Why Black Friday Can Be A Black Hole for Smaller Brands

Yes, Another Black Friday post!

The irony of adding another Black Friday blog to the pile isn’t lost on me. Thousands of them appear every November. If anything, the sheer volume of noise is the perfect metaphor for the problem itself. Everyone shouts but very few are heard. The brands with the biggest budgets tend to drown out everything else by default.

For smaller brands, the challenge isn’t that Black Friday exists, it’s that the commercial gravity of the moment is so strong it bends everything around it. Ad costs rise because competition spikes. The brands that entered the month feeling confident often emerge feeling like they’ve poured money into a black hole and can’t quite explain what happened.

Tightening Economics

The economics are simple enough. When every major retailer floods the market with heavy creative, deeper discounts and month-long campaigns, the cost of simply getting in front of your own customers increases. CPMs start to climb, CPCs drag themselves up with them and the average cost per sale loses its usual sense of proportion. It might feel like you’re being punished for doing something wrong, but you're not, you’re simply playing the game at the exact moment the rules become less forgiving.

At Paladin, we’ve seen this pattern across enough brands to treat it as a seasonal inevitability. In our case studies, there are clients who thrive during Q4 because they’ve spent the rest of the year establishing predictable acquisition costs and building a strong retention base. There are others who arrived at November still firefighting their funnel and ended up relying on discounting. The difference was never the sale; it was the health of the brand before the sale started.

The Need For Strong Acquisition

This is the part many underestimate. A sale is not a strategy; it’s an accelerant. If your customer base is warm, engaged and actively buying throughout the year, then your Black Friday moment becomes an efficient revenue event. You’re not paying over the odds for their attention and you’re not fighting to introduce yourself to them in a crowded room. You’re simply giving existing customers permission to buy more.

But when acquisition has been shaky all year and loyalty is more of an aspiration than a reality, Black Friday becomes disproportionately expensive. You take on all the cost inflation without any of the insulation that strong retention usually provides. And we've found often that the customers you do acquire are discount-first shoppers who disappear as quickly as they arrived.

Loyalty as a commercial asset

This is where the duality lies: every brand wants new customers – they drive long-term brand growth. Relying solely on loyal customers is a slow drift to stagnation. But trying to attract new customers in the thick of Black Friday is a harder ask than most people admit. New shoppers are pulled towards names they already know, or brands that feel safe. Smaller brands can compete, but the price of that competition can often increase faster than the revenue does.

That’s why loyalty built across the rest of the year becomes so valuable. Not as a soft, fluffy brand ideal, but as a hard commercial asset. Loyal customers open your emails, engage with your ads and buy without needing to be bribed into it. They give you a buffer when the wider market becomes noisy. They create the steady revenue that allows you to pursue acquisition without panicking about short-term performance. The brands we saw in our case studies performing best during Q4 had this in common: they didn’t treat Black Friday as the start of the race, but a checkpoint on the course.

Building strength before November

The irony is that strong loyalty makes acquisition easier, not harder. When customers talk about your brand without being prompted, when creative consistently performs because the audience already understands your value, you can acquire new customers from a position of strength.

This is why the smaller brands who hope Black Friday will magically make everything work tend to feel short-changed. It’s not that the strategy is wrong. It’s that the moment itself magnifies whatever state the brand is already in. If your funnel is healthy in October, Black Friday will likely reward you. If your funnel is fragile, Black Friday will expose it.

A simple choice

And so the question becomes painfully straightforward: do you want Black Friday to be a multiplier or a sinkhole? Because the work required to make it the former happens in February, April and July, not in the frantic fortnight before launch.

If there’s one consistent lesson from the brands we’ve worked with, it’s this: the year is long, and Black Friday is short. The brands who treat November as the main event spend the rest of the year catching up. The brands who treat it as one moment among many tend to grow faster, spend more efficiently and build audiences who stick around once the discounts end.