Holiday campaigns in Australia continue to evolve with shoppers starting earlier, spending more intentionally, and expecting brands to deliver value beyond discounts.
That’s a big shift that advertisers need to be aware of—it presents both a challenge and an opportunity. The question is no longer how to stand out during peak season, but how to stay relevant across a longer, more nuanced holiday journey.
In 2024, Australians spent a record-breaking $69 billion online, a 12 per cent year-on-year increase that accounted for 16 per cent of total retail sales, according to data from Australia Post’s 2025 eCommerce Report. But the real story isn’t just about volume. Microsoft Advertising data showed conversion rates in January were 15 per cent higher year-on-year, and nearly a quarter of all holiday clicks and conversions occurred after Christmas. The holiday season doesn’t end in December. It extends into the new year, driven by gift card redemptions, returns, and self-gifting moments.
Microsoft Advertising data shows 65 per cent of November conversions and 44 per cent of December conversions originated from clicks in October. Brands that wait until November to launch campaigns are missing the early movers – those who research, plan, and purchase ahead of the rush.
“The holiday season isn’t just for big retailers,” said Elliott Knight, Microsoft’s director SMB APAC. “Whether you’re a boutique brand or a national chain, there’s a real opportunity to connect with Australian shoppers who are more intentional and value-driven than ever. With the right strategy, every business can thrive.”
To meet this shift, advertisers are turning to AI-powered tools like Performance Max and Audience ads. These solutions help brands reach high-intent shoppers across Microsoft’s ecosystem, including Bing, MSN, Outlook, and Xbox. In Australia, pairing Performance Max with search ads lifted conversion rates by 3 per cent and lowered cost per acquisition by 8 per cent.
Relevance is the new currency
While 81 per cent of Australian shoppers plan to participate in sales events this year, they’re not just chasing discounts. They’re looking for value, quality, sustainability, and trust. In fact, 70 per cent of Gen Z say they’ll pay more for sustainable gifts, per Microsoft Advertising.
Audience ads are proving especially powerful in this space. Exposure to these ads drives a 170 per cent higher conversion rate compared to users who weren’t exposed. By telling brand stories on premium placements and retargeting engaged users with timely offers, advertisers can build trust and drive results.
Generational differences also matter. Gen Z shoppers are impulse-driven and mobile-first, while Baby Boomers value sentiment and savings. Microsoft Copilot is resonating with younger audiences—33 per cent of users are aged 18–29—and Copilot-powered ads deliver 73 per cent higher click-through rates and 16 per cent stronger conversion rates compared to traditional search. Tailoring creative and timing to each generation’s habits is no longer optional. It’s table stakes.
“We’re seeing a clear shift in consumer behaviour,” Knight explained. “Australians are starting their holiday shopping earlier, and brands that show up in October are capturing more conversions and building stronger momentum. Early planning isn’t optional anymore – it’s essential.”
AI Is driving real results
AI is transforming campaign performance. When jewellery brand Pandora adopted Microsoft’s AI bidding, it saw a 900 per cent increase in revenue. Copilot interactions boost purchasing behaviour by 53 per cent overall, and by 194 per cent when shopping intent is present. These aren’t just stats. They’re signals of a new era in advertising.
Advertisers who integrate AI into their creative and optimisation workflows are significantly outperforming those relying on manual processes. From content generation to real-time bidding, AI is helping brands learn faster, scale insights, and drive stronger results.
“AI is levelling the playing field,” continued Knight. “It’s helping marketers of all sizes launch smarter campaigns, optimise in real time, and reach the right audiences with precision. What used to take days now happens in minutes and that’s a game-changer.”
The power of omnichannel
While Cyber Five—the five days from Thanksgiving in the US to Cyber Monday—still matters, it’s no longer the only game in town. Nearly half of all converting user journeys were exposed to five different ad formats, and users who saw both Audience and Search ads spent 35 per cent more than those who saw Search alone. Integrated journeys—linking video awareness to Shopping ads, connecting search to display retargeting—are the key to guiding shoppers from discovery to decision.
In Australia, January is a second wave of demand. Campaigns that stayed live into the new year captured 23 per cent of clicks and 24 per cent of conversions, all at a 12 per cent lower CPC. For brands, this is a high-intent, low-competition window that’s often overlooked.
Elevate messaging beyond discounts with emotional intelligence
Price alone won’t win this season. Personalisation—like improving the relevance of your advertising messaging—can allow you to create deeper customer connections, stronger brand moments and more effective campaigns during the holidays.
Advanced personalisation improves the relevance of your advertising messaging to make your audiences feel understood, valued, and inspired to act—ultimately building long-term loyalty.
And to make them feel like, “This is a brand for someone like me,” you have to go beyond putting a famous person in an ad or a sponsored social post. Instead, personalising your messages with emotional intelligence starts with aligning your product truths with one or more of the 12 feelings of inclusion.
By combining your promotional offers with your product truths and features your customers might value—such as sustainable products, privacy policies, accessible features, or purpose-driven company commitments—your audiences will feel more invited to connect with your brand.
Campaign best practices
- Launch as early as possible. Holiday conversions come from October clicks. Launch holiday campaigns early with seasonal messaging and gift solutions to reach shoppers as they plan and avoid peak season competition.
- Lean into AI. Use Copilot and Performance Max to automate creative, optimise bidding, and personalise messaging at scale.
- Segment by generation. Match tone, timing, and format to how each age group shops. Gen Z responds to urgency and mobile-first creative. Boomers value trust and clarity.
- Stay live into January. Target gift card holders and New Year’s resolutions with refreshed messaging and remarketing lists.
- Go omnichannel. Connect search, display, video, and shopping ads to guide users through the full journey—from awareness to conversion.
Emerging trends for 2026
Looking ahead, ethical and value-aligned gifting will continue to rise. Digital-only bundles, AI-native shopping journeys, and showroom-style ad formats are reshaping how consumers discover and decide. Loyalty programmes will need to evolve into experiences, and voice-activated, screenless shopping will become more mainstream.
“The future of holiday advertising is conversational, personalised, and powered by AI,” said Knight. “It’s not just about being seen. It’s about being relevant, timely, and trusted. That’s where the real impact happens.”
Holiday success isn’t about doing everything. It’s about doing the right things at the right time. Whether you’re planning for Black Friday, Boxing Day, or the January surge, now’s the time to rethink your strategy and start early.
This season, don’t just advertise. Celebrate smarter.
