NEW YORK, United States — Over the last week, household name brands like Levi’s and Patagonia have pledged to boycott Facebook and Instagram by withholding paid advertising.
It’s relatively easy for those brands to walk away from social media — they’ve had decades to pitch themselves to customers, and in many cases Instagram was a small share of their overall marketing strategies. The rush of goodwill these corporations receive from announcing the boycott may outweigh any sales lost due to running fewer ads.
Joining the boycott is a trickier decision for smaller, independent labels that rely on social media to find the vast majority of their customers. Take Laurus, an Italian leather goods brand. It took the #StopHateforProfit pledge, meaning it will stop running paid ads on Facebook and Instagram for the month of July (it will still engage in influencer marketing on those platforms). In doing so, Laurus is cutting off the source of 90 percent of traffic to its online store.
“This comes down to applying pressure for Facebook to take a stand,” said Hannah Teitelbaum, the brand’s chief marketing officer. “This is a really important movement, and obviously we're a small brand and our spend maybe won't leave a dent [on Facebook] at all. But showing that we're making that sacrifice is important.”
This is a really important movement, and obviously we're a small brand and our spend maybe won't leave a dent.
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 have become less effective are regaining some of their lost appeal, Facebook among them.
But the call to boycott Facebook Inc., led by six organisations including the NAACP and the Anti-Defamation League, has added another wrinkle to how smaller brands have yet again pivoted their marketing spend in the last several months. 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,” said Melanie Travis, chief executive for direct-to-consumer swimwear brand Andie. Andie has not signed on to the Facebook boycott pledge. “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 and the protests, 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.
In Laurus’s case, the brand is diverting its July marketing spend on Facebook and Instagram to influencer marketing (which Teitelbaum admits still benefits Facebook, though less directly than through paid advertisements) and traditional media placements.
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.”
This presents a good opportunity to work with major influencers who may have been previously unavailable.
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.
It's kind of like a game of chicken.
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.
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.