Running Paid Ads During the Holidays: Budgets, Timing and Rising Costs
Every business wants attention in late November, and ad platforms price that demand accordingly. Small businesses can still run profitable holiday ads, but only with a plan for timing, budget and audiences. This guide shows you how to split your spend across the season and avoid paying peak prices for clicks that never turn into sales.
Key takeaways
- Ad costs commonly rise in the weeks around Black Friday because competition for the same audiences jumps.
- Start early: build audiences and test creative in October and early November, when attention is usually cheaper.
- Put your peak-week budget behind warm audiences such as past customers, subscribers and site visitors.
- Set a profit-based limit on what you will pay for a sale, and stop spending when you hit it.
- Shift your message and spend as shipping deadlines pass, toward gift cards, local pickup and January.
The holiday season brings the most motivated shoppers of the year. It also brings the most crowded ad auctions. Big retailers with large budgets bid on the same people you want to reach, and prices for impressions and clicks tend to climb as a result. A campaign that was profitable in September can lose money the week of Black Friday if you simply raise the budget and hope.
The answer is not to avoid ads altogether. It is to be deliberate about when you spend, who you target and how much you are willing to pay. This guide focuses on the holiday-specific decisions. If you are new to advertising, the site's beginner guides to Google Ads and Facebook and Instagram ads, plus the guides to retargeting and to ad budgets and ROAS, cover the fundamentals.
Why ads cost more in the holidays
Most ad platforms run auctions. When more advertisers want to reach the same people at the same time, the price to win those auctions tends to go up. In late November, retailers of every size increase spend at once, so costs per thousand impressions and per click often rise, sometimes sharply, in the days around Black Friday and Cyber Monday.
The good news is that buyers are also more ready to purchase. Adobe Analytics reported that US shoppers spent about $41.1 billion online over the five days from Thanksgiving to Cyber Monday in 2024. Higher costs can still be worth paying if your conversion rate and order values rise with them. The point is to check, not assume.
Common mistake
Launching brand-new campaigns on Black Friday morning. New ads may need time to pass platform review, and many ad systems need a period of data before their automated bidding settles down. Launching cold into the most expensive week means paying top prices while the system is still learning.
The four phases of holiday advertising
Think of the season as four phases, each with a different job for your ads.
| Phase (2026) | Main goal | Who to target | Share of holiday budget (example) |
|---|---|---|---|
| October to mid November | Build audiences, test creative | New prospects, lookalike or interest audiences | 20% to 30% |
| Thanksgiving week to Cyber Monday (Nov 23 to Nov 30) | Convert interest into sales | Warm audiences: visitors, subscribers, past buyers | 35% to 45% |
| December 1 to shipping cut-off | Gift sales before deadlines | Warm audiences plus gift-intent searches | 20% to 30% |
| Last-minute and after Christmas | Gift cards, local pickup, Boxing Day, January | Local shoppers, recent buyers | 5% to 15% |
These percentages are an illustration, not a formula. A local shop might put more into the final two weeks, while an online store with slow shipping might front-load spend into November. Adjust the split to your own calendar and margins.
Phase 1: Build before you sell
Use October and early November to grow the audiences you will sell to later. Run ads that promote your gift guide, an early-access sign-up or a bestselling product at full price. Every visitor and subscriber you gain now becomes a warm prospect for Black Friday, when warm audiences are usually far cheaper to convert than strangers.
This is also the time to test creative. Try two or three angles, such as a gift idea, a product demo and a customer review, and see which performs best before costs rise.
Phase 2: Concentrate on warm audiences at the peak
From Thanksgiving week to Cyber Monday, focus most of your spend on people who already know you. Remind site visitors of your offer, show bestsellers to past customers and promote early access to subscribers. Keep a smaller budget for new prospects, but watch it closely, since cold audiences are where rising costs hurt most.
Phase 3: Gifting and deadlines in December
After Cyber Monday, shift your message from deals to gifts. Promote your gift guide, bundles and "arrives before Christmas" messages. Shopping and search ads can work well now because people are searching for specific gift ideas.
Phase 4: After the shipping deadline
Once your last standard shipping date passes, stop ads that promise delivery by Christmas. Switch to gift cards, local pickup, local delivery and Boxing Day or January offers. Many advertisers pull back after Christmas, so attention may become cheaper again, which can make late December and January a good time to reach new customers.
How to set your holiday ad budget
Start from what you can afford to pay for a sale, not from what you would like to spend.
- Work out your profit per order. Take your average holiday order value and subtract product costs, discounts, shipping, packaging and payment fees.
- Set your maximum cost per sale. Decide how much of that profit you are willing to spend on ads. If you value new customers highly because they come back, you might accept a higher figure for first-time buyers.
- Estimate how many sales you need. Use your sales target for the season and the share you expect ads to drive.
- Multiply and cap. Maximum cost per sale times target ad-driven sales gives you a ceiling for the season. Split it across the phases above.
- Review daily at the peak. During Black Friday weekend, check cost per sale at least once a day and move money from weak campaigns to strong ones.
Hypothetical example
Suppose a small online jewelry shop has an average holiday order of $80 and makes $32 profit per order after product costs, discounts and fees. It decides it can spend up to $16 in ads per sale and wants 300 ad-driven sales over the season. That sets a ceiling of $4,800. If costs rise so much on Black Friday that each sale costs $25, it shifts spend to its email list and site visitors, where sales are cheaper, rather than paying more than it can afford.
Pro tip
Raise budgets gradually rather than all at once. Many automated bidding systems react to sudden large budget jumps by re-entering a learning period. Increasing a little at a time in the week before Thanksgiving is often smoother than doubling everything on Black Friday.
Practical setup tips for the season
- Submit ads early. Get holiday creative approved in mid-November. Review times can lengthen during busy periods.
- Schedule changes in advance. Use automated rules or scheduled ads to switch offers on and off at the right times, including the end of a sale.
- Refresh creative. People see a lot of the same ads in December. Rotate new images or videos every week or two to fight ad fatigue.
- Exclude recent buyers from sales ads where possible, so you are not paying to show a discount to someone who just bought at full price.
- Check your tracking. Test that purchases are recorded correctly before the peak. Bad data leads to bad decisions when you have no time to investigate.
- Watch stock. Pause ads for products that sell out. Paying for clicks to a sold-out page wastes money and annoys shoppers.
Ad platforms update their features, policies and recommended settings often, and costs vary by country, industry and audience. Treat any benchmark you read, including the examples here, as a starting point and let your own results guide decisions.
Search ads versus social ads in the holidays
Search and social ads play different roles at this time of year. Search ads catch people who are already looking, such as someone typing "gift for gardener" or your shop's name. Social ads reach people who are scrolling and may not have thought of your product yet. In the weeks before Black Friday, social ads are useful for building interest and audiences. At the peak and in December, search and shopping ads often capture the most ready-to-buy intent. If your budget is small, consider protecting searches for your own brand name first, because those shoppers are already looking for you.
When holiday ads make sense
- Your products are giftable and in stock
- You have healthy margins after discounts
- You have warm audiences to retarget
When to scale back
- Your margins are already thin before ad costs
- You cannot fulfil more orders in time
- Cost per sale stays above your limit for several days
Your holiday ads checklist
- Calculate profit per order and your maximum cost per sale
- Set a season budget ceiling and split it across four phases
- Run audience-building and creative tests from October
- Get Black Friday creative approved by mid-November
- Focus peak-week spend on warm audiences
- Schedule ad changes for sale start, sale end and shipping deadlines
- Prepare gift card and local pickup ads for the final week
- Plan a January campaign for new customers you won
Frequently asked questions
When should I start holiday ads?
Many small businesses start building audiences in October and launch sales campaigns in the week before Thanksgiving. Starting earlier gives ad systems time to learn and lets you test creative before costs rise.
Should I stop advertising if costs go up too much?
Pause or reduce campaigns whose cost per sale stays above your limit, especially those aimed at new audiences. Keep spending on warm audiences and campaigns that remain profitable. Your email list and social channels can carry more of the load.
Are ads cheaper after Christmas?
Competition often eases after Christmas as many advertisers reduce spend, so costs may fall. That can make late December and January a good time for Boxing Day promotions, gift card redemption campaigns and new customer offers, though it varies by market.
Do I need different ads for different countries?
If you sell internationally, yes. Adjust for local shopping dates such as Singles' Day or Boxing Day, local currencies and shipping deadlines, and local holidays your customers celebrate.
Related reading
The bottom line
Holiday ads can pay off, but only if you plan for rising costs. Build audiences and test creative early, concentrate peak spend on people who already know you, set a profit-based limit for each sale and change your message as shipping deadlines pass. Spend with discipline in November and December, and you will keep the profit that the busy season is supposed to bring.
