AI Will Help Advertisers and Shoppers

In what seems like no time at all, artificial intelligence has become a mainstream business tool. One of its most promising uses is in advertising.

AI will likely improve advertising efficiency, boosting key metrics such as return on advertising spend and conversions while engaging shoppers better.

Here’s how.

Personalization

In a recent Harvard Business Review article, academics from Babson College, the University of New Hampshire, and the University of South Carolina proposed a framework for how businesses should employ two forms of artificial intelligence for marketing.

The article distinguishes generative AI (ChatGPT, others) from analytical (data analysis), arguing that the latter helps predict shopper behavior and outcomes, while genAI is creative.

This tandem of AI tools will facilitate personalized ad messaging to individual shoppers or micro-segments at scale. It is the idea of precise ad targeting combined with personalization to drive conversions.

Photo of Romain Lerallut

Romain Lerallut

“It’s no longer just about reaching a large audience; it’s about reaching the right audience with tailored, relevant messaging that delivers better outcomes,” wrote Romain Lerallut, head of Criteo AI Lab, in an email conversation with Practical Ecommerce.

Analytical AI will create target audiences and segments, while generative AI will deliver the just-right message, ultimately improving ad performance.

Targeted personalization is not easy, even for data scientists, but most advertisers will not have to manage it directly. Rather, advertising technology companies — think ad exchanges and ad services — will likely offer personalization as a service.

Budget Allocation

Allocating advertising budgets is instinct-driven and necessarily relies on human experience and data silos.

Most marketers can interpret relevant data and make correct budget decisions. Yet automated budget allocation in a fast-moving digital ad marketplace would be an improvement.

AI will improve budget management, which, in a sense, builds on the targeted personalization described above.

AI models will analyze performance, customer behavior, and real-time market signals to optimize budgets across channels and campaigns.

“Brands can target consumers more precisely and make every advertising dollar count,” wrote Criteo’s Lerallut.

Most advertising platforms will likely include predictive budget allocation tools that automatically shift ad spending toward the top-performing audience segments or channels. Advertisers will benefit from improved performance.

Shopper Journey

AI can group disjointed data sources to better understand how shoppers become customers.

In practice, a predictive AI budget allocation tool will not rely on last-click attribution. Instead, analytical AI and machine learning tools will power marketing mix models and multi-touch attribution models.

Per Lerallut, “As consumers engage with brands across more touchpoints than ever — online, in-store, on social media, through apps, and more — AI can help unify and interpret these interactions to create a cohesive view of the customer.”

Advertisers will likely require marketing mix models and multi-touch attribution tools. Google and Meta currently offer free solutions.

Frequency Optimization

With a clear map of the shopper’s journey, AI can improve how and where ads appear, optimizing placement, frequency, and timing.

This could also mean optimization beyond a single platform. AI could suggest frequency caps on Meta, Google, and other platforms to avoid reader fatigue.

Perception

Combined, AI’s capabilities will result in a better shopper experience. Personalization, budget allocation, customer journey, and ad timing will lead to a deeper understanding and trust with the advertiser’s business.

Ultimately, AI will help both advertisers and shoppers.

The Rebirth of ‘Marketing Mix Modeling’

Lingering privacy challenges and ever-improving cloud and artificial intelligence technology are driving a marketing model renaissance.

Marketing mix modeling (MMM), launched in 1949, fell out of favor in the early 2000s when digital advertising took off. The data-driven technique had long helped marketers understand how variables such as advertising, promotion, and prices impact revenue.

Yet compared to tracking cookies and last-touch attribution models, MMM seemed complex and expensive.

Renaissance

In 2025, however, MMM has enjoyed renewed attention.

Meta and Google have released free, open-source MMM tools in the past couple of years — Google’s Meridian on January 29, 2025, and Meta’s Robyn in 2023.

Why does MMM interest two of the largest digital advertising platforms? I see three probable factors: tracking cookies, AI, and cloud computing.

Meridian: Empower your team with best-in-class marketing mix models and drive better business outcomesMeridian is an open-source MMM built by Google that provides innovative solutions to key measurement challenges.

Google launched Meridian, an open-source marketing-mix model, last month.

Cookie-less Advertising

Controversies surrounding tracking cookies are the first driver. Cookies are a foundational and useful technology. A first-party cookie on a browser keeps users logged into a website and retains their preferences.

However, third-party tracking cookies that catalog an individual’s behavior across web properties are a privacy pariah. Laws such as Europe’s General Data Protection Regulation and the California Consumer Privacy Act limit such cookies, and many browser companies have stopped supporting them entirely.

The potential of cookie-less ad targeting makes MMM attractive to large-scale advertisers and platforms.

Advertising performance. Third-party cookies, despite privacy concerns, drive ad targeting and thus performance. MMM should help advertisers identify which marketing channels and creatives produce the best returns. Coupled with new ad targeting techniques, MMM will almost certainly improve performance.

Meta’s Robyn, for example, helps advertisers analyze the performance of campaigns across Facebook, Instagram, and other channels. It gauges channel effectiveness and optimizes ad spend based on results.

The era of cookie-less targeting encourages the use of MMM. Some of the most forward-looking, high-budget advertisers are considering alternative targeting methods and new promotional channels. Monitoring those experiments requires complicated multi-touch attribution or MMM.

For example, Google’s Meridian MMM moved beyond standard regression models to a theory called “Bayesian causal inference,” which captures the impact of imprecise marketing actions, such as a social media post.

Personal privacy is yet another reason why MMM appeals to Google, Meta, and many advertisers. The model aggregates data and generally avoids personally identifiable information.

Artificial Intelligence

AI makes MMM relatively faster, more adaptive, and easier to scale.

Improved speeds come first from training the model quickly. The foundational, now-available models are a massive headstart compared to starting from scratch.

Second, AI helps process and clean large, complex datasets from multiple sources such as digital ads, TV, print, and online and in-store sales. The associated algorithms detect seasonality, outliers, and data anomalies, reducing manual work but still requiring data scientists to fine-tune the models.

Regardless, the AI behind Meta’s Robyn dynamically adjusts model variables, improving accuracy automatically. It is thus more adaptable and scalable.

Cloud Computing

Twenty years ago, the rise of web-based marketing produced massive datasets and hefty processing loads. Analyzing that info typically required custom-built infrastructure and expensive data warehouses

These limitations no longer exist thanks to cloud computing advances and affordability. Instead of spending $500,000 or more on MMM software and servers, a company can run Google Meridian in the cloud for a fraction of the amount, perhaps as little as $10,000 a year.

Accurate modeling, however, requires some scale — businesses investing at least $500,000 per year in advertising likely benefit the most. But that could change if MMM becomes available as a service.

The New Era of Cookie-less Ad Targeting

Advertising technology has entered a new phase that pairs personal privacy with targeting.

For years, the ad industry has depended on third-party tracking cookies — tiny snippets of code downloaded to a user’s browser — to identify prospects, gather data about them, and employ that data for targeting. Consumers saw relevant ads, and advertisers enjoyed good, if not superb, returns.

Screenshot from Adobe Experience Cloud of a female holding a computer tablet

Adobe’s new real-time customer data platform is one of many innovations in cookie-less ad targeting.

Cookies

Unfortunately, cookie-based tracking has privacy problems. In contrast to first-party cookies, which store preferences, third-party tracking cookies aggregate, share, and thereby expose lots of private information.

Just this month, Wired magazine reported, “Google’s advertising ecosystem reveals that a wealth of sensitive information is being openly served up to some of the world’s largest brands…Experts say that when combined with other data, this information could be used to identify and target specific individuals.”

Privacy advocates recognized this and began railing against sharing personal and sensitive information across advertising networks. Technology companies responded. Mozilla’s Firefox browser, for example, stopped allowing tracking cookies back in 2019.

Google, which operates one of the largest ad networks in the world and has the most popular web browser in Chrome, nearly killed third-party cookies in 2024, as it planned to block them in Chrome and move all advertisers to alternative targeting methods — but it didn’t happen.

“Google heard the alarm bells from the industry that nearly 20 years of ad tech infrastructure cannot be recreated in six months,” said David Stein, then the CEO of the data firm Audigent, in an April 2024 email to Practical Ecommerce.

Those alarm bells could have been Google’s ad exchange customers, its ad tech partners, and the anti-trust regulators concerned that ending cookie tracking would give Google a performance advertising monopoly.

Hence tracking cookies remained in Chrome, but ad tech providers did not stop innovating.

Innovation

The same day that Wired published its report, Adobe announced the general availability of its real-time customer data platform (CDP).

“Brands have long relied on third-party audience signals to power tailored digital ads. As consumers play a more active role in customizing their privacy preferences, a move away from third-party data means new tools are required for brands to identify relevant audiences and deliver personalized ad experiences,” read the Adobe press release.

Adobe’s CDP allows advertisers and publishers to securely collaborate on first-party data to enhance ad targeting while respecting user privacy. This relationship is often called second-party data sharing, and resembles Shopify’s Audiences and similar products.

Methods

Second-party data sharing is one of six primary methods ad tech companies are exploring as they try to maintain or improve ad targeting efficacy without raising privacy concerns.

  • Second-party data sharing allows advertisers and publishers to collaborate, often sharing aggregate data.
  • First-party data is when a business uses its own data to target or retarget individuals or cohorts. Many companies are buying publications to advertise to known customers and prospects.
  • Unified ID solutions produce encrypted identifiers to share among systems. The Trade Desk’s Unified Solution is an example. Often, these IDs stem from an email address.
  • Data clean rooms make it possible for analysts to use data without privacy concerns.
  • Cohort-based advertising targets groups of shoppers with similar profiles instead of individuals.
  • Contextual targeting analyzes the context — web page, app, video, email — to deliver relevant ads to consumers without relying on personal data. Artificial intelligence makes this more successful.

Used individually or in combination, these targeting techniques have significant promise. Most reports suggest that results vary among advertisers, yet the techniques will likely work better than third-party cookies.

Ad Experiments

Listing the ad tech companies developing cookie-less targeting methods would fill pages. Thus advertisers seeking to acquire customers might find it wise to experiment.

For example, marketing platform Zeta Global recently purchased the email advertising company LiveIntent. Some in the industry believe Zeta Global valued LiveIntent’s ability to identify website visitors based on email interactions.

Could Zeta Global’s demand-side platform be worth a look?

Similarly, Paved, another email ad platform, expanded its programmatic network, permitting advertisers to target and retarget shoppers safely and privately.

In short, ad targeting is changing, and the best options may not be familiar platforms.

Print Ads Are an Ecommerce Opportunity

Print magazines can be an unusual opportunity for niche ecommerce merchants.

Digital advertising dominates ecommerce, with good reason. The ads are measurable, easily updated, and often produce instant results. Place an ad and get a sale on the same day.

In contrast, print advertising does not usually produce immediate results and is not easy to measure. Yet the medium has unique values that established marketers appreciate.

Take Amazon’s October 2024 printed toy catalog, for example.

“We’re not surprised to see Amazon leaning into their toy catalog,” said Polly Wong, president of Belardi Wong, a New Jersey-based marketing firm, in a correspondence with Practical Ecommerce.

“Hundreds of brands have added direct mail and catalogs to their mix over the last five years because print offers unique advantages to digital marketing — more real estate to show your product and entice consumers to buy, 100% reach, high lifetime value from customers who respond to print, and a very effective way to stand out to new customers.”

In essence, print promotions — such as catalogs or magazine ads — complement digital advertising.

Brand Advertising

Magazines and printed catalogs can provide valuable brand advertising, an often overlooked approach by ecommerce marketers.

Brand ads in a magazine tend to linger and get many “impressions.”

“An ad in print will sit in someone’s home or near someone’s desk for months upon months, sometimes even years,” wrote Troy Klongerbo, general manager at Homestead Living magazine, in an email interview.

To Klongerbo’s point, most magazine subscribers flip through the publication several times, repeatedly referring to articles and ads. His publication often includes recipes and reference material so that issues become “fixtures” in the kitchen or the shed.

Copies of Homestead Living on a table

Print magazines such as Homestead Living can linger on a coffee table or desk for months as subscribers revisit them.

Printed ads can also build trust. A company with a printed ad appears to be established and trustworthy.

“There’s a deeper implied trust with words and pictures placed in print. Once printed, words and messages cannot be altered, providing for a sort of permanence. Digital ads, even the best of them, are ephemeral to a degree,” wrote Klongerbo.

Indications

While short-lived, digital ads provide solid data, which print does not. An advertiser must be clever about collecting and analyzing print performance and willing to accept indications.

Many print advertisers use several performance indicators in combination.

  • Brand lift surveys. Measure changes in brand awareness, consideration, and favorability after exposure to brand advertising campaigns.
  • Social media engagement. Monitor mentions, shares, and sentiment related to the brand, especially when an issue is first published.
  • Website traffic. Pay attention to website traffic and engagement metrics. An increase in direct or branded search visits often indicates that print advertising is working.
  • Share of voice. Compares the brand’s advertising or marketing presence against competitors within a specific market or industry.
  • Direct response. Finally, thanks to coupon codes, subdomains, and QR codes, magazines and catalogs can capture some direct response data, but this, too, is indicative, not definitive. Ten scanned QR code visits may represent 100 consumers.
Advertisement with a QR code in Homestead Living magazine

QR and coupon codes enable print ads to capture direct response data, as in this example from Homestead Living.

Affiliates

Some print publications use this last form of measurement — direct response — to run affiliate ads for ecommerce brands.

This affiliate relationship is relatively new in print magazines, perhaps borne out of influencer marketing. Modern advertisers are often comfortable with influencer relationships combining flat-rate and affiliate payments.

For example, a direct-to-consumer brand might pay an influencer a nominal fee to produce an Instagram Reel and then pay affiliate commissions to the influencer for sales made with her discount code.

Similar arrangments now occur in print. The advertiser pays a low flat rate to help offset the cost of printing and distributing the ad and shares the revenue tracked via a QR code.

If a brand’s typical affiliate share is 15%, the publication might receive 30% to 50%, recognizing that some shoppers will search for the brand or type in its URL rather than using the QR code.

Complementary

Branded print advertising can positively impact digital. Countless published reports confirm that branding boosts performance ads, driving relatively more clicks, engagements, and conversions.

In short, printed and online ads are complementary approaches to achieving marketing objectives.

Outstanding Marketing Campaigns from 2024

Every December we publish a rundown of innovative marketing campaigns for the year. We handpick campaigns from established companies that have received awards and recognition or that we encountered directly.

Here is a list of outstanding marketing campaigns for 2024. The campaigns feature collaborations, dupes, celebrity spots, mobile apps, mascots, dance routines, pop-ups, and AI-powered videos.

Heineken – Boring Mode

Web page for The Boring Phone

Heineken – The Boring Phone

In a campaign to help people socialize, Heineken released The Boring Mode app. With a single swipe, The Boring Mode turns a smartphone into a boring phone, blocking other social and work apps, notifications, and even the camera for a set period. During events, including the Amsterdam Dance Event and Live Out Festival in Mexico, Heineken activated hidden messages when people held up their mobile phones to encourage them to turn their smartphones boring and keep the moment in their memory, not on their phones.

McDonald’s – McDonnell’s Chicken Big Mac Pop-Up

McDonald's Chicken Big Mac

McDonald’s Chicken Big Mac

McDonald’s secretly introduced a Chicken Big Mac, a spin on the classic menu item through a dupe of an L.A. pop-up called McDonnell’s by Chain. McDonald’s also enlisted influencer Kai Cenat to stir debate on whether or not a Chicken Big Mac is a Big Mac. McDonald’s then launched the Chicken Big Mac on October 10, allowing followers to order the item and decide for themselves.

Squarespace – Rick Rubin

Squarespace teamed up with creative visionary Rick Rubin, co-founder of Def Jam Recordings and former co-president of Columbia Records, to build Tetragrammaton, an online world of curated materials, and a new website template, Transmission. Inspired by Rubin’s Tetragrammaton, Transmission is a minimally designed, customizable framework for anyone to share their interests, with layouts showcasing audiovisual media and members-only content.

Qatar Airways – Star in Your Own Adventure

Qatar Airways launched an AI-powered “Star in Your Own Adventure” campaign, in which viewers select from multiple scenes within a film to star in the leading roles. Through AI technology, the characters become a reflection of the viewer’s appearance, adapting to their facial features and skin tone. The immersive experience now offers holiday-centric moments, including an elf, snowman, gingerbread person, and cheerful characters, inviting participants to star in their personalized holiday-themed Qatar Airways film.

Calvin Klein – Jeremy Allen White

Calvin Klein has launched its winter 2024 collection campaign, starring Jeremy Allen White from “The Bear” television series. This is the third global campaign with White. While the previous two focused on White in Calvin Klein’s emblematic underwear, the new campaign features classic, understated styles, demonstrating the brand’s ability to remain relevant and give fans what they want.

Liquid Death – E.l.f. Cosmetics

Liquid Death canned water collaborated with E.l.f. Cosmetics to launch Corpse Paint. Liquid Death wants to help consumers “murder” their thirst and prefers irreverent and organic marketing over advertising. Brand collaborations allow Liquid Death to inject its spirit and provide the partner brand with an opportunity to expand and do something unexpected. The Corpse Paint collaboration captured more than 250 million social impressions. Other recent collaborations with Liquid Death include sparkling water with ice cream chain Van Leeuwen and a casket cooler with Yeti.

Airbnb – Polly Pocket

Mattel is celebrating Polly Pocket‘s 35th birthday by making the pocket-sized doll an Airbnb host and opening her two-story Slumber Party Fun compact, a 42-foot-tall structure in Littleton, Massachusetts. Guests experienced a retro picnic, beauty fun with Polly’s vanity, fashion try-ons with Polly’s closet, slumber party fun in Polly’s Action Park Tent, and more. Guests booked stays for September 12 to 14. Polly’s home was also opened for 21 daytime experiences for up to 12 guests each from September 16 to October 6. Guests were responsible for travel to and from Littleton, Massachusetts. The location showed the popularity of Airbnb.

Gap – “Get Loose” with Troye Sivan

Gap ran a fall 2024 campaign called “Get Loose,” which starred global pop star Troye Sivan and the dance group CDK Company. Set to Thundercat’s viral hit “Funny Thing,” the film features original choreography showcasing dancers in baggy and loose-fit denim. Sivan is known for his music videos, featuring elaborate and sometimes racy dance routines, and has a combined social following of over 39 million. As part of the campaign, Sivan created an in-store playlist on Spotify. With the Thundercat soundtrack, Gap is tapping into viral TikTok songs, celebrity ambassadors, and dance-heavy advertising to reach Gen Z consumers.

Pop-Tarts – Edible Mascots

In 2023, Pop-Tarts signed a multi-year agreement to become the title sponsor of the college football Pop-Tarts Bowl game, originally commissioned as the Sunshine Classic. To celebrate the event, Pop-Tarts launched the “first edible mascot” last December. The Kansas State football team devoured a Frosted Strawberry mascot in a viral event on social media. For this year, the game’s MVP will select one of three flavors to “ascend to ‘mouth heaven.’” In the run-up to the game, consumers can guess the third flavor, purchase limited-edition Pop-Tarts Printed Fun Mascot Packs, and follow along on Instagram and TikTok.​​

Coca-Cola – AI-powered Christmas Ads

Coca-Cola launched three short AI-generated video ads for Christmas, and the results have sparked backlash on social media and in the press. Three AI studios (Secret Level, Silverside AI, and Wild Card) produced the ads using the generative AI models Leonardo, Luma, Runway, and Kling. The ads highlight the weaknesses and limitations of current video-generation models, such as difficulties with proportionality and natural movement. While the ads are essentially derivatives of the Coca-Cola Christmas ads from 1995, the new AI-powered experiments have drawn much attention and sparked conversation, which is not necessarily bad.

Holiday 2024 Marketing Campaigns from Top Brands

It’s time to be inspired by some of this year’s top holiday campaigns.

In 2024, global brands are mixing it up, augmenting traditional ad campaigns with multimedia elements and additional engagement channels, including apps, social media, and generative AI.

Coca-Cola: CreateRealMagic.com

Screenshot of Coca-Cola's Create RealMagic

Coca-Cola’s CreateRealMagic

Coca-Cola is arguably the world’s most successful brand. Some of its holiday assets, such as caravan trucks and polar bears, create a nostalgic connection for the holiday season. However, Coca-Cola is embracing artificial intelligence for more.

Consumers can visit CreateRealMagic.com to generate digital greeting cards by reimagining iconic Coca‑Cola images and characters through AI tools. Consumers can download personalized cards, email them to family and friends, or post them on social media. They can also save online galleries and browse the work of fellow creators. Coca‑Cola will feature consumer-created artwork and creations from partner artists on 20 digital billboards around the world, including New York’s Times Square and London’s Piccadilly Circus.

The holiday card generator will be available in over 40 markets globally and supports Coca‑Cola’s celebration of the “inner Santa” through everyday acts of kindness. A new television film, “The World Needs More Santas,” shows how real magic multiplies when people embrace selflessness, generosity, and goodwill. Two additional short films, “Ho-Ho Heist” and “The Note,” will drop in December.

Burger King: 31 Days of Deals

Screenshot of Burger King's Advent Calendar

Burger King’s Advent Calendar

Burger King has started its holiday campaign, “31 Days of Deals,” with the launch of its BK Advent Calendar, which holds 12 curated gift surprises. Followers can text ADVENT to be in line for the BK Advent Calendar when it goes on sale on November 22. Recipients can expect favorite items such as Chicken Fries and the Whopper hamburger, as well as nostalgic nods to inspire holiday memories.

The “31 Days of Deals” come to life in the “BK Village,” an immersive experience in the BK app that helps bring the Advent Calendar to life digitally. Royal Perks members can explore the snowy town to unlock deals and “deck the halls” of their holiday home. Each day, users can open the mailbox at their digital holiday home to reveal one of the 31 deals to redeem.

Walmart: Gifts That Show You Get Them

To promote the Black Friday and Cyber Monday kickoff of holiday shopping, Walmart produced a 10-chapter “advertainment” series called “Deals of Desire,” inspired by the thrill of finding the season’s best prices. On October 28, Walmart ran a behind-the-scenes trailer teasing the story and star-studded cast. The retailer then ran chapter 1 on November 11. Followers can visit Walmart.com/deals/blackfriday to shop for specials and follow along as “Deals of Desire” drops new episodes each week.

Amazon: Midnight Opus

Amazon has released its 2024 ad, “Midnight Opus,” which spotlights small acts of everyday kindness that can spark joy. The spot tells the story of a theater janitor whose hidden vocal talent is discovered and celebrated by his colleagues as they prepare a performance stage for their friend.

With a bit of help from Amazon, the final touch is the delivery of a tuxedo jacket, enabling the performer to step into the spotlight and sing. As his colleagues take their seats, the janitor performs a touching performance of the 1965 classic “What the World Needs Now Is Love,” showcasing his vocal prowess.

Amazon has also unveiled its Virtual Holiday Shop, which uses immersive 3D technology powered by Amazon Beyond (virtual store) to showcase seasonally themed interactive content and a selection of new products. Visitors can add items directly to a cart and then check out as usual.

SharkNinja: Ninja the Holidays

SharkNinja, a design company for home appliances, has launched its first-ever holiday campaign for its Ninja brand, titled “Ninja the Holidays,” featuring brand ambassador David Beckham. The initial TV spot aired in the U.S. on Friday, November 1, across various streaming partners, followed by additional high-profile spots, including Thursday night football games.

Television ads will also appear across the U.K., France, Germany, Italy, Spain, the Nordics, the Middle East, and the Benelux regions. The campaign will feature prominently on out-of-home platforms, including billboards in Times Square and London, and will extend across social media and other digital channels.

LEGO: Cataclaws

The LEGO Group has launched its holiday campaign by introducing Cataclaws, an icon for creative LEGO play. The furry brick-built character is a reminder of the power of playing together during the holiday season. The ad features more than 20 LEGO products, unique builds, and cameos from beloved characters. There are also surprises for LEGO fans, including the chance to build their own mini Cataclaws in LEGO stores.

The campaign coincides with the LEGO Group’s annual Build to Give initiative, encouraging everyone to share the power of play with children who need it most by building a heart out of LEGO bricks and promoting it with the hashtag #BuildToGive. For every heart built in LEGO stores, shared on social media, or the LEGO Play app using #BuildToGive before December 31, the LEGO Group will donate a LEGO set to a child needing play in hospitals, children’s homes, and vulnerable communities.

Etsy: Give ‘I get you’ gifts

Etsy has produced its holiday campaign, “Give ‘I get you’ gifts,” featuring the story of Waldo, who travels the world and gets spotted everywhere he goes. But he finally feels seen when he returns home and receives the perfectly personalized Etsy gift from his best friend. The Etsy spots are reminders that Etsy sellers are producing memories that make the holiday season memorable.

The campaign will extend across channels — from TV and billboards to social media, influencers, and experiential. Etsy is creating hundreds of versions of ads that address key buyer needs and highlight the gifts on its platform. Beyond traditional media, Etsy is engaging audiences through experiential activations and podcast integrations. It’s also teaming up with tastemakers such as “Chief Gifting Officer” Drew Barrymore and tennis star Naomi Osaka to share their favorite gifting finds.

Old Navy: Love Is in the House

Old Navy has launched its holiday campaign, “Love Is in the House,” starring singer Jennifer Hudson as the hostess of the Old Navy House, where everyone is welcome. A house party features special guests, including dancer and influencer Lexee Smith, dancer and choreographer Raphael “The Sandman” Thomas, nine-year-old dancer Brody Hudson Schaffer, a.k.a. Boss Baby Brody, and Old Navy’s Magic the Dog.

The campaign will air across cinema, television networks, social platforms, and streaming services such as Netflix, Amazon Prime, Hulu, and Disney+, as well as during NFL games. The campaign includes Jennifer Hudson’s rendition of “Winter Wonderland” from her newly released, first-ever holiday album, “The Gift of Love,” to be sold at select Old Navy stores.

John Lewis: The Gifting Hour

John Lewis, the U.K. retailer, has released “The Gifting Hour,” the second Christmas campaign by the agency Saatchi & Saatchi. The ad is a nostalgic and magical journey to find the perfect Christmas gift. In the ad, a heroine is late to find the right gift for her sister and races into a John Lewis store at closing time. Falling through a rack of dresses, she enters a fantastical world through her memories as she searches against the clock for the ultimate present.

The ad’s soundtrack features the song “Sonnet” by Richard Ashcroft, the former frontman for The Verve rock band. The retailer is holding a competition on social media to find an aspiring artist to cover the song with the help of Ashcroft and record label BMG. The winner will record a version of “Sonnet,” which will feature in a Christmas Day airing of the ad on TV, and BMG will officially release the track. All proceeds from the winning single will go to the John Lewis Partnership’s Building Happier Futures program.

Urban Outfitters: Happy LOLidays

Urban Outfitters has launched its multichannel “Happy LOLidays” campaign, designed to relieve seasonal stress with fun. Engaging consumers across a range of touchpoints, the campaign features an assortment of items starting at $25. Launching with the “UO Carol,” the spot features a tune by TikTok sensation Lubalin and a dance challenge choreographed by Lars Gummer. Curated selections of trending, budget-friendly picks appear in the “LOLiday Gift Guides,” showcasing culturally relevant, viral products.

Olipop: Meet OLI and POP

Olipop has produced its 2024 holiday campaign around two holiday yetis, Oli and Pop. The campaign reveals the holiday characters in an animated environment reminiscent of classic stop-motion holiday specials.

Olipop’s campaign will appear across various platforms, including TV, social media, and select connected services. Olipop has also released limited-edition holiday cans for its Vintage Cola and Ginger Ale beverages.

Sprite: ‘Twas the Night Before Spritemas

Sprite’s “Twas the Night Before Spritemas” is its first new holiday campaign in three years. The remixed holiday classic features basketball star Anthony Edwards as “Anta Claus” and new prose by rapper Monaleo to a hip-hop version of “Carol of the Bells.” The campaign also includes a partnership with carrier service GoPuff to deliver Sprite Winter Spiced Cranberry samples to consumers who tag the brand on Instagram.

Shutterfly: Make Something That Means Something

Shutterfly has produced its 2024 holiday ad campaign, “Make Something That Means Something,” in partnership with creative agency Quality Experience. The campaign takes viewers through a funny montage of abandoned, meaningless, mass-produced gifts, showing the joy that recipients experience when they receive personalized photo-based gifts, such as books, blankets, mugs, and framed images. The campaign offers unique gifts as alternatives to mass-produced products, promoting the items sold through Shutterfly.

Branding Comes First, Says Sharma Brands Owner

To Nik Sharma, companies that pursue short-term profits at the expense of branding face long-term hurdles. They often rely on advertising to gain sales and then struggle when the cost becomes prohibitive.

His agency, Sharma Brands, counsels the opposite: Create a positive name identity first. Affordable acquisition and retention follow.

He and I recently spoke, addressing brand strategies, successful companies, and more. The entire audio of our conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Tell us about yourself.

Nik Sharma: I run Sharma Brands, a growth agency. We primarily focus on pre-launched brands or those earning over $30 million annually. Our main areas of expertise are website development and customer acquisition and retention.

Companies that succeed over time have strong brand recognition. When you see their logo or ad, you immediately feel something because of their consistent and intentional brand work. Brand perception goes beyond their website and ads. It’s about how people talk about them and whether they evoke a positive reaction.

The brands that thrive today often have invested in building their identity through creators or influencers. On the other hand, brands solely focused on performance and marketing struggle, even if they’ve achieved significant sales through ads. For example, one of our clients generates over $100 million in annual revenue, but they’ve been overly reliant on Meta ads and are now finding it difficult to acquire customers.

Bandholz: What channels are these brands finding success on?

Sharma: The key is figuring out how to become part of the culture. Some brands excel through product placement on television, while others send thousands of products to creators each month. The creators create buzz. Some brands build national events or work with YouTube influencers who become the faces of their campaigns. This kind of content-driven marketing leads to increased brand awareness.

A great example is Waterboy, an Austin-based workout hydration brand with a recognizable presence on TikTok. Their ads succeed because folks already know the brand through organic content and short-form videos. This recognition means they don’t need to take customers through a funnel to build trust — it’s already there.

Brands without this level of awareness, especially those under $10 million in yearly sales, face real challenges. They struggle to scale their customer acquisition and maintain low cost-per-acquisition without a solid product-market fit. Relying on paid media alone is tough if you haven’t established a recognizable brand.

If you’re starting, you can probably reach $100,000 in sales using Meta funnels, but scaling beyond that without solid brand equity becomes difficult. Building a brand is like paving a road. It doesn’t necessarily require spending on reach or billboards, but it’s about associating positive emotions with your brand. Performance marketing is the cars driving on that road. If you haven’t built brand awareness first, it’s a bumpy ride, and you end up paying for it with a higher CPA.

David Protein, a nutritional bar company, is an example of a brand we helped that did it right. They launched with a strong brand presence, reaching out to content creators and seeding many products, creating buzz. They flooded the market with influencers talking about their product, which led to a successful launch.

Bandholz: Did they have those relationships ahead of time?

Sharma: Surprisingly, no. From what I know, much of their success came from cold outreach — just contacting creators and saying, “Hey, we have something new.” Novelty played a role, too. Their bar is 28 grams of protein with 150 calories, which caught people’s attention. The site converts exceptionally well. They also launched a TikTok Shop, which was interesting, on the same day with a flash sale. So they got a bunch of social proof in the first 48 hours on TikTok Shop, which helped, too. They also had big podcasters talk about the product, though I’m unsure if that was through paid partnerships or personal connections.

Jolie, the showerhead brand, is another excellent example. They’ve invested heavily in content creation, focusing on native content that fits the platform. They work with various creators who use the content as ads. Then, Jolie runs some light retargeting stuff on Meta to capture the demand. They’re generous with their influencer program, sending products to creators who may not have massive followings but have influence within their friend groups or local communities.

One of Jolie’s advantages is its subscription model. Every quarter, customers receive an easy-to-replace filter for their showerhead. The subscription ties into their branding — using their filtered showerhead will make you look and feel better. Canceling the subscription means reverting to the unfiltered version of yourself, which no one wants. This angle is a big reason for their low churn rate.

Bandholz: Let’s talk about website design. What seems to be converting well?

Sharma: Speed is still the number one factor. A slow site means losing customers. Beyond that, user experience is crucial. I like to think of websites as a physical store. The home page hero section is like the store’s exterior — it’s the first impression people get before they walk in. The collections page is like the inside of the store, and the product detail page is like the customer picking up an item for a closer look.

Many brands treat conversion rate optimization as simply changing button colors or tweaking text, but it’s more about closing the education gap. You want to make the customer feel foolish not to buy your product. For instance, on David Protein’s website, we break down the cost per gram of protein to show that it’s the most affordable option compared to competitors. This comparison not only justifies the purchase but also increases conversions.

Direct comparisons with competitors can be highly effective if you have a superior product. But if your product isn’t great, such comparisons can backfire, as customers will find better alternatives. We once launched a beverage brand backed by athletes, but it didn’t taste good. Despite the marketing and high-profile endorsements, it struggled post-launch because customers didn’t enjoy the product. No matter how good the branding or marketing is, if the product doesn’t deliver, you can’t rely on repeat purchases.

Bandholz: Where can people follow you?

Sharma: My website is Nik.co. My podcast is Limited Supply. You can find me @Mrsharma on X.

Attributing Marketing Expenses by Channel

Some marketers now measure and attribute the cost of labor, technology, and services to individual promotional channels.

The concept is simple. Many companies track only revenue from marketing channels without considering the expense of managing them. The result is often misleading bottom-line performance.

Channel Comparison

Imagine a business with two marketing channels, A and B, each costing $1,000. Both generate 3,000 interactions from potential customers. However, Channel A converts at 2.5%, while Channel B converts at 4%.

If both channels had a $75 average order value and a 25% gross profit margin, Channel A would produce $406 in profit, and Channel B would earn $1,250. Channel B is the clear winner when compared in this way.

Channel A Channel B
Promotional Cost $1,000 $1,000
Interactions 3,000 3,000
Conv. Rate 2.50% 4.00%
Orders 75 120
Avg. Order Value $75 $75
Sales Generated $5,625 $9,000
Margin 25% 25%
Gross Revenue $1,406 $2,250
Profit $406 $1,250

Just about every business would take the $1,000 invested in Channel A and double down on Channel B. After all, Channel B produces about three times as much profit.

This is often the proper choice, but not always.

Marketing Budgets

There’s more to marketing expenses than advertising or accessing a channel.

There are salaries for the marketing team, software subscriptions, creative design expenses, and even influencer fees.

Let’s apply this idea to Channel A and Channel B. Suppose each channel is a demand-side platform (DSP), wherein marketers choose from a list of potential publishers.

DSP A allows marketers to pick some basic targeting demographics, but there’s little a specialist could do to optimize performance. It is a set-it-and-forget-it sort of platform.

On the other hand, DSP B has 100 targeting options that can be compared, fine-tuned, and optimized.

DSP B’s platform provides real-time data with Slack notifications every time a campaign’s conversion rate changes.

The marketing specialist spends about 30 minutes a month setting up the simplistic DSP A but about an hour a day monitoring, studying, and tweaking DSP B.

If the marketing specialist earns $50 an hour, DSP A costs about $25 per month in labor. Given 20 working days a month and an hour per day spent monitoring and optimizing, DSP B takes $1,000 in labor to run.

When counting labor, DSP A generates $381 in profit compared to DSP B’s $250. DSP A is the clear winner.

DSP A DSP B
Promotional Cost $1,000 $1,000
Interactions 3,000 3,000
Conv. Rate 2.50% 4.00%
Orders 75 120
Avg. Order Value $75 $75
Sales Generated $5,625 $9,000
Margin 25% 25%
Gross Revenue $1,406 $2,250
Labor Cost $25 $1,000
Profit $381 $250

Applying the Concept

Beyond labor, other expenses — e.g., software, creative design, agency retainers — could also change a channel’s return on investment, although not every expense is ongoing. Some are one-time or upfront charges that go away.

Thus, when attributing marketing expenses by channel:

  • Decide what to measure. Labor, software, or simply the cost of an ad or promotion?
  • Choose when to measure. Should the channel be measured per interaction? Or would monthly work better?
  • Plan for upfront expenses. Should upfront expenses be amortized? If so, over what period? How will channels with amortized costs compare with those having ongoing expenses?
  • Manage sensitive information. Some costs are sensitive or private. Will salaries be shared, or will the labor portion of the equation be closely held?
  • Decide how you will measure. Should marketers use time-tracking software?
  • Document the process. Record what, when, and how results are measured.
  • Collect only essential data. There’s no need to track labor or software costs if they don’t impact marketing decisions.

Lastly, remember that sometimes the cure can be worse than the illness. Attributing expenses by channel can drive performance at the cost of damaging staff morale. So attribute with prudence.

Optimized Landing Pages Reduce Ad Costs

Optimizing a website for organic search rankings is well-known. Less common is optimizing for ad engines, crucial for managing the cost and effectiveness of paid traffic.

Ad targeting on social media and search engines relies on algorithms that bid for placements on advertisers’ behalf. Algorithms evaluate an ad and its linked landing page, assigning a relevancy score that influences the cost and performance. Meta calls the score “Quality Rank”; Google refers to it as “Ad Rank.” Both prioritize the relevance of an ad to the landing page.

Bidding engines on Meta, Google, and others optimize around a goal, typically conversions (for ecommerce). Low click rates on ads drive up their costs, as do landing experiences with low conversions.

But an optimized experience can reduce ad costs. Note the chart below showing my firm’s A/B test on Meta. The test traffic was split: half went to a standard ecommerce product page and half to an ad-engine-optimized version. Both used the same ad and budget. The optimized experience received 28% more traffic due to lower per-impression ad costs and drove 99% more revenue than the product page.

3 AEO Hacks

Ad engine optimization (AEO) prioritizes the relevance of a landing page to an ad. Little relevance produces high bounce rates and low conversions. Ad engines detect this and penalize the campaign with higher ad costs. Custom landing pages are the traditional fix. They work well for bottom-of-funnel and long-running campaigns but not for top-of-funnel customer acquisition, especially on social media.

For example, a shopper searching Google for a “red four-slot toaster” has a clear purchase intent and would likely convert from a landing page featuring red four-slot toasters.

But a consumer on Facebook might see an aspirational kitchen ad that happens to feature a red four-slot toaster, requiring a different landing approach.

Consider these AEO hacks:

  • Mirror campaign creative. The simplest way to increase relevance is to mirror the images in the ad onto the landing page. This reassures shoppers they are in the right place, preventing an early bounce.
  • Make it easy to buy all of the products. The top reason shoppers bounce is they can’t find the product, or it looks different. Incredibly, landing pages without the promoted products are common. It’s especially problematic on mobile, where the product may be swipes away from where the shopper lands. Hence ensure the landing page shows all products in the ad, not just the category or one item.
  • Enable all intents. An ad showing a model on a beach wearing a t-shirt, shorts, and a hat could drive multiple interests: the t-shirt, shorts, summer, beachwear, or more. A landing experience focused on just one of those items will result in high bounces.

An optimized page makes it easy to buy, say, the advertised t-shirt while providing easy navigation to the other products. The page simultaneously shows all products in the ad and draws visitors into the broader category. The more visitors that browse, the more signals return to the ad engine, increasing the relevance score and lowering ad costs.

Algorithm Driven

To function, optimized pages require implementing the ad engine’s conversion API (“CAPI” for Meta and Google) to send the engagement signals. Testing and evolving the AEO experience is helpful — manually or automated.

Advertising on Meta, Google, and other channels is now algorithm-driven. Improving performance means optimizing for the algorithm. The combined quality of the ad and landing page directly impacts ad costs.

Charts: Global Entertainment and Media Trends

Global revenue of entertainment and media companies will grow at a 3.9% annual compound rate to reach $3.4 trillion by 2028. That’s according to PwC’s report, “Global Entertainment & Media Outlook 2024-28,” which covers 11 revenue segments across 53 countries and territories.

Per PwC, revenue from advertising and connectivity (i.e., internet access) is growing faster than consumer spending (purchases of games, events, apps). The study anticipates that advertising revenue will surpass $1 trillion by 2026 and double from 2020 levels by 2028.

In addition, the study shows growth in online ads, as revenue from internet advertising worldwide in 2028 will almost double that of 2021.

Driven mainly by Asia-Pacific users, the gaming industry continues to be one of the fastest-growing sectors, with revenue projected to exceed $300 billion by 2028.