It’s a Monday morning in late October, and a marketing manager is staring at a spreadsheet. The holiday budget is due on Friday. Last year’s numbers are in one tab, a stack of industry predictions is in another, and someone in finance has already asked the question that decides everything: how much more will this cost us than last time?
Every autumn, the same advice appears. Ad costs spike in the fourth quarter, so budget more, start earlier and brace yourself. It’s repeated so often that most marketers treat it as settled, and plenty of finance teams approve a bigger Q4 budget on that basis alone. The trouble is that a budget built on a rule of thumb can be wrong in both directions. Set it too low and you run out of money in the middle of Cyber Week. Set it too high and you pay for reach you never needed.
It’s good advice to take seriously, but it isn’t the full picture. Last year’s results didn’t quite match the rule of thumb, and this year’s season has a few differences of its own: it starts earlier, more of your spend is steered by automation, and the platforms themselves are changing. With Black Friday on November 27 and Cyber Monday on November 30, there’s still time to plan from evidence rather than habit.
In this post we’ll look at what the industry guides claim, what last year’s data actually showed, and what’s different about this season. We’ll walk through how we approached holiday campaigns for a Norwegian retailer, then finish with a practical budget plan, a checklist and answers to the questions we hear most often.
The Rule of Thumb Everyone Repeats
Several 2026 ad-cost guides put numbers on the Q4 effect. One says CPMs, the price of reaching a thousand people, rise 40 to 80% on Meta and 25 to 50% on Google during the holiday period. Another puts the increase on Meta at 30 to 50% during Black Friday and Christmas.
Those figures come from vendor blog guides, and their sourcing isn’t always clear, so it’s worth treating them as a rough guide to how the market feels rather than a forecast you can budget against. The direction makes sense: more advertisers compete for the same shoppers, so auctions get more crowded. The size of the effect is the part that varies.
For businesses, the takeaway isn’t necessarily to spend more, but to make every part of the campaign work harder. Review past campaign performance, identify which audiences and creatives delivered the strongest results, and shift budget towards what has consistently worked. Keep an eye on cost per acquisition and return on ad spend rather than judging success by reach or clicks alone.
It also helps to plan for different scenarios before costs rise. Set clear spending limits, decide when to adjust underperforming campaigns, and leave room to test new creative without putting the entire budget at risk. That way, you’re responding to actual campaign data instead of making rushed decisions when competition peaks.
What Last Year Actually Looked Like
Tinuiti’s report on Q4 2025 found that clicks and impressions surged while prices softened: Google Search CPC fell 1%, Facebook CPM dropped 13% and YouTube CPM declined 18% year over year. More people clicked and more ads were shown, and yet the cost of reaching them didn’t climb the way the rule of thumb predicts.
That doesn’t mean costs will fall this year, only that “Q4 always costs more” isn’t a law.
One year of data doesn’t overturn a pattern, and this report covers last year, not this one. But it’s a useful reminder that costs depend on your category, your creative and your competition, not just the calendar. A brand with strong creative and clean product data can see a very different Q4 from the average.
What’s Different This Season
Three things stand out for 2026.
First, the season starts early. Adobe forecasts $95.8 billion in online spending during October alone, up 8%, and notes that many retailers ordered holiday inventory early and will begin promotions in the coming weeks. By Cyber Week, which Adobe expects to bring in $47.5 billion, discounts of up to 30% are likely. Shoppers are being courted well before Black Friday, which means your ads are competing earlier too.
Second, more of your spend is decided by automation. In Q4 last year, Google’s Performance Max drove 62% of retailer spend on Shopping ads, and Meta’s Advantage+ accounted for 27% of retail spend on Meta. When the platform decides where your money goes, the inputs you control matter more: your product feed, your creative and your conversion tracking.
Third, the platform balance is shifting. eMarketer projects Meta will out-earn Google in ad revenue for the first time in 2026. That doesn’t change what you should do on Monday morning, but it’s a sign that where shoppers spend their attention, and where advertisers spend their money, is moving.
A Practical Example: Gutta på Haugen
We saw many of these ideas at work with Gutta på Haugen, an Oslo specialty food retailer we rebuilt as an online store. The paid media side combined Meta and Google, with Advantage+ and catalog sales for discovery, Performance Max for mid-funnel reach, branded and non-brand search, and remarketing for high-intent shoppers. Campaigns were scaled seasonally across Christmas, Easter and summer, with creative rotation and feed optimisation tied to the shop’s own priorities.
The results page reports a 4.24x blended return on ad spend across Meta and Google. We should be upfront about what that figure is: it comes from Kilowott’s project reporting, not from verified access to the client’s ad accounts, and no media-spend figure is published, so there’s no budget base to audit it against. Read it as a direction, not a benchmark. The point of the example isn’t the number. It’s the structure: a store built to convert, with campaigns designed around the whole funnel and scaled to the calendar. We go deeper on the approach in what 4.24x blended ROAS looks like when the store is built right.
How to Plan Your Holiday Ad Budget
Start with your own history. Last year’s CPM, CPC and cost per purchase in your account are a better baseline than any industry average. Build your Q4 plan around how your campaigns behaved, then adjust for what’s changed.
Don’t wait for Black Friday. With October spending already forecast at record levels, the warm-up period matters. Use it to test creative and build remarketing audiences while costs are lower.
Fix the landing experience first. Paying more to send shoppers to a slow or confusing checkout wastes the increase. Our guide to fixing your mobile checkout before Black Friday covers the basics.
Give the automation good inputs. If Performance Max and Advantage+ are deciding where spend goes, a clean product feed, strong creative variety and accurate conversion tracking are your main levers.
Protect your high-intent traffic. Branded search and remarketing usually convert best, so make sure budget caps don’t switch them off at the busiest moment.
Set limits before you start. Decide in advance the cost per purchase at which you’ll pause or shift spend, so you’re not making that call in the middle of Cyber Week.
Judge results across channels together. A blended view of return on ad spend shows what the whole mix is delivering, which a single-platform dashboard can hide.
A Q4 Ad Budget Checklist
- Pull last year’s Q4 CPM, CPC and cost per purchase from your own account
- Set a baseline budget and a ceiling for cost per purchase before the season starts
- Start creative testing and remarketing audience building in October
- Audit your product feed for accuracy, titles, images and stock status
- Check that conversion tracking works on mobile checkout
- Confirm branded search and remarketing have budget protected through Cyber Week
- Prepare a range of creative formats so automation has options to test
- Agree a decision rule for pausing or shifting spend during peak days
- Plan the weeks after Cyber Monday so budget isn’t cut off mid-season
What to Do This Week
If you only have time for a few actions before the rush, these are the ones that pay off most.
Pull the numbers. Export last year’s Q4 performance from every ad account you run and put it next to this year’s pre-season trend. That single comparison will tell you more than any industry report.
Walk through your own checkout on a phone. Add a product to the basket and pay, as a customer would. If it takes more effort than it should, fix that before you raise any budget.
Check your feed. Look for out-of-stock items still being advertised, missing images and titles that don’t match what shoppers search for. With automation choosing where spend goes, a messy feed costs money quickly.
Agree who decides what. Name the person with authority to pause or shift spend during peak days, and give them the thresholds in advance. Decisions made at 11pm on Cyber Monday tend to be rushed ones.
Book the review. Put a date in the diary for the week after Cyber Monday to compare results against the plan. Without it, the lessons from this season will be forgotten by next autumn.
Frequently Asked Questions
Do holiday ad costs always go up? Not necessarily. Several industry guides say CPMs rise sharply in Q4, but Tinuiti’s report on Q4 2025 found that Google Search CPC fell 1% and Facebook CPM dropped 13% year over year, even as clicks and impressions grew. Costs depend on your category, creative and competition, so check your own account’s history.
When should I start my holiday campaigns? Earlier than Black Friday. Adobe forecasts $95.8 billion in US online spending in October alone, up 8%, and notes that many retailers will begin promotions in the weeks before the main event. Starting in October lets you test creative and build remarketing audiences before the busiest days.
How much of my spend is controlled by the platforms now? A large share. In Q4 2025, Performance Max accounted for 62% of retailer spend on Google Shopping ads, and Meta’s Advantage+ accounted for 27% of retail spend on Meta. That makes your product feed, creative variety and conversion tracking the main things you control.
How do I know whether my holiday ads worked? Compare results against your own baseline and judge channels together, not one at a time. Look at return on ad spend across the whole mix, the cost per purchase against your ceiling, and how many first-time buyers came back after the season.
What should I do if costs rise faster than I expected? Use the limits you set in advance. Protect branded search and remarketing, which tend to convert best, and shift spend away from broad prospecting if the cost per purchase passes your ceiling. Having the rule agreed beforehand is what stops a spike turning into an overspend.
Plan for the Season You’re Actually In
The most useful way to think about holiday ad costs is as a question about your own account, not about the market. The industry rule of thumb is a reasonable warning, last year’s data is a reasonable counterweight, and the right answer sits somewhere in the middle for each brand.
That’s a more comfortable position than it sounds. You can’t control what other advertisers do, how the platforms change their auctions, or when shoppers decide to buy. You can control how clean your data is, how well your site converts, how much you’ve tested and how clearly you’ve decided what to do when things move. The stores that fare best are rarely the ones with the biggest budgets. They’re the ones that arrive at November with clean data, a converting site and a plan for when to push and when to hold.
Whatever the prices do, the work you do in the next few weeks decides how much of the season you capture. If you’d like a second pair of eyes on your plan, our digital marketing team builds exactly this kind of seasonal plan with clients, and our case studies show how it has played out across other brands. We’re happy to talk it through before the rush starts.
