Why You Should Increase Your Ad Spend In January (to a Point)

And other performance tips for digital marketers in the new year.

The fourth quarter can feel hectic, but once the holidays are behind you, it’s time to start fresh. For some, this means sticking to a strategically compiled budget for all digital marketing endeavors. For others, this means increasing ad spend to ramp up online performance.

Whatever category you fall into, you ought to know that increasing ad spend in January is proven to lead to more profitable results — but you don’t need to go overboard. Here’s why.

Capitalize on reduced costs in January

As a result of the COVID-19 pandemic, metrics for 2020 are all out of whack. This includes numbers like cost-per-app-install, CPM impressions, cost-per-conversion and cost-per-click (CPC).

Data suggests that CPMs drop by upwards of 50% after the holidays, with levels remaining lulled until Q2. This is because there’s reduced competition, which is likely a result of companies being unprepared to roll out a new campaign so soon after the holidays.

January 2020 was also on the low end for cost-per-lead. All things considered, January saw a lower Facebook cost-per-lead.

Specifically, the cost-per-lead in January was $4.79. This is lower than every month through August except for April and May. These two months just so happen to follow the onset of the coronavirus pandemic shutdowns, which began in March in the United States. April’s costs were particularly low at $2.66, but they quickly ramped up to $3.57 and then $4.89. With that in mind, it’s clear that January’s costs are cheaper than other months that were least affected by the pandemic.

Advertisers go hard in Q4 (and rightly so), so it can be difficult to get on track after such an intense sprint. However, if you prepare campaigns for Q1, you can take advantage of lower competition and lower ad costs.

By increasing your spending, you’re actually getting more than you otherwise would out of your campaigns. This can give you a serious head start in 2021, putting you ahead of the competition before the race has even started.

You may also be able to fit more premium ads into your campaign because of lowered costs and more available inventory. This quelled competition is ideal for companies that are looking to take the leap.

Collect data to find your threshold for better performance

While it can be beneficial to increase your ad spend in January, there’s a threshold where you can see improved performance without spending too much. So how do you find this threshold?

Data, of course.

Lightning AI has conducted deep analyses to help find the minimum level that each account must spend in order to reach the threshold for improved performance. We have found that once companies reach this point, there’s no need to continue spending. As a result, increased ad spend is a good thing, especially during low cost months like January — but there’s a point in which you can set the bar for your budget.

As our artificial intelligence technology receives more event data (or other types of action data on platforms like Google Ads), we’re able to home in on what’s performing best. All the while, we continue testing new audiences to keep the data rolling in.

For Lightning AI, more data equals a higher ROI. We take that equation seriously. Each account has a unique threshold, so it’s up to us to discover where brands and businesses stand within the market at large. However, ramping up conversion data (whichever conversions may align with your KPIs) is the key to discovering the ideal ad spend for you.

With this method, you’ll not only know how much you should spend to improve performance, but you’ll discover the best places to allocate those ad dollars.

Take this LaunchDarkly campaign, for example. In the first five days of the campaign, Lightning AI worked to double the number of keywords for paid search. We managed to 10x the number of conversions during the same time period.

Lightning AI LaunchDarkly Campaign Results

If anyone knows how to make the most of your digital ads, it’s Lightning AI

Lightning AI manages more than $50 million in ad spend. That scale didn’t come out of thin air. CEO Colette Nataf spearheads managed services like integrations and reporting, ad automation, and bidding optimization — all of which is powered by artificial intelligence.

Click here to view: https://www.youtube.com/watch?v=9bWhbvbT_KI&feature=emb_title

Marketing is all about testing, and we’ve done a lot of testing. Contact us to get started intelligently analyzing your data on Facebook, Instagram, and Google Ads. Your performance will thank you well beyond the month of January.