Advertising during the holiday season is a big investment. This is even more true if you’re launching a new product. But if you strategize properly, launching a new product during the holiday season can jumpstart your sales and give you a competitive advantage for months to come. From getting financing to ramping up your supply to setting up a winning ad strategy with Amazon and Walmart, there are many factors to consider. David Koifman, Head of Growth at Kickfurther, joined Teikametrics’ Director of Insights Andrew Waber to talk you through the process from start to finish.
- Target specific keywords
- Shift your bidding strategy as conversions increase
- Analyze the entire lifecycle of your product
- Stock product well in advance
- Buy in bulk to save money
- Boost your launch with increased capital
- Be patient when looking for holiday payoffs
- Check out Kickfurther
- Connect with David Koifman on LinkedIn
- Check out Teikametrics
- Connect with Andrew on LinkedIn
- Connect with Teikametrics on Twitter or LinkedIn
Watch the Full Replay
13:39 – The holidays can be the perfect time to launch
Andrew said that the holidays offer a unique opportunity to get eyes on your product, solidify its online presence, and identify trending keywords that allow you to surpass competitors.
“If you launch and you do so successfully during the holidays, it’s probably the best time to launch it from that perspective. Because you get the most eyeballs on it, you get the most conversions, and that will help you months from there just with that conversion history. Amazon really puts that front and center in terms of their algorithm. And also on the plus side, keyword activity changes a lot during the holidays versus let’s say month to month, year and the rest of the year. This really creates an opportunity for you as a seller to blow past your competitors. If you’re really agile, you can jump in early. You can find these pockets of activity where you’re finding people who are really like converting, got conversion rates on a given term. Let’s say an automatic campaign, you’re moving that one to manual once you see that level of conversion. And if you’re going to do that before your competitors, you may be able to hop on a trend that’s occurring naturally within the consumer base, but that hasn’t been capitalized to its full extent by let’s say your competitor. So it really rewards you as a seller if you’re very active here to just take advantage of these trends, versus another time of the year where those changes tend to be a little slower to develop.”
17:19 – Target specific keywords
Andrew said that a broad advertising strategy is tempting, but it’s better to go narrow and deep. This will give you the highest chance of ranking above established competitors.
“Top sellers on those really popular terms are going to be really hard to unseat. Or missteps like out of stocks, which can really impact your organic rank. So it’s those folks that have been there a while, it’s really hard to get past them. But there’s a way to do that, which is advertising. But what can really be a kind of bugaboo when you’re a new seller, you can think, ‘I’m going to put my dollars in a lot of different places and we’ll see what works, and then I’ll capitalize.’ Really you want to take an alternative tack. You want to say, okay. Can I use let’s say automatic campaigns to figure out what are keywords where I’m seeing good volume, and I’m going to really target those specific keywords, a small basket, with my dollars. I want to dominate those specific keywords where I know my conversion rates are high based on what I’m seeing from my automatic campaign, conversion volume tends to be high. And that’s where I want to focus. I don’t want to spread myself too thin. That’s going to put you at a disadvantage.”
19:12 – Shift your bidding strategy as conversions increase
Andrew said that your best bet for finding new customers is to look for category terms versus branded terms. Once you start seeing conversions on those terms, switch your campaigns from automatic to manual.
“As you’re generating exposure, you want to see sales rank increase within this product. You want to see that rising. That’s all about driving new traffic, which again goes back to advertising. Are you capitalizing on terms that are going to make a real difference from a volume perspective, that’s going to be driving new traffic? So i.e., even if you have a stronger brand, branded terms could be part of your strategy. But really focus on these category terms, because that’s where you’re going to find new customers that don’t know about your product, that are unlikely to buy something from you. And then keyword discovery underlies all this. How are you bidding as keywords develop in popularity, as conversion rate goes up, as conversion volume goes up, how are you then further capitalizing on those terms? If you let those terms just languish and automatic campaigns – if they’re performing well, it’s easy to think, ‘oh I won’t touch them because they’re doing great.’ But we find across the board, if you move the same term from an automatic to a manual campaign, conversion rates go up. This goes across the board. So it really behooves you to pay attention to that and move those terms in as they appear. You’ll be in a better position to capitalize.”
21:30 – Product launches call for experimentation
Andrew said that your normal advertising routine may not apply to a product launch scenario. The key is to keep tabs on when and where customers are converting and react accordingly.
“Product launches are about learning. So if you’ve been let’s say on Amazon for a while, maybe you have a certain threshold and say, ‘I want to hit this before I take a keyword from automatic to manual.’ But during the holidays, when you’re in a product launch, you might want to lower that threshold a little bit so you can try to capitalize. You’re again, seeing where the positive effect is from the consumer base. Where are they coming in? Where are they converting? And just be a little bit more experimental there, because again, it’s going to be a learning process. That’s something that’s going to require ongoing maintenance. And budget – when it comes to budget, something that we recommend usually is uncapping budgets if you’re seeing a profitable sale, or if it’s a sale that’s within your kind of profitability range. You don’t want to necessarily be hamstrung especially during let’s say Black Friday or Cyber Monday, as the case may be. Wow I’m having an awesome sales day via my ads, but I’ve run out of budget halfway through. And now I have to pull back, I have to lower my bids. You’re leaving that open for a competitor to come in.”
24:00 – Analyze the entire lifecycle of your product
Andrew said that you need to make sure every benchmark is met when launching a product, from ensuring you have enough stock to including appropriate product details to speedy shipping.
“Obviously stay in stock. If you go out of stock, your organic rank’s going to go down. There’s big problems. Obviously having a competitive price, because you otherwise won’t win the Buy Box, and your ad won’t show up. If your ad doesn’t show up, you don’t win the Buy Box. So make sure your pricing is competitive, especially vis a vis the other people that might be selling your product. With a product launch it might not be necessarily a problem, but keeping this in mind just generally. Product imagery and A-plus content, or enhanced content as the case may be on Walmart, are also very associated. The presence of more product imagery and A-plus content is associated with better selling product pages across price points, across verticals. So if you want to put yourself in the company of the product pages that are really selling the most in your category, it means having more product imagery. Likely in at least the 5-6+ range in terms of number of images, and have that A-plus or enhanced content below the fold so those folks that go down there and are looking for more information see something really nice that entices them and makes them want to buy the product.”
28:39 – The advertising environment is not static
Andrew said that an August ad strategy simply won’t apply to November and December. Things like keywords can change dramatically. You need to be confident that your strategy will resonate with customers.
“It’s a more volatile marketplace during the holiday season. All those terms that you see, or that may be very popular in one month, if you go to the next month some of those don’t stay the same. You tend to see bigger drop-offs throughout the year. So just be aware. This is just illustrative of the fact that if you took a keyword strategy from, ‘Hey, I was thinking of launching my product in August, but I got delayed three months I’m going to launch it during the holidays,’ don’t take the same strategy you’re going to do in August and take it to December or November, because those keywords will change dramatically. You need to stay on top of these things, because it’s not a static environment. And especially given COVID and how people are shopping differently, it really behooves you to be just much more on top of what’s resonating now? What am I seeing today? What have I seen in the last week, last month that leads me to believe this is going to be a popular term, can I invest in it?”
33:29 – Stock product well in advance
David said that finding ways to bulk up your product inventory is critical. This may require more advanced planning than in years past, as competitors navigate COVID delivery timelines.
“It’s good to be stocked up and have everything on hand. The daunting part of that is always coming up with the cash to pay for it. You generally are producing as you have money to pay for your inventory, assuming that everything’s going really well on the advertising and the sales side. Being proactive and finding funding solutions is really the best way to do it. And onboarding a 3PL to make sure that once that product is in, once you’ve paid for it, the manufacturer’s produced it and it’s arrived here in port, then it’s sent to a warehouse. It’s going to be able to fulfill with two-day shipping. When I’m shopping on Amazon, I have been so accustomed to getting something in two days that if I see this product will arrive in a week or some time range in the future, I generally just skip over it. Because there’s a lot of other options out there that are maybe just as good. So that’s really important. And then lead times. Particularly right now, and particularly for brands who are growing and maybe working with a new manufacturer that is typically dealing with bigger customers, you’re not going to be their top priority. So you want to make sure to give yourself a buffer. So if they have a bigger deal ahead of you and that bigger deal gets prioritized, your delay doesn’t prevent you from doing what you want to do when you want to do it.”
36:26 – Buy in bulk to save money
David said that if you can afford to buy in bulk, the savings can be well worth it. Often you can receive a hefty discount from the manufacturer for large orders, and improve your margins while you’re at it.
“In addition to knowing the right options at the right time, understand what the quantity discounts are. If you’re buying twice a year versus four times a year, how much can you improve your margins and reduce your stress with the additional shipments’ overall costs, because you’re maybe filling a container or you have multiple container discounts or something like that. It’s going to really improve your margins and your ability to profit from your sales. And then it’s not just about paying for inventory. Inventory’s such a high cost, but it’s about freeing up that capital for everything else you need to do. And everything that Andrew’s talking about: targeting the right keywords, making sure you have fulfillment solutions, and paying your employees, and making sure your packaging is attractive so when a customer receives the product, that they’re impressed with it and they want to send another one to their friend.”
42:18 – Be patient when looking for holiday payoffs
Andrew said that results from a holiday launch won’t happen overnight, but they will become clear over time. You’ll need to invest more than in just two short weeks of ads.
“It’s not as simple as well, just do the recommended bid. I got a few terms, we’re good. You can be more aggressive. Understand the conversion rates, understand what those expected costs are. And remember, that’s a surge, right? It gets the flywheel moving in your direction. You’re seeing the positive feedback loop, but it’s not something where I’m just going to turn it on for let’s say this two-week period, and then I can turn it off. For that organic ranking to really change, it may take a while. So just be prepared for this. We talked about that maybe soft launch, maybe do a soft launch. You start figuring this out, you hit the gas during the holidays. When you have a successful overall holiday, you may not see that. You’re going to see some impact in organic rank, but you may not by the end of that and be like, okay, now I’m ranking number one for this term. I’m maybe number five. It’s going to take a while. You may be able to slowly pull back. Obviously like post-launch, post-holidays you can pull back a little bit. But remember you’re still going to be spending to really make this product a success.”
43:22 – Boost your launch with increased capital
David said that product launches can almost always benefit from additional capital. Use capital for production, R&D, and more to gain essential wiggle room to explore new territory.
“There’s a number of factors that would indicate that you probably could use some additional capital. Introducing new product lines, that’s certainly one of them. You’re producing something that you haven’t produced in the past. So you don’t have the cash flows from the sales of that product to fund its production. Also you have R&D costs and setting up new manufacturing, that’s going to have high costs. That’s generally a situation where you might be cash-constrained. I hear from a lot of business owners that they actually have a new product that they want to launch, and they just haven’t launched it because they haven’t had the capital to do so. While they’re still experiencing great success selling their bread and butter product line, they could potentially be doubling that or significantly improving it by launching a new product. So always consider that as an opportunity to introduce more capital.”
44:47 – Recognize that it takes money to make money
David said that many companies are hesitant to “pay” for more capital. But just think about the fact that you can easily remain net positive while also empowering your business to scale and fulfill big orders.
“Some people might say ‘I don’t want to pay for money because I’d rather keep my margins the way they are.’ But think about what is your margin now if you’re increasing the number of sales and you reduce the margin on those increased sales, you’re still net positive considerably. So maybe you don’t make the same margin on every product, but if you have the ability to sell more product, why wouldn’t you pay a little bit for the inventory upfront so that you’re able to sell that product and not stock out and cause people to leave you? People associate a cost to fund their business as a negative. I think it’s a positive. It’s a symptom of growth. It’s an opportunity to sell more. And the new distribution channels, if you add Amazon and you start scaling up your advertising and it just skyrockets, that’s massive. And wholesale customers, you finally land that meeting you’ve been after with Target or CVS and they put in a test order. And you’re like, yeah, no problem. I can pay for this production. But what’s the next step from that test order, right? It’s going to be like 20x that so that they can put it in 100 stores or 1,000 stores across the country. When you get that meeting, that’s the time to start figuring out how you’re going to pay for the big order. Not when the big order comes.”
46:59 – Seek capital from diverse sources
David said that venture capital may be popular, but it can be expensive and dilute your ownership. Today there are many options for funding, from traditional loans to NCAs.
“The sexy thing that everybody’s after is venture capital. I want to get an equity investor who’s going to buy a piece of my company. And they’re a big name, and I’m excited, and I’m going to talk about it at cocktail parties. But here’s the thing: that’s really expensive money, especially if you believe the valuation of your company is going to go up. Maybe you don’t want to dilute your ownership as much as possible. We actually have a lot of VCs sending us business. Because their portfolio companies will come to them and say, ‘Hey, I got this big push for the holidays.’ And they’re like, why don’t you go access some non-diluted funding? And there’s some great options out there…that can be like a line of credit or a loan from a bank. I’ll be the first to say that those are probably going to be your cheapest options and you should go out and seek those out. Unfortunately a lot of early-stage businesses are scrutinized by banks and that they have a very traditional underwriting that will say that this business is risky for us. And so there’s more modern lenders like NCAs or revenue finance providers. I’m sure you’ve all heard of Shopify Capital and Amazon Capital. Those are more modern, like Kickfurther, in identifying risk and saying, yeah, you’ve only been around for a year. But we see some really good results in your sales and we’re willing to give you some money.”