Cyber Week marketing budgets should come from forecasting performance, not a fixed rule of thumb. This works because conversion gains and rising costs move in opposite directions each Cyber Week, and elasticity analysis shows where they cancel out. Without that analysis, brands underspend on the year’s best traffic or overspend once costs erase the gain. This video walks through how to forecast Cyber Week yield and set a budget percentage.
Why Cyber Week Marketing Budgets Shouldn’t Follow a Fixed Rule of Thumb
Cyber Week marketing budgets shouldn’t follow a fixed rule of thumb because the two forces that determine the right number, rising conversion rates and rising media costs, shift by different amounts every year. In this video, John Wallace, CEO of LiftLab, explains that while it’s directionally obvious a brand should increase spend during Black Friday and Cyber Monday, the harder question is how much, since simple rules of thumb, like capping spend at 25% of the monthly budget, ignore how much conversion rates and CPCs are actually moving that year.
The answer comes from doing the underlying analysis: price elasticity shows how media costs shift as spend increases, and diminishing returns analysis shows when the pool of convertible shoppers starts to saturate. Both curves shift during Cyber Week, and both shift differently on Black Friday versus Cyber Monday specifically. Running that analysis through a forecasting tool turns a directional instinct into an exact budget percentage.
In this video, you’ll learn:
How to evaluate the necessity of increasing marketing spend for Cyber Week
The impact of rising media prices and increased competition on your campaign effectiveness
Why analyzing price elasticities and conversion saturation is vital for budget planning
How to use forecasting tools to distinguish performance shifts between Black Friday and Cyber Monday
TIME STAMPFull Video Transcript: The Cyber Week Budget Forecasting Framework Explained
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John Wallace walks through how to forecast the right Cyber Week marketing budget using price elasticity and diminishing returns analysis.
[0:00 – 0:37] Introduction: The Budget Question
Let’s take it back to the basics to answer the question: should I spend more of my marketing budget on Black Friday and Cyber Monday, or we can call it Cyber Week if you’d like. Directionally, I know that the answer is yes. All things equal, we should sandbag some of our budget to support the areas where we have promotions and increases in conversion rate. So, let’s just start with a basic that yes, we should. Now the question becomes not just directionally but how much. Should we spend 80% of our monthly budget on that week, 50% of it? It’s going to be more than 25% if we follow the rule of thumb.
[0:37 – 1:13] Key Considerations: Conversion and Media Costs
The first things that are the moving components of quicksand underneath us that we start to think about are how much is the conversion rate going to go up, because if the conversion rate goes up a lot, we better bring more money to the table. We want to buy that highly converting traffic. The other question that immediately comes to mind is how much is the price going to change, how much is the price of the media going to change? Because if the CPC goes up because everyone else is piling on to buy media and there are still a fixed number of people in the population, if the media price goes up, when is that going to offset the increase in conversion rate?
[1:13 – 1:42] Strategy: Doing the Homework
The answer to these questions is to do your homework. There are essentially price elasticities that tell us how much is the price going to change when we put more money in and what’s the shift in that price elasticity curve on a day like Black Friday; it’s going to be a different shaped curve. The other part is the diminishing returns analysis: how much is conversion going to saturate, are we going to have a saturation of how many converters can we find in market, and again that curve shifts up on Cyber Week.
[1:42 – 2:30] Execution: Forecasting and Yield
Back to the basics: if I know what I’m going to get in terms of traffic when I spend and I know what I’m going to get in terms of conversion when I land that traffic, we actually have all the puzzle pieces figured out. We’re going to be able to run a forecast in LiftLab specifically for Cyber Week where we have the shifts in intercept, we call them; these are changes in performance. So, change in intercept for the Cyber Week and even all the way down to Cyber Monday and Black Friday, those events are not equal. Now you’re in a position to capitalize and answer the question: how much more yield can I get? Then work it out for the other days of the month and work out the percentage of your budget, your overall budget and its percentage. It really does boil down to the basics; they never go away, they’re just bigger effects on Cyber Week, but you’ve got them accounted for if you’re running LiftLab.
Key Lessons: Forecasting Cyber Week Marketing Budget Allocation
Data-driven decisions: Avoid following generic rules of thumb; base your budget allocation on actual price elasticity and diminishing returns analysis.
Monitor costs: Be aware that as everyone increases their media buying, CPC will rise, potentially offsetting your gains from higher conversion rates.
Event differentiation: Recognize that Black Friday and Cyber Monday are not identical events; their performance intercepts differ, requiring tailored forecasting.
Continuous optimization: Marketing basics remain constant, but their effects are magnified during Cyber Week, making accurate tracking essential.
