And so like, as I'm not even talking about the bar is like, A normal election cycle, like last year was probably as normal of a post election debate.

Contestament ongoing narrative as you could imagine, 

hopefully, and yet it's still that the data we're referencing is relative to 2020. So just keep that in mind.

[00:13:10] Richard Gaffin: Cool. All right. Well, is there anything else that you want to hit on this Taylor? Any final

[00:13:15] Taylor Holiday: No, but really, Hey, if this is, if this episode has been passed on to you by your marketing manager, by your agency. Hey, treat them kindly this week. We're all a little distracted. Hang with your ads for another week. As we know the American shopper will come back. The consumer is still excited to spend our data still supports that as well.

So, hopeful and let's hopefully it was smooth sailing and we're not divulging into chaos. Next time we we see you 

[00:13:40] Richard Gaffin: That's right. all.

right. Short and sweet PSA for y'all this week on the pod, but that's right, folks. Stay the course. And one thing that we always say on this pod, or that we've said at CTC is that Black Friday always, it always works. It always happens every year. It'll always come back. So, brighter days are on, are on the horizon here.

All right, folks. Appreciate y'all listening. Take care and we'll see you next week.