In this guide, you’ll discover …
- How Axe Bat increased Black Friday AOV 18%, conversions 193%, and ROAS 400% compared to their through-the-year average
- How to overcome the number one concern of high-growth online businesses generating over $10M in annual revenue: rising ad spend
- How your Black Friday Facebook ad success hinges on timing and driving average order value
Ecommerce success lives or dies by a single formula: V x CR x AOV = $
Multiply visitors by conversion rate by average order value … and there it is. Unfortunately, amidst the frenzy of Black Friday Cyber Monday, it’s easy to lose sight of that simple truth.
That’s why I want to share with you exactly how Common Thread Collective (CTC) helped its clients make the most of $6.85 million in Facebook ad spend last holiday, along with how we’re betting big on the same approach this year.
Nothing sneaky, overcomplicated, or underhanded. Just good planning, good marketing, and following the data.
Here’s how we’ll get there …
- Buying Your Traffic Before Costs Explode
- Going All in on Average Order Value (AOV)
- Surging Your Black Friday Facebook Ad Spend 🎁
- Putting Our Money Where Our Mouth Is
Keep reading to get the full Facebook ad strategy
But if you’d also like to go behind-the-scenes and find out how thousands of high-growth brands are launching more holiday campaigns, faster … download our exclusive ebook.
What You Already Know, Only Worse
Spoiler alert: people buy more stuff during the holiday season.
(Oh, and if you want to jump straight to the strategy, click here to go to the first tactic.)
In fact, they buy so much “more stuff” you’re all but guaranteed a huge bump in onsite conversion rate. Last year, CTC clients saw an average 5.6% conversion rate; nearly double the overall mean of 3.1%.
So, why not just throw down ad dollars and watch the sales pour in?
Because everyone else knows it’s coming too.
Ad spend skyrockets over the holidays. Especially on a platform like Facebook. In fact, a recent survey of online businesses operating at or above $10 million in annual revenue ranked Facebook as the most effective channel for new customer acquisition during BFCM.
Even looking at Q4 in isolation, the numbers are stark: on average cost per 1,000 impressions (CPM) — the amount you pay for ad space — doubles on Black Friday.
Naturally, higher CPM translates into higher cost per click (CPC). At Black Friday’s peak, you can essentially expect to spend 140% more than the average ecommerce CPC:
Odds are you already knew that — or, at least, had a strong suspicion.
But, it gets worse. Revenue, conversion rate, and ad cost all soar; meanwhile, average order value … doesn’t.
Looking at AOV in the US, Q4 is traditionally lower than Q3 and only marginally above the quarter-by-quarter mean:
And worldwide — yeah — it’s worse yet again:
Here’s what those numbers look like stacked up against each other:
It’s no wonder that the survey of +10M/year merchants I mentioned before not only ranked Facebook as the most effective channel for new customer acquisition as well as the most effective channel for existing customer reactivation …
They also ranked “rising ad spend” as their number one concern for the holiday.
With all that bad news, what’s the solution?
Buying Your Traffic Before Costs Explode
How do you take advantage of rising conversion rates without paying top dollar for clicks?
Simple. You buy your traffic ahead of time and then track as well as optimize for “delayed attribution.”
Because Facebook tracks purchases in 1, 7, and 28-day increments, last year we decided to measure exactly that. We did this by creating a “delayed attribution multiplier,” where we divided 28-day click revenue by 1-day click revenue.
The more delayed attribution a client got — i.e., the time it takes their clicks to turn into purchases — the higher the multiplier.
What’s more, because holiday shoppers naturally wait to purchase until the holiday sales kickoff, this makes delayed attribution perfect for Black Friday Cyber Monday. In fact, the delayed attribution multiplier in the three weeks leading up to BFCM is enormous.
What does that chart mean?
Getting people to your website in the three weeks before Black Friday is absolutely crucial.
If you get them interested in your product early, visitors come back and buy when you roll out your sales events. Of course, when you buy the underpriced ad space for the three weeks leading up to your sale, expect your ROAS to look bad at first. Fight the temptation to pull back.
During those weeks, send soon-to-be customers to gift guides that preview your offer. Get them excited. Prospect like mad. Remarket like mad. Stay top of mind, and they will come back and buy.
What about that other big variable?
Going All in on Average Order Value (AOV)
Once you’ve figured out your core Black Friday and Cyber Monday sitewide offer, as a general rule we recommend nothing less than 20% off, the next beast to tackle is average order value.
Two tactics stand out:
- Bundled products
- Tiered discounts
One of our clients, Axe Bat, did this brilliantly. The company put together a custom landing page with the biggest discounts on their highest-priced bats and offered multi-bat bundles. Also, they targeted AOV from ad all the way through to purchase:
As you can see, this combination of offers on big-ticket items and bundles ran alongside the core 20% offer. But the brilliant move was that they released the high-AOV offers a few days before Black Friday. We put a pixel on the landing page to retarget those visitors specifically.
The results …
- 18% lift in AOV despite the sale
- 193% increase in conversions
- 400% jump in ROAS relative to their through-the-year average
Another way of doing this is by creating tiered discounts — also known as stacking discounts.
DIFF Eyewear — another CTC client as well as a Shopify Plus merchant — built a tiered-discount structure based on number of products:
- Buy 1, get 30% off
- Buy 2, get 40% off
- Buy 3, get 50% off
For DIFF, the result was a 17% increase in AOV and 150% increase in ROAS compared to through-the-year average.
But, what about if you are the kind of brand that doesn’t discount? In this case, it’s still a good idea to offer something extra to your customers.
On any normal day, iHeartDogs provides one meal to a shelter animal for every email address they collect:
On Black Friday, they took their usual donation number and doubled it. No discount for the customer, but more kindness to dogs.
While this did not create a gigantic ROAS spike, it was very on brand, and iHeartDogs still enjoyed a successful holiday season by generating consistent revenue throughout.
Leading up to BFCM, ad performance was a little above average. During, performance dipped. Not surprising since there was no discount offer.
But look at the two weeks after that:
Once consumers realized that there was no discount coming, they still came to iHeartDogs and bought their gifts at full price, leading to the best two weeks of iHeartDogs’ holiday season.
Other AOV drivers — as long as they’re tied to product or spending thresholds — include:
- Free gifts
- $-off deals
- Gift wrapping
- Free or expedited shipping
- Free gift cards for returning customers
- Exclusive product discounts and releases
AOV on autopilot
The above examples can all be automated using Shopify Scripts, small pieces of code that allow you to create personalized experiences for your online store at the cart and checkout levels.
In fact, Scripts can unleash a host of customizations perfect for Black Friday Cyber Monday.
“We did some extensive testing on our Black Friday deal structure,” says Rich Fulop, CEO of Brooklinen, “in order to optimize AOV and CVR to ensure we ended up on target. This meant testing dollar-based deals vs %-based deals at different levels in order to find the winning combination to maximize ROI.”
The result of that testing was a free-gift + tiered-discount promotion:
- Spend $250, save $50
- Spend $500, save $100
- Spend $800, save $250
That can sound complicated, but for customers, everything happened automatically through the overlapping use of pop-ups and Scripts:
Want to discover more automation insights for the holidays? Then download our new guide …
Surging Your Black Friday Facebook Ad Spend
Let’s put all that together through the most telling data point about Q4 Facebook Ads: the full 2017 ROAS click-only attribution:
The highest ROAS time frame wasn’t BFCM weekend. It was the week before.
Here’s an even more detailed look at CPC, conversion rate (CVR), AOV, and ROAS during the same period:
Underpriced traffic bought early + AOV-focused offers + an irresistible site-wide offer = maximum paid traffic profitability.
Also, spend aggressively on retargeting. Normally, we spend about 80% of client budgets on prospecting. During the Black Friday weekend last year, we upped it to 41% and saw ~2X the ROAS on retargeting dollars.
This year, we plan to increase it even more.
Throughout this article, I’ve relied foremost on real data from CTC clients. But, I want to take this strategy a step further …
I want to show you how we’re applying it to the brands that we own.
Putting Our Money Where Our Mouth Is
Common Thread Collective is our marketing agency. But our partners also own another business, 4x400, which is a holding company for two brands. And guess whose job it is to put together the BFCM ad plan for those companies?
To show you that we are putting our money where our mouth is, I’m going to walk you through the plans that I am constructing for those two brands.
Also, there’s a wrinkle: one of those brands has a strict no-discounting policy. How the heck do we do sitewide offers and build AOV bundles without being able to pull that lever?
(1) The Brand That Will Discount
Slick Products was founded by Brian Wilkinson and his family way back in 2011. After years of being a one-man-show, Brian partnered with our team to see if we could add some rocket boosters. The result has been 397% growth from Q1 of this year to Q3. We feel pretty good about that!
Slick makes premium quality vehicle wash products, but — in this category — we feel perfectly fine about doing some discounting as long as we are relatively sparing with it. Moreover, since we don’t discount all that often, it moves the needle when we do.
Here’s the plan …
Step 1: Set Our BFCM Discount at 20% Sitewide.
Slick’s gross margins are good, but shipping heavy bottles of wash solutions is expensive, which creates a discounting challenge. Nonetheless, I refuse to discount less than 20% for BFCM weekend. It’s a non-negotiable.
Step 2: Build Pre-BFCM Bundles to Drive AOV
If you really want to take care of your dirt bike, ATV, UTV, or other off-road vehicles, you need more than just a bottle of wash. Slick has a three-step cleaning process that we bundle into cleaning kits, to which consumers can also add foam-spray guns that attach to either a pressure washer or a garden hose.
Most new customers add a foam gun with their purchase, but obviously, once you have one of those, you don’t need another. We started thinking in terms of personas: how do we build attractive, high-AOV bundles that will appeal to new customers and returning customers?
To target first-time customers, we will create an “Ultimate Starter” version of each bundle we offer. That will include multiple bottles of each wash, a few more microfiber towels, and the foam gun of the user’s choice. The full price MSRP for the Ultimate Off-Road Bundle would be $159.99. For our AOV-focused offer, we’ll mark that down $50 (31.25%) to $109.99, and we think customers will jump at the opportunity to stock up at a deep discount.
To target returning customers, we’ll do two things:
First, we’ll run tiered discounts on individual wash bottles. Individual bottles will be the only products on the site that we don’t mark down 20% on their own — we lose money if we do.
But, if you buy four? Then 20% it is! If you buy six? We’ll go to +25%.
Second, we’ll do multi-product, multi-bottle bundles without the towels, brushes, or foam guns, name them “Ultimate Refill” bundles, and again, discount between 23%-30%. These discounts will range between $25-$50, and we’ll make sure to show that raw dollar amount to customers clearly.
All of these bundles will be on a landing page laid out in almost the same way as the Axe Bat landing page above.
We’ll start driving heavily product-focused ads to a landing page featuring our high-AOV bundles on the Monday before BFCM so we can start capitalizing on purchase behavior before the weekend starts and the CPMs shoot up.
Those bundles will then stay live throughout the weekend, but the landing page will have a CTA to take people to the main site for the 20% off offer.
For Slick, in particular, this has cascading benefits. Shipping cost is high for every order, but adding items to a single order increases both the fulfillment cost and the shipping cost only incrementally. As we push higher AOVs, we’ll also get larger percentage margins from which we can then discount a little more aggressively.
I mention this because you should be thinking about all of these factors, too:
- What kind of bundles make sense?
- Where are my highest gross-profit margins?
- Do I get any additional percentage profit from bundling?
(2) But What If You Can’t Discount?
That’s the question for how we operate Fielder’s Choice Goods (or “FC Goods”). When the source material for our products (i.e., vintage baseball gloves) is in such limited supply, discounting is simply out of the question.
What kind of AOV-focused bundles and sitewide offers can we create?
Step 1: Our Sitewide Offer for BFCM
Our plan to add value to consumers starts with a sitewide gift-with-purchase offer.
FC Goods will soon allow consumers to engrave their initials into the leather on a wallet they purchase for the cost of $25. Our plan is to offer this for free to all purchasers of our lower-cost wallets if they so choose.
The wallet will be the same price (and standard ground shipping is always free for FC Goods), but we’ll give consumers added value at no cost.
Step 2: Gift Bundles for High AOV
Premium wallets make for excellent gifts; so, we plan to create two bundles:
The gifts alone (without the wallet) will be marked at $50 MSRP. Customers buying wallets at <$200 will be able to add the glasses and coasters to their order for only $25. But for consumers who spend >$200 (two of our lower cost wallets or one of our higher cost wallets), we’ll include the whole bundle for free.
All that in the service of higher AOV!
Your Black Friday Facebook Ads Strategy
Remember, success comes down to one equation: V x CR x AOV = $
The holidays don’t change that.
- Visitors: You know that ad costs are going to skyrocket, so buy your traffic in the three weeks leading up to Black Friday Cyber Monday
- Conversion rate: At first, conversion rates will look bad, but know that delayed attribution is coming and so are the sales
- Average order value: Offer customers your deepest discounts on bundles, preview those discounts before BFCM, and then unleash them
If you have any questions, or if you have your own favorite examples of ads that dominated Black Friday last year, hit me in the comments.
About the Author
Andrew Faris is the VP of Growth at both Common Thread Collective and 4x400 in Southern California. He’s spent the last four years incessantly thinking about how to grow ecommerce brands online, loves baseball analytics, and is very happy that his wife had a thing for tall skinny guys back when they met.
Appendix: About the Data
All data for this study was analyzed on a click-only attribution basis. While our agency-wide opinion is that there is some legitimacy to limited view attribution windows, I eliminated view conversions here in order to reduce noise.
I analyzed 13 accounts in all (Common Thread Collective now services ~30 clients at a time, but serviced ~15 at a time across the time period covered in this study) who spent a combined total of $6.85 million dollars in the time period covered.
From there, I focused on the five that had full datasets ($4.1 million total spend) across the entire time period covered as the basis for the relevant graphs. Though I isolated the five, they are not outliers: these patterns were consistent across accounts.
To be frank, this is unquestionably the biggest weakness of this study: it covers only the five accounts. Nonetheless, I am confident in the overall results as being representative, enough so that our agency is recommending the strategy outlined here to all of our clients for Q4 2018.
Lastly, we are planning to update the study with 2018 results sometime after Q4 passes.