Archive for December, 2008

The Myth of Cyber Monday

Cyber Monday is a myth.  It never existed.  It was crafted as a “new” and “hip” marketing hook to sell online retailers a bunch of products and services.  The theory as it’s described is that many people shop online at work and since products go on sale just after Thanksgiving, the next work day is huge.  Remember, advertising service providers (or more accurately, the salespeople in those companies) have a product to sell.  Contrary to what one would think, they don’t care nor are even concerned with whether their advertising programs work.  Sure, they’ll pay lip service about “we need to deliver the results or we’ll be out of business,” but that’s all it is – lip service.  They don’t believe it and they know it’s not true.  Their job and their success is not dependent on whether their product works, their job and their success depends on whether they can sell their product.  It takes a lot of time and effort to craft an advertising campaign that works, far less time than it takes to craft an advertising campaign that might work but looks good enough to sell to a retailer.  So a campaign formula is devised, handed to the advertiser’s sales folks, they are told that this is a heavily researched strategy that has been proven to work for 85% of the retailers who implement it, and it’s off to the races.  The salesperson is content knowing that he or she is selling a really good product (ahem – “providing a valuable service”) and if it doesn’t deliver results for the current client, it’s just one of those 15% that don’t work due to some other issues – typically something that the client did wrong like not spend enough money on it.  Oh well, on to the next client.

See how this works?  The salesperson in the advertising company is merely selling a product to the customer – the customer being the retailer.  It’s the retailer’s problem if it doesn’t work.  So the concept of “Cyber Monday” was created because there was a need to sell a product, just as Black Friday was created way back when.

So the theory is in place, how does one sell it?  That part is easy.  Advertising departments in retailers typically look at things in general weekly chunks with a few days on either side to spot key indicators.  Mondays are typically a time to review the previous week and take a look at preliminary weekend data, then fret about the upcoming week.  Fridays are time to look at mid week to mid week trends and fret about how bad Monday is going to be, but not too much since the weekend has arrived.  Given that online retailers are either just divisions of offline retailers or companies competing for the same customers, having a sale after Thanksgiving is a given.  People shop more online and offline right after Thanksgiving.  Before “Cyber Monday” was invented, online retailers were looking at the last week’s results and seeing some pretty dismal numbers Monday morning after Thanksgiving.  Most people were too busy travelling or getting ready for Thanksgiving guests on Wednesday, they were eating on Thursday, then shopping for all the “this store only” specials on Friday.  Saturday and Sunday data weren’t ready for analysis yet but preliminary data showed some promise.  Then by the following Friday, Saturday and Sunday figures were in but most of the money was actually collected on the first bank business day, which is  – you guessed it, Monday.  So Monday was HUGE!  Like REALLY HUGE!  Only after drilling into the details of millions of transactions would one know if Monday was huge or if it was just like any other Monday but with increased Saturday and Sunday totals.

This is where four things happened at once.

1.  The retailers were sold advertising campaigns that focused on Cyber Monday.
2.  Data gathering and analysis got much faster, making weekend sales data available for analysis.
3.  Journalists started talking about Cyber Monday, which reinforced #1 above.
4.  Retail executives were (and still are) slow to adapt to new models.

Once it became apparent to advertising folks at retailers that the weekend sales were big on Monday (as opposed to having to wait until Friday), they were able to fret less.  Their bosses upstairs in the executive suites weren’t asking about the weekend yet, they were concerned with last week.  A few big advertising folks bought some specialty campaigns to turn the Monday after Thanksgiving into more than just any old Monday, and it worked.  It didn’t have to be huge, just significant.  Any large advertising campaign that is focused on ONE DAY is going to be significant.  By Friday the executives were looking at the sales data (the old way) and the cash flow.  After seeing a HUGE Monday they gave credit to the people inside the advertising departments who were happy to display their “brilliance” in buying the specialty ad campaigns.  After a couple of years of doing this, journalists starting to talk about it.  Well that just created a buzz and we all know that nothing draws a crowd like a crowd.  People shopped more on Monday because they kept hearing about it in the news, retailers started marking down their online offerings on Monday because of all the people shopping that day.  A few trips around the carousel, and voilla!  The salespeople in the advertising agencies now have a completely clear conscience because not only did they sell their product, but it worked!

Too bad it’s bunk.

Retailer executives have adjusted and the data providers have responded.  ComScore reported in 2005 that the highest online shopping day was November 22, the Tuesday before Thanksgiving.  Last year Scott Silverman from the National Retail Federation admitted that it was all made up.  The National Retail Federation is itself a sales organization.  They sell retailers on ideas and concepts but primarily they act as a PR agency for their member organizations and their industry.  See how this works?
Here’s a quote from the article linked above:

The genesis of the concept goes back even further. member Shmuel Gniwisch, chief executive of the online jewelry site, recalls getting an e-mail from last year, suggesting that online retailers come up with their own marketing hook to match Black Friday. “The online guys got together and said, ‘Let’s give people something different,'” he says. “The reality is, we didn’t notice anything special” on the Monday after Thanksgiving.

Funny, advertisers weren’t saying that back when they were hyping this opportunity.


December 2008
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