Amsterdam, November 22nd, 2023 – Black Friday stands as an annual global shopping event that originated in the United States and has since expanded its influence worldwide. It represents a period where consumers actively seek discounted deals, primarily facilitated through online platforms. In 2022, the British public spent approximately £8.71 billion on Black Friday, marking the significant growth of this annual shopping spectacle.
The evolution of Black Friday is closely intertwined with advancements in digital technology, particularly in advertising. This transformation shapes the dynamics of interaction between businesses and consumers amid a wide range of discounts and promotions. Figures from the Dutch Payments Association further highlight Black Friday’s global impact, revealing that in 2022, the Netherlands generated over €300 million more turnover in online sales than a typical Friday. This financial surge emphasises the economic significance of Black Friday, where the interplay of shifting consumer behaviour changes to online shopping. The underlying mechanisms of advertising technology acts as a key driver for advertisers and brands to reach their desired audiences and supports subsequent economic activity.
The Evolution of Black Friday
Once a fully brick-and-mortar affair, Black Friday has seamlessly integrated into the online domain. The transformation from offline to online shopping experiences has redefined the way consumers engage with discounts. Adding to the significance of this evolution, a 2022 study revealed that during Black Friday, 55% more payments were made online, resulting in a 70% higher turnover than a normal Friday. In physical stores, there were 10% more payments, contributing to a 15% increase in turnover.
The Role of Digital Advertising in the lead up to Black Friday
Amidst all this activity, the digital advertising industry plays a significant role, facilitating personalised advertising campaigns and tailored promotions. Utilising data-driven strategies, businesses leverage consumer behaviour insights to craft compelling ads that resonate deeply with their intended audience. Interactive elements like polls and quizzes are transforming passive browsing into engaging activities. Personalised adverts boast 32% effectiveness in clothes and shoes, 26% in food and drink, and 21% in travel according to a recent study. Every click and preferences contribute to the consumers’ shopping experience, engaging advertisements create individual and personalised pathways to brand awareness. Statistics underline the impact—35% find behaviour-responsive ads most effective, 43% of UK shoppers value personalised recommendations, and 29% desire ads facilitating virtual product interaction.
The normalisation of early Christmas campaigns and month-long Black Friday events further emphasises a shift in consumer behaviour, blending easily into the digital advertising landscape and influencing the broader trading market, marking a pivotal occurrence with far-reaching consequences in the financial landscape. End-to-end digital advertising and entertainment media platforms, like Azerion, play an important role in curating qualified audiences that give advertisers the confidence that their offers are landing in the most receptive place. Azerion’s local sales teams provide crucial on-the-ground support, leveraging their expertise to assist advertisers in navigating regional nuances and ensuring finely tuned campaigns that resonate deeply with diverse audiences. This localised approach significantly enhances the effectiveness of personalised advertisements, reaffirming the integral role of digital advertising in connecting businesses with their target consumers amidst the changing landscape of early Christmas campaigns and extended Black Friday events.
Impact on the Stock Market
The five-day period from Thanksgiving to Cyber Monday in the US witnesses substantial online spending, providing insights into consumer sentiment. Investors monitor these trends, emphasising the need for strategic, long-term approaches despite holiday-related fluctuations. Black Friday’s impact extends beyond digital advertising, affecting retail, payments, and marketing campaigns, making it a pivotal event with far-reaching consequences in the financial landscape. Poor Black Friday sales figures can dampen expectations for a profitable quarter, impacting share prices and highlighting the event’s significance in shaping market trends and investor sentiment.
Key Takeaways for Businesses
In the evolving digital landscape, businesses must adapt to changing consumer habits, particularly in Europe where nuances play a significant role. Key takeaways reveal that early Christmas campaigns, mindful spending messaging, and in-store incentives are critical strategies. European data indicates that 33% of consumers start their Christmas shopping during the Black Friday weekend, with 33% focusing specifically on gift purchases, further highlighting the occasion’s significance. Moreover, 78% of European Black Friday shoppers prefer cautious spending, emphasising the need for businesses to balance discounts with value and quality. In the UK, consumers strategically save a month before Black Friday to maximise savings on full-price items. Understanding these regional nuances is crucial for tailoring approaches, with the future of Black Friday in Europe lying in the hands of digital advertising. As businesses and consumers navigate this whirlwind, personalised advertising, interactive content, and global perspectives cater to nuanced European preferences. The unseen engine of digital advertising underpins the success of Black Friday, ensuring it remains a transformative digital event tailored to the European market.
Selected considerations for Investors
As an investor, the lead-up to Black Friday offers a unique window to gauge ad tech companies’ capabilities in handling high-volume periods effectively. This period provides increased visibility into their scalability and performance. Evaluating these six key characteristics during peak seasons can be helpful in assessing how well these companies deliver at scale:
- Targeted advertising: does the company have access to high quality data with the means to both use and protect it effectively
- Device optimisation: are they able to deliver these targeted ads to consumers in the most appropriate environment, on their mobile device for example, or though their TV, in the street or on their radio?
- Ad fraud and brand safety: does the company take the right measures to ensure their advertisers are safe from fraud and exposure to inappropriate content?
- Scalability & reliability: can they handle sudden surges in traffic without compromising the integrity of their infrastructure?
- Global reach: how far around the globe does the company reach, can they cope with demand across multiple geographies and time zones?
- Investors should be mindful of the evolving regulatory landscape in the digital advertising industry. Digital advertising companies that are proactive in meeting privacy regulations and other industry standards may be more resilient to regulatory challenges.
Black Friday has transformed from a physical event in a single country linked to a public holiday to a global shopping event enabled by technology forming the basis of many corporate annual budgets. Preparation for the event is a year-round effort but a lot of that work only comes to light during the event itself. Many companies see it as a make or break moment and it’s important to understand the underlying technology that assures success.