Why Seasonality Adjustments Keep Failing Advertisers on Black Friday

The Billions Lost to Good Intentions

Every year, digital marketers face the same decision: should they use Google and Microsoft's recommended seasonality bid adjustments during Black Friday and Cyber Monday? The platforms strongly encourage it. The logic seems sound--expect conversion rates to spike, so alert Smart Bidding to raise bids faster and capture more volume.

But new research suggests this conventional wisdom may be costing advertisers millions in wasted ad spend. A comprehensive three-year study analyzing tens of billions of impressions reveals that for major retail holidays, seasonality adjustments often do more harm than good. Optmyzr's three-year study found consistent patterns across 15,000+ advertisers that challenge conventional practices.

This finding has significant implications for AI-powered advertising strategies and how businesses approach marketing automation during peak retail periods.

The Core Insight: Google Already Knows It's Black Friday

The most counterintuitive finding from the study is this: Google's Smart Bidding algorithms already understand when Black Friday is coming. BFCM is one of the most predictable spikes in global commerce--it's not a surprise event that catches the platform off guard.

Google's bidding models are trained on vast amounts of historical data spanning years of retail behavior. They know exactly when consumer behavior shifts globally during this week, and they've learned to respond appropriately without human intervention. This reflects the broader trend of AI transforming search advertising across platforms.

When researchers analyzed performance data across 2022, 2023, and 2024, the "smartness" of Smart Bidding became obvious:

• Advertisers without adjustments: Smart Bidding consistently detected the CVR spike, increased bids appropriately, and kept ROAS stable
• Conversion rate lifts captured: 17.5% in 2022, 11.9% in 2023, 7.5% in 2024

For any predictable, recurring event with sufficient historical data, Smart Bidding has likely already learned the optimal response. Optmyzr's research confirms that the algorithm behaves consistently and rationally without any human override.

When CPCs Rise Faster Than Conversion Rates

When CPCs rise faster than conversion rates, efficiency drops. This is exactly what happened to advertisers who tried to outsmart the algorithm:

• 2022: Non-adjusters saw 2% ROAS decline; adjusters saw 17% decline (9x worse)
• 2023: Non-adjusters saw 1.5% ROAS decline; adjusters saw 10% decline
• 2024: Non-adjusters actually improved ROAS by 5.7%; adjusters dropped 15.7%

The efficiency gap widened over time, suggesting Smart Bidding's ability to optimize for Black Friday improved while the drawbacks of manual adjustments remained constant.

The Volume Trade-Off

If your objective is maximizing revenue regardless of cost efficiency, seasonality adjustments work--but at a price:

Use case: Clearing inventory or fighting for market share where margin is secondary. For businesses focused on sustainable profitability through paid search optimization, the data suggests letting Smart Bidding handle Black Friday without manual overrides.

The volume-focused strategy may make sense when combined with AI automation for retail campaigns that help manage complex product catalogs efficiently.

Trust the Algorithm (With Guardrails)

The evidence is unambiguous: seasonality adjustments during known holidays consistently lead to overshooting, volatility, and lower ROAS.

Recommendations:

1. For mainstream retail events: Do not use seasonality adjustments. Let Smart Bidding handle the macro trends.
2. For unique, brand-specific spikes: Use seasonality adjustments, as Google has no historical signal.

Trusting the algorithm doesn't mean "set it and forget it." Focus your energy on instrumentation:

• Anomaly alerts for sudden CPC shifts
• Budget pacing monitors to prevent runaway spend
• Rule engine automations to cap excessive bids

Broader Lessons for AI-Powered Advertising

This study offers principles that extend beyond bidding into your overall AI automation strategy:

• Automated systems with training data outperform human intuition for predictable scenarios
• Manual overrides introduce volatility even when they feel helpful
• Data-driven optimization over time improves results while one-time adjustments may cause lasting negative effects

The businesses that succeed with AI-powered advertising are those who learn to trust automated systems while maintaining oversight for exceptional circumstances. Similar principles apply to how AI is reshaping search experiences--automation handles predictable patterns while humans focus on strategic decisions.

Implementing smart bid automation with proper monitoring ensures you capture the benefits of AI without unnecessary volatility.

For most advertisers during major retail events: step back and let AI automation do what it was designed to do.

Sources

1. Optmyzr - Do Seasonality Adjustments Actually Help During BFCM? A 3-Year Study Says No.
2. Search Engine Land - Study: Why seasonality adjustments keep failing advertisers on Black Friday