श्रेणी आर्काइव्ज़

Though founded in the 1960s, Walmart came into its own as a “mom and pop” store killer by the late 1970s. Overnight, independently-owned stores folded as Walmart sold products with greater efficiency and lower prices. Product marketers worked tirelessly to place their products on Walmart shelves. Sixty years later, the company’s grasp over physical retail remains.

We will remember the Apple iOS privacy changes as a similarly transformative moment for retailers. Like then, it is beginning to separate the haves from the have-nots.

For a small, small selection of brands, performance marketing is not essential. This essay is about two of those companies and everyone else who seems to be playing a different game all together.

Two digitally-native brands are in the press for their growth; their founders are two of the most visible human beings on the planet. First, Robyn “Rihanna” Fenty is floating a $3 billion IPO for her brand Savage x Fenty.

Savage x Fenty was launched in 2018 and has since collected a healthy stash of venture capital to support its growth. The brand has raised $310 million to date. Most recently, it raised $125 million in January in a round led by Neuberger Berman and other existing investors L Catterton (LVMH’s investment arm), Avenir, Sunley House Capital and Marcy Venture Partners. Positioning itself as an anti-Victoria’s Secret by embracing all body types, genders and customers who have felt excluded by the mainstream lingerie giant, Savage x Fenty has become a formidable industry force. Owned by TechStyle Fashion Group, the brand built up hype around its eCommerce store with annual fashion shows airing on Amazon Prime. Last year, Savage made moves into physical retail, with five stores now open and plans to hit 10 this year. Though IPO plans are not confirmed, as reported by Bloomberg, they’re on the table for 2023.

Meanwhile, Kim Kardashian is expanding the Skims brand to include swimwear. In a recent report in Business of Fashion, she and co-founder Jens Grede (also behind brands including Frame and Good American) eschew performance marketing for a brand like hers:

Skims’ brand work, plus Kardashian’s promotion on social media, have made performance marketing all but unnecessary.

“[Performance marketing] would be very ineffective for us because we’re always running out of stock,” Grede said. Besides, he doesn’t believe it suits Skim’s long-term goals.

Instead, the report says, Skims spends on “brand-building” marketing efforts that include billboards, high-profile photographers and Kardashian tagging the brand in her own Instagram posts. Skims is on track to add 2 million customers by the end of this year, and it’s biggest restraint is fulfilling orders and keeping items in stock as supply chain disruptions drag on. It’s a problem and a curse, but overall, the brand’s in a healthier position than other DTC brands that are now trying to grow outside of paid marketing.

But most brands do not have the visibility or influence of a Kardashian on their cap tables. That leaves two options for many: partner with a celebrity that reduces the cost of marketing and improves cash conversion cycles or build systems to reevaluate how the brand measures marketing conversions.

A recent report by Catherine Perloff of AdWeek covered the strategies employed by Ben-Zvi, an agency-based performance marketer with brands like e.l.f. Cosmetics, Etsy, and Revlon. The report explained how he built strategies around third-party tools (and his agency’s proprietary technology) to identify correlations between active campaigns and conversion outcomes.

Before identifier deprecation, measuring a campaign’s effectiveness depended a lot on statistics from Meta, said Ben-Zvi, who works with brands such as e.l.f. Cosmetics, Etsy and Revlon. “It was all about figuring out what is the proper attribution window based on what Facebook is telling me,” he said.

Now Ben-Zvi relies on various tools, including looking for correlations between when a campaign was active and certain conversion outcomes, leveraging his agency’s proprietary technology. For example, when the campaign was active, did the advertiser see a lift in direct sales on its website or an increase in branded search via Google? Ben-Zvi said he has also looked to third-party tech, such as Blackcrow.ai, which helps brands build their own audiences to target without Meta.

Another strategy mentioned in this AdWeek report was the collection of first-party data:

Ashley Karim-Kincey, vp of media at creative agency Dagger, said she uses tech such as floodlight tags on the brand’s website to track who has visited and double-click tracking tags within their ads to cross-reference the data, both of which are Google ad-tech products.

In a series of essays devoted to the likelihood of this type of disruption, in April 2021 we highlighted the utility of first-party data as iOS changes were due to disrupt the performance marketing industry. From On First Party Data and Media:

First-party data will define the next wave of advertising and sales. American businesses are now in a race: They’ll build, acquire, or market to the audiences that have it. The independent media industry is quick to discuss outcomes but rarely do we dissect the early steps. As more pursue first-party data, audience development will become one of the most coveted skills on the market.

To acquire targeted customers, first-party audiences are replacing third-party collections.

In our follow up on content fortresses, I continued:

First-party data was well on its way to becoming the key asset for advertisers; Apple’s decision further moved advertisers to prioritize its collection, refinement, and monetization. Apple will eventually eliminate data sharing across vendors, a long-time complaint of many of its users. In doing so, walled gardens will take the place of the open web funded by this data practice. Media companies and commerce companies will become indistinguishable, in many ways. The law of linear commerce is no longer just about brands and their content strategies or publishers and their eCommerce development.

But how did we get here? Wayne Ma of The Information published an inside look into Apple’s decision to “blow up the digital ads business.” Apple’s pivot to privacy has had serious implications for Meta, Facebook’s parent company, which “ expects the changes to shave $10 billion off its revenues this year because of their impact on the company’s prodigious data collection practices,” according to Ma.

But in interviews with The Information, people with direct knowledge of Apple’s privacy deliberations stressed that Meta wasn’t the primary target of the company’s changes, despite a long history of thinly veiled rhetoric from Cook viewed as critical of the company’s practices. Instead, Apple was going after the most egregious forms of abuse—for example, weather apps that sold data about users’ locations to brokers, the people say.

Apple is now trying to close the “Pandora’s box” it opened with its data sharing that was upholding entire surveillance and advertising industries. While one is more nefarious than the other, they are inextricably linked. And performance marketing is in the crosshairs of the crackdown. Already, marketers have become aware that over-reliance on Facebook and Instagram ads spelled bad business. But weaning off of the platforms has gained a new urgency thanks to Apple’s decision. With it, Meta has learned its own lesson in reliance on outside businesses. And while Apple’s driving motivation is eliminating bad actors who abuse its user data, something else is true at the same time: it no longer serves Apple to prop up Meta and other platforms’ ad businesses. Google is now following Apple and will introduce similar privacy changes for Android. Brands that relied on performance marketing are now at a disadvantage in a way that the Skim’s and Fenty’s of the world are not.

So here we are, two worlds represented within the same category of brands. One is highly dependent on the advertising methods of the last decade or so and the other seems to scoff at them as if they were never necessary. Skims’ Grede told Alexandra Mondalek of BOF:

You cannot advertise your way to success. Advertising is certainly important as a part of it, but sales-driven marketing has never built brands.

Meanwhile, a founder of a venture-funded brand that, itself, is nearing a potential IPO chimed in on the report published by The Information:

What this [The Information] article doesn’t do is analyze the downstream implications for DTC brands and small businesses, which have been catastrophic.

It is unlikely that Apple reverses course on its ATT changes and its diminishing of the IDFA but an entire industry is in need of a middle ground. For many founders and executives, their livelihoods are on the line and it isn’t Facebook that will be remembered as the culprit. Apple must either resolve its decision in favor of the advertisers reliant on sales-driven marketing. Or the company needs to partner with major social media platforms and media companies to offer its own advertising network (fueled by Apple’s first-party data, coincidentally). In either situation, Apple will face pushback for hypocrisy. But the digitally-native brand industry, as it stands, may not survive the privacy changes attributed to Apple. That is unless, a global icon is on the brand’s founding team.

There’s never been a greater disparity between the haves and the have nots for brands growing in the age of Apple’s privacy power moves.

वेब स्मिथ द्वारा | हिलेरी मिल्नेस द्वारा संपादित, एलेक्स रेमी और क्रिस्टीना विलियम्स द्वारा कला