Will Facebook play a role in the holiday shopping season?

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The fourth quarter is huge for retail brands, as the holiday shopping season is upon us. But how much influence will Facebook have? More than you’d think, according to a report released Tuesday morning by Facebook Strategic Preferred Marketing Developer Adobe.

As 30 percent of consumers polled said they plan to increase their online shopping, 36 percent said that social media sites such as Facebook will play a role in purchasing decisions.

Though only 2 percent of holiday online shopping transactions are expected to come from social, retail brands will be ponying up on advertising during Q4, especially in a shortened season.

Tamara Gaffney, Principal Analyst at Adobe Digital Index, talked with Inside Facebook about the role that Facebook will play in this important quarter. She noted that cost-per-click will go up as more advertisers vie for News Feed space. Gaffney said last year, there was a 42 percent increase in CPC during the holidays. She described how even though only two percent of purchases will come directly from social on a last-click attribution basis, Facebook will have a profound impact on buying behavior.

However, advertisers will be challenged to figure out just how much influence a Facebook ad held in a purchasing decision, as traditional metrics will be a bit skewed:

We know from looking at all the advertising and how effective the advertising has become on social media that there will be a lot of retail advertising, but they’re going to have to measure that success in ways other than whether or not it was the last place you were before you made a buy. … What’s going to happen with cost per click is they will go up because as more advertisers buy, it’s like an auction with supply and demand. There’s more demand and so the rates will go up. As the rates go up, the return on investment, as a percentage, will likely go down.

Gaffney said that we could see an increase in Q4 Facebook advertising from movie companies, with several blockbuster hits coming out around the holidays. She also noted that retailers will get smarter about targeting their Facebook advertisements during the holidays, as they need to stand out among a more crowded News Feed:

They are in a very noisy environment this year with a shortened season, and so the amount of promotion and trying to pull a consumer over to their shop versus going over somewhere else is going to be much more of an impact this year than it was last year, when we had 6 more days.

Other major takeaways from Adobe’s study:

  • Cyber Monday this year is projected to be the biggest shopping day in history, pulling in $2.27 billion.
  • Thanksgiving will become a bigger shopping day, and could eclipse Black Friday in 5 years. Spending is projected to rise on that day 21 percent year-over-year.
  • More consumers will turn to online shopping, lured by cheaper prices and free shipping.
  • 28 percent of consumers plan to rely more on mobile for holiday shopping this year.
  • Toys and hobbies will be the biggest shopping categories on Cyber Monday.

Image courtesy of Shutterstock.

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