Watch Daily Trends to Save Money

As the holiday season winds down, expect to see a decrease in volume immediately after the Christmas shipping deadline passes. “Great,” you say, “I see that decrease in volume, but how do I know if it’s impacting how profitable I am?” Starting today, make it a daily habit to check the day-over-day change in your cost per click (CPC) and conversion rate. 

Consider trends in conversion rate and CPC as a pair, to determine when the market for your product is recalibrating to non-holiday levels.

• When the trend reverses, pull back on your bids to keep your ACoS in line
• Pay attention to your campaign budgets as you see where ACoS settles after the holidays

Using data that represents searches that contain the word doll, this article demonstrates a real-life example of how CPC and conversion rate influence advertising cost of sale (ACoS). The data in these graphs compare the daily volume to Tuesday, November 23rd, which was two days prior to Black Friday.

CPCs for doll-related searches are still increasing and in mid-December, they are higher than they were on Black Friday or Cyber Monday.

The conversion rate for doll-related searches has also increased, but there have been days when the day-over-day change was a decrease.

The spikes in ACoS indicate days when CPC increased and conversion rate decreased. Overall, ACoS has trended flat because both CPC and conversion rate have trended up in a similar magnitude.

Given that there have been some days when the conversion rate decreased since Cyber Monday, how do you know when it’s time to pull back on advertising spending? First, remember what you know about market conditions: until the Christmas shipping deadline passes, volatility is expected. But once that date arrives, don’t expect your search traffic to be as lucrative as it was in December. 

Consider trends in conversion rate and CPC as a pair, to determine when the market for your product is recalibrating to non-holiday levels.

• When the trend reverses, pull back on your bids to keep your ACoS in line
• Pay attention to your campaign budgets as you see where ACoS settles after the holidays

If your conversion rate drops to a point below your lowest conversion rate the week of Black Friday, and CPC stays high, holiday demand may be ending. Or, if you see 2-3 days of conversion rate declining and CPCs remaining high, this is also a sign that it’s time to resume non-holiday levels of advertising spend.

Start tracking these metrics now, so that you can maintain efficiency as holiday demand winds down.