Q4 Advertising Spend Trends: Evolving Strategies in Holiday Shopping (2020-2024)
As the holiday shopping season approaches, advertisers are getting ready for mobile holiday shoppers. Thanks to evolving consumer behaviors and economic factors, the U.S. advertising industry is poised for a record-breaking Q4. Total ad spend is expected to hit a staggering $397 billion in 2024. This includes $16 billion spent towards political and issue advertising.
In the name of looking at history to understand the present, this blog will examine past advertising spend trends and highlight the top five trends that have emerged from 2020 to 2024. We believe understanding these trends is crucial for advertisers aiming to optimize their campaigns and capture consumer attention during this critical shopping period.
Projected Q4 2024 Advertising Spend Trends
Marketers are optimistic about Q4 2024, with projections indicating a 7.2% growth in overall U.S. advertising, or 10.5% when including political ads according to research conducted by Madison and Wall.
In the mobile advertising space, trends suggest a continued shift towards mobile shopping. In our recommendations for maximizing your Q4 budget, we highlighted recent data from Adobe Analytics predicting that mobile devices will drive 53% of online sales during the 2024 holiday season. This means mobile commerce now controls 73% of the global ecommerce market share, up from 59% in 2017.
According to data from Quartile, marketers are projecting sales growth to outpace ad spend in the final quarter of the year. Specifically, 56% of US marketers anticipate their Q4 2024 sales to increase compared to Q4 2023, while only 45% expect their ad spending to rise during the same period. This suggests that advertisers are focusing on efficiency and return on investment to drive sales with more targeted and strategic ad spend. Overall, this indicates a shift towards more data-driven and cost-effective marketing approaches as brands get ready for mobile holiday shoppers.
Historical Q4 Advertising Spend Trends (2020-2023)
Since 2020, sales driven during key shopping days of the Q4 holiday season has risen year-over-year. According to Deloitte, since 2020, online sales on Thanksgiving Day grew 9.8% from 2020 to 2023, 8.8% on Black Friday and 14.8% on Cyber Monday, respectively.
Source: Deloitte
Below, we cover key advertising spend trends from 2020 to 2023 to help brands get ready for mobile holiday shoppers in Q4 2024.
2020: Pandemic-driven shifts
The 2020 holiday season was marked by significant changes in consumer behavior due to the COVID-19 pandemic. As lockdowns and health concerns pushed consumers online, e-commerce sales surged by 32.4% year-over-year, reaching $206.7 billion during Q4 alone according to Payments Dive.
To meet this demand, there was significant growth in digital ad spending during 2020. That year, advertisers spent $276 billion on mobile ads according to Statista. For reference, mobile internet advertising spend will reach $495 billion in 2024.
2021: Recovery and adaptation
As consumers and businesses adapted to the new normal, 2021 saw a return of in-store shopping alongside continued growth in online retail. Advertisers adopted hybrid strategies to reach consumers across multiple touch points.
In 2021 there was a significant increase in advertising spend, with total digital ad spending reaching $189 billion according to the IAB. This represented a 35% increase from the previous year, the highest increase since 2006, with a jump of $50 billion in a single year. Notably, digital video advertising revenues grew by 50.8% compared to the previous year, reaching $39.5 billion. Social media advertising also increased by 39.3% to $57.7 billion.
2022: Inflationary pressures
Rising inflation in 2022 led to more cautious consumer spending and adjusted advertising strategies. Brands focused on value messaging and targeted promotions to appeal to budget-conscious shoppers. According to Marketing Charts, US advertising and marketing media spend grew by 9.4% year-over-year in 2022 to total $480.8 billion, a slower rate of growth than witnessed in 2021.
2023: Stabilization and growth
The 2023 holiday season showed signs of stabilization, with online retail sales growing 26.27% year over year to reach $221.8 billion, according to Adobe Analytics. For advertisers, there was a slowdown in ad spend with just a 7.8% rise in budgets, marking the first time in 14 years that growth dropped below 10% according to MarTech. Overall, US digital ad spending reached $271.2 billion. While growth was slower compared to banner years like 2021, trends indicated a renewed consumer confidence and a continued shift towards digital shopping experiences.
Source: MarTech
Top 5 Trends in Q4 Advertising (2020-2024)
1. Earlier start to holiday campaigns
Over the past five years, we've seen a consistent trend of holiday promotions starting earlier. Brands are launching their holiday campaigns and promotions well before traditional timeframes to maximize holiday sales and give consumers more time to plan their purchases.
2. Increased focus on mobile and in-app advertising
Mobile has become an increasingly critical channel for Q4 advertising, with a significant portion of holiday shopping now occurring on smartphones and tablets. In-app advertising, in particular, has seen substantial growth as brands seek to engage consumers where they spend most of their digital time.
3. Rise of retail media networks
One of the most significant shifts in Q4 advertising has been the explosive growth of retail media networks (RMNs). These platforms are expected to account for a substantial portion of digital ad spend, with projections indicating they will exceed $50 billion in 2024. This growth is driven by increased ad spend from CPG manufacturers and the enhanced targeting capabilities offered by these platforms.
4. Emphasis on personalization and retargeting
Advertisers have increasingly leveraged data to deliver more personalized and targeted advertising experiences. Retargeting strategies have also become crucial for capturing holiday shoppers, with brands using sophisticated algorithms to re-engage potential customers across multiple platforms.
5. Adaptation to economic uncertainties
Throughout the 2020-2024 period, advertisers have had to remain agile in the face of economic fluctuations. Strategies have evolved to address changing economic conditions, with a focus on value messaging and flexible campaign approaches that can quickly adapt to market shifts.
Getting Ready for Mobile Holiday Shoppers
As we look towards Q4 2024 and beyond, advertisers who can adapt to these evolving trends while maintaining a focus on value and personalization are likely to see the greatest success in their holiday campaigns. The continued growth of digital platforms, particularly mobile and retail media networks, alongside the need for earlier and more targeted campaigns, will help brands get ready for the mobile holiday shoppers of the critical Q4 season.
