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Meta’s average price per ad placement rose 14% year over year in Q3.
Holiday sales volume is forecast to grow only 2.2% (mostly driven by higher per-item costs).
Those two numbers don’t match, and the gap comes out of your margin.
Ad Costs Are Climbing
Meta’s Q3 earnings release showed ad impressions up 10% and average price per ad up 14%, both year over year.
Revenue rose 26%.
(Meta says the rise reflects ad performance gains and better macro conditions than last year.)
That 14% is a platform-wide average, so your own number could look very different.
Shoppers Are Waiting For Deals
Oxford Economics forecasts holiday retail sales up 4.2% in dollars, but only 2.2% after inflation.
It points to high energy and diesel prices, plus rate hikes that raise credit card borrowing costs.
It also calls the season “deeply bifurcated,” with higher-income shoppers keeping spending afloat.
In NRF’s early-October survey of 8,094 adults, 56% of holiday shoppers said the economy will affect their holiday spending.
Of those, 43% plan to shop sales more often, 31% will comparison shop online more, and 29% will use coupons more.
Nearly two-thirds (64%) are likely to wait until Thanksgiving weekend to do most of their shopping.
Higher costs to reach them, and promotions to close them. That’s the squeeze.
Google Shipped Three Margin Tools
Google announced three updates to its customer lifecycle goals this week, all rolling out this month.
Percentage multipliers. Bids scale with predicted cart size, from 1.1x up to 5x.
At 1.2x, a $100 purchase is valued at $120.
They work across Search, Shopping, Performance Max, and Demand Gen.
This tool is exceptional for businesses that thrive on higher order values.
Retention goals. Re-engagement mode prioritizes customers who haven’t ordered in a while, and Retention Only mode focuses on the segments you pick.
They’re rolling out in Performance Max, Search, and Shopping.
Yet another way to spend your money more wisely on past customers.
High value mode. It’s now coming to Shopping campaigns to help you find your next best new customer.
Existing customers already know you, so they’re usually the cheapest place to find sales when new-customer costs climb.
What To Do This Week
- Re-run your Q4 forecast at 2.2% volume growth.
The 4.2% figure includes price increases, so it overstates how many orders you’ll get. - Pull your own ad costs.
Compare your Q3 cost per thousand impressions and cost per purchase against last year. - Set your deal calendar now.
Decide what you’ll discount, and what you won’t, before shoppers start waiting for Thanksgiving weekend. - Build a retention campaign.
Reach lapsed customers with Google’s retention goals, email, or SMS before Black Friday. - Test a percentage multiplier.
If your cart sizes vary a lot, try it on one Shopping or Performance Max campaign first.
If your cost per sale rose 14% tomorrow, would your Q4 plan still turn a profit?
If you’re not sure, we can pressure-test your budget and forecast. Our team builds the plan, then runs the paid, search, and email programs behind it across platforms.
