Pennock's Perspective: Navigating the 2025 Holiday Season’s Impact on Digital Marketing

Impact on the Digital Marketing Landscape

As we move into the 2025 holiday season, Pennock anticipates significant shifts in the digital marketing landscape driven by increased consumer spending, earlier shopping behavior, and higher competition for ad inventory. The highest impact will take place from September through December, with spend and competition peaking around Black Friday, Cyber Monday, and the two weeks before Christmas.

Retail and lifestyle advertisers will dominate Q4 ad auctions, pushing up costs across all major platforms. Brands that prepare budgets, creative, and full-funnel strategies in September will be best positioned to capture share of voice during the critical Q4 shopping period.

We’ve provided a detailed breakdown of expected cost increases, competition, and recommended strategies below:

  • Cost Increases:

    • Meta Ads (Facebook, Instagram): Historically, CPMs rise by 30–40% from October through December. For 2025, anticipate 35–45% increases, especially around Black Friday weekend.

    • Google Ads: CPCs are expected to increase by 25–35% on competitive retail keywords, with search ads peaking during BFCM.

    • Programmatic Ads: Expect 20–30% CPM increases in Q4 as brands chase retargeting and display inventory.

    • TikTok Ads: With its growing role in product discovery, TikTok CPMs could increase 40–50% during November, reflecting surging retail demand.

    • Pinterest Ads: Anticipate 25–35% CPM increases, especially on shoppable pins and gift guides, as holiday planners spike in October–December.

    • Reddit Ads: Expect 20–30% CPM growth as more brands leverage community-driven targeting during Q4, particularly around product-focused subreddits.

  • Competition:

    • Meta Ads: Auction activity projected to increase by 35–45%, with dynamic creative and Advantage+ campaigns under heavier bid pressure.

    • Google Ads: Shopping ads and branded search will see 30–40% competition increases, especially on gift-related categories.

    • Programmatic Ads: Anticipate 25–35% demand growth, driven by retailers and D2C brands scaling retargeting in Q4.

    • TikTok Ads: Expect 40–50% more competition for inventory, especially around trending hashtags and shopping campaigns.

    • Pinterest Ads: Competition expected to grow by 30–40%, as more brands push holiday gift guides and seasonal inspiration campaigns.

    • Reddit Ads: Forecasted 20–25% increase in advertiser demand, with higher competition for niche communities relevant to gaming, tech, and gifting.

  • Content Saturation:

    • According to AdRoll, consumers see up to 10,000 branded messages per day during peak holiday months. Combined with rising ad spend (holiday digital spend projected to exceed $70B in Q4 2025), content fatigue is a real risk.

    • Key takeaways from the AdRoll Holiday Marketing Handbook:

      • Shoppers start earlier: 50% of holiday shoppers begin before Halloween.

      • Cyber Week isn’t the only peak: Expect micro-surges on Singles’ Day (11/11), Green Monday (12/8), and Shipping Cutoff Week (mid-December).

      • Retention = Revenue: Customers acquired before November are 2x more likely to purchase again during the holiday peak.

Recommendations for Content Strategy

  • High-Quality Creative:

    • Rotate creative assets more frequently (every 10–14 days) to combat ad fatigue.

    • Leverage UGC-style videos and creator partnerships for authenticity.

  • Content Personalization:

    • Use dynamic creative optimization to adapt messaging by audience segment.

    • Offer personalized promotions (e.g., loyalty discounts, tailored bundles).

  • Holiday-Specific Messaging

    • Emphasize urgency with countdowns, shipping cutoffs, and limited-time bundles.

    • Use value-driven messaging (sustainability, gifting made easy) to stand out.

Recommendations for Budget Adjustments

  • Increase Budgets & Flexibility:

    • Allocate an additional 25–35% to digital budgets during Q4 to stay competitive.

    • Begin front-loading spend in September and October to build audiences before CPMs spike.

  • Redistribute Budget Across the Marketing Funnel:

    • Top-of-Funnel (TOF): Reduce TOF spending by 10–15% in November–December when costs peak; shift that spend to earlier (September–October) when acquisition is cheaper.

    • Middle-of-Funnel (MOF): Maintain or slightly increase spend, nurturing early leads with sequential messaging.

    • Bottom-of-Funnel (BOF): Increase BOF budget by 20–25% in November and December to maximize conversions from warm audiences.

Machine Learning Campaigns During the Holiday Season

  • How Machine Learning Campaigns WIll Be Affected

    • Bid Pressure: Performance Max and Advantage+ campaigns will see 30–40% higher CPC/CPM due to auction saturation.

    • Budget Efficiency: Algorithms will need larger budgets and longer learning periods; plan campaigns early (September) to establish baselines.

    • Ad Fatigue: Algorithms may over-rotate on strong assets — refresh creative more often to maintain efficiency.

  • Recommendations for Navigating Machine Learning Campaigns

    • Dynamic Budgeting: Scale up budgets earlier (Sept–Oct) when CPAs are lower, then focus spend on retargeting in November–December.

    • Creative Volume: Prepare 2–3x the usual number of assets for PMax and Advantage+.

    • Segmentation: Monitor automated spend allocations closely — consider manual campaigns for high-value segments during November.

Recommendations for Targeting

  • Audiences Likely to See Increased Competition

    • Deal Seekers & Gift Buyers: Higher competition around discounts, gifting, and seasonal keywords.

    • Young Adults (18–34): Strong demand on TikTok and Instagram, with high CPMs.

    • Geo-Specific Shoppers: Heavier focus on metro areas with higher retail activity.

  • Alternative Audiences to Target

    • Existing Customers & Loyalty Members: Highest ROI during peak season — focus on retention campaigns.

    • Older Demographics (35–54+): Less competition and strong purchasing power, particularly for beauty/lifestyle.

    • Niche Communities & Interests: Leverage influencers and contextual placements around hobbies, lifestyle, and gifting guides.

Recommendations for Channel Diversification

  • Channels Likely to See Increased Competition

    • Meta (Facebook & Instagram): Highest CPM increases during peak weeks (Black Friday–Cyber Monday). Heavy saturation in feed + stories ads.

    • Google Search & Shopping: Competitive auction prices around gifting, discounts, and last-minute delivery.

    • TikTok: Increased spend from retailers + consumer brands driving CPM spikes, especially for 18–34 demo.

    • Pinterest: High competition around holiday gift boards, decor, and beauty inspiration searches.

  • Alternative Channels & Opportunities

    • Reddit (Paid + Organic):

      • Paid: Contextual placements in gifting, hobby, and interest subreddits (e.g., skincare, jewelry, self-care, wellness).

      • Organic: AMA (Ask Me Anything) style posts, community engagement, and holiday gifting threads.

    • Pinterest (Paid + Organic):

      • Paid: Lower CPMs earlier in Q4 — start in September to build awareness before peak auction competition.

      • Organic: Holiday boards (e.g., “Gift Ideas Under $100,” “Winter Beauty Routines”), boosted with paid pins for traffic.

    • Email & SMS (Owned):

      • Segment audiences (loyalty members, cart abandoners, deal seekers).

      • Run early “VIP holiday previews” to build retention before deep discount weeks.

    • Affiliate & Influencer Partnerships:

      • Leverage nano/micro creators on TikTok, Instagram, and YouTube for gifting guides.

      • Explore influencer whitelisting to extend paid campaigns while bypassing ad auction fatigue.

    • Organic Social (TikTok, Instagram, YouTube Shorts):

      • Prioritize storytelling formats (unboxing, GRWM, gift swaps).

      • Lean into UGC + creator collabs that tie into holiday routines.

    • Display & Programmatic:

      • Use contextual placements in holiday content hubs (gift guides, beauty/lifestyle articles).

      • Test CTV (connected TV) for high-end brands with luxury positioning.

    • SEO & Content Marketing:

      • Optimize blogs and landing pages for “best gifts for [audience]” and “holiday skincare/jewelry” searches.

      • Refresh evergreen “gift guide” pages and promote them on social + email.

Recommended Spend Schedule

While the recommended budget adjustments in the table provide a general guideline, it's important to note that these numbers may vary based on your brand's niche, industry, and target audiences. At Pennock, we can work closely with your brand to determine the correct budget adjustments tailored to your unique situation. If increasing spend is not feasible, we recommend reallocating budgets toward the alternative marketing channels mentioned earlier, such as email marketing, influencer collaborations, and organic social media strategies. Our team can help tailor your digital campaigns to support these channels effectively, ensuring your brand remains competitive and engaged with your audience during the holiday season.

Conclusion

The 2025 holiday season will create the most competitive digital advertising environment of the year, with ad costs spiking 30–50% across platforms. To succeed, brands should:

  • Front-load acquisition in September–October to build warm audiences early.

  • Increase BOF focus in November–December for efficient conversions.

  • Invest in retention and loyalty campaigns to drive repeat purchases.

  • Diversify channels (email, influencer, SMS, organic social, streaming) to mitigate cost pressures.

At Pennock, we recommend combining budget flexibility, audience-first targeting, and creative agility to maximize ROI through Q4. By preparing for elevated competition and investing in strong pre-holiday acquisition, beauty and lifestyle brands can maintain an edge in the 2025 holiday landscape.


Pennock SEEDsPennock Team