Prices are falling on marketing channels ranging from billboards to Facebook ads, creating new opportunities for brands looking to get a bigger bang for their advertising buck. ~ Business of Fashion
In Soho, the streets are empty, save for the occasional health-care worker or jogger hustling past luxury storefronts that were boarded up in the early days of the pandemic.
But up in the sky, it’s as if Covid-19 never happened. Calvin Klein recently switched out a 4,000 square-foot billboard of Justin Bieber in his underwear to actor and model Hunter Schaffer in hers. Within a few blocks, two billboards feature Prada’s P.R.A.D.A. campaign, and another hypes Bottega Veneta’s Spring 2020 collection.
Meanwhile, a Gucci mural featuring a toothy, lipstick-encircled grin is clearly designed to entice the tourists and influencers who in another reality would have been dining on pasta and posting photos to Instagram at fashion hotspot Sant Ambroeus across the street. It’s a safe bet that these ads — which can cost up to $20,000 a month under normal circumstances, according to media buying firm Dash Two, and are often arranged months in advance — aren’t generating the sort of returns they did before the pandemic.
Before Covid-19, hundreds of thousands of people might have viewed a billboard in lower Manhattan in a single week, as the Lamar Advertising Company, which manages more than 300,000 billboards in the US and Canada, reports on its website. Brands like Andie, a swimwear startup that plastered New York with billboards and subway ads last summer, are moving on.
Instead, the direct-to-consumer maker is leaning heavily into social channels like Facebook, Instagram, and Pinterest, as well as sending SMS messages to their shoppers, said chief executive Melanie Travis. We just take everything one day at a time. Covid-19 reshaped marketing overnight, and brands are still figuring out how to advertise their products in the new, post-pandemic world. Once-effective techniques, billboards among them, are at least temporarily obsolete. Marketing channels that had become less effective are regaining some of their lost appeal.
The industry is having to solve this problem in real-time, and with sharply reduced budgets. “In all my years of marketing for consumer brands, I’ve never done marketing where we’ve thrown out all of our fully-baked plans,” Travis said, noting that her marketing team has adjusted its spend in tandem with shifts in consumer sentiment. “We just take everything one day at a time…and I’ve never done that before in my entire career but that’s really what this time kind of requires: a lot of flexibility and a lot of creative thinking on your feet.” Online Advertising Is Back Even before the pandemic, many brands were cutting their marketing budgets, particularly on crowded digital channels like Instagram.
These companies were seeing diminishing returns from social media, as users’ feeds became crowded with lookalike ads for swimwear and shoes. When the pandemic hit, and apparel sales plunged, digital advertising budgets were often in the first round of cuts. That created an opportunity for brands that could still afford to advertise. Rates for ads on Google search results, Facebook and Instagram have fallen by 25 to 35 percent, according to data from brand performance firm Within.
And consumers are spending more time online while they’re self-isolating in their homes. Some brands are seeing a much higher return on investment as a result, said Aaron Edwards, chief executive of digital marketing firm The Charles Group. On an April 29 earnings call, Facebook said it saw increased use on all of its platforms, with use of its namesake platform up 11 percent from last year.
The total number of ad impressions served across Facebook entities increased 39 percent, while the average price per ad decreased 16 percent, driven by engagement in Facebook feeds, Facebook and Instagram Stories, as well as video and messaging on the social media networks, the company said. “We are always channel-agnostic in that we’ll move budget to the most efficient areas real-time,” Within Founder and Chief Executive Joe Yakuel said. “As [Facebook prices] dropped, it made that platform more lucrative and we were able to drive cheaper acquisitions compared to Google for some brands.” There is more fluctuation in individual influencer rates than normal. A similar dynamic is at play with fashion influencers. Retailers like Macy’s and T.J.
Maxx have cut their affiliate programmes, and even influencers with large followings are struggling to line up sponsors. Some have lowered their rates, creating new opportunities for brands, said Mae Karwowski, founder and chief executive of influencer marketing and analytics platform Obviously. “For brands, this presents a good opportunity to work with major influencers who may have been previously unavailable,” Karwowski said. “There is more fluctuation in individual influencer rates than normal.” Google, Facebook and Instagram remain the top choices for most online advertisers. But other channels are getting a second look. TikTok, the app of the moment birthing new influencers overnight, is a place brands like Andie are testing content.
Others, like M.M. LaFleur said they aren’t interested in devoting resources to TikTok, as most of their customers don’t use the app. Sleeper, which makes loungewear and pyjama sets, devotes most of its marketing budget on Facebook and Google. But it’s also begun allocating five percent of its spend to Pinterest, a social network that has been slow to gain traction with fashion brands. Founders Asya Varetsa and Kate Zubarieva said conversion rates are on par with their Facebook and Google conversions.
On May 19, Pinterest launched a section on its platform where fashion tastemakers like Elaine Welteroth and Refinery29 curate products that users can shop. At launch, the brand did not announce any partnerships with brands or retailers. Andie’s Travis said Pinterest “sends record numbers of people over to our site,” but relatively few end up buying swimsuits. “If you take the long view over a few months for a customer, then Pinterest is a cost-effective channel,” Travis said. “But if you’re looking for that immediate cost per conversion, then, then I would say it’s an expensive channel.” ‘Prestige’ Channels Are Within Reach Advertising on national television is typically so expensive that only the biggest companies — fast food, pharmaceuticals and large retailers — can afford a 30-second spot. Naadam is none of those things.
But rather than bothering with Snapchat or TikTok, the direct-to-consumer cashmere brand is angling to place its ads on prestige television shows on networks CBS, ABC, or even Bravo, said chief executive Matt Scanlan. It’s kind of like a game of chicken. He hopes shrinking marketing budgets at big corporations will force networks to lower their rates enough to allow a small brand like Naadam onto the air, adding that commercial video would be “very meaningful from a marketing perspective.” He acknowledges it could be a long wait. “Media sellers are not discounted yet, and they don’t have a reason to discount and so for them, they should hold out on their pricing as long as they possibly can,” he said. “It’s kind of like a game of chicken.”
In the meantime, the brand has reallocated marketing dollars once earmarked for billboards and other outdoor ads to streaming services like Hulu and YouTube. Sticking With What Works Is Advisable, Too Among the most common refrains from brands about successful strategies during the pandemic: Owned channels like email marketing are both the most cost-effective and best for community-building. M.M. LaFleur, for example, has moved away from subway ads, pop-up shops, and podcast advertising — upper-level marketing channels that take longer to show results — to focus instead on the brand’s blog and newsletter.
Growing to over a million readers, the brand said it has helped strengthen its customers’ sense of community. Andie, meanwhile, has seen outsized success with text marketing in the last few weeks. “In the past, pre-Covid, we would get maybe, I don’t know, 20 or 30 replies to an SMS,” Travis said. “Now, we’re getting hundreds and hundreds [of responses], so the messaging is clearly resonating with people who are engaging with us.” Ultimately, the question of whether to pursue a new or newly affordable marketing platform comes down to whether it makes sense for a brand, said Yakuel. “If your customer is not on the platform, you’re better off re-investing in a channel where you’re already getting proven results,” he said.