The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
Retailers use a secret weapon to give voice to their campaigns: social media-savvy consumers.
A few months before the start of the last holiday season executives from Doris Hosiery Mills, which manufactures Duane Reade's hosiery line, approached the New York-based drugstore chain about increasing consumer awareness of the line.
Calvin Peters, public relations and digital communications manager at Duane Reade, agreed that the retailer should try to help shoppers discover what he calls the "best kept" fashion secret available at the pharmacy's stores. The resulting campaign, called "Show Us Some Leg," included in-store displays and robust online ad and social media efforts, complete with a Twitter party in which more 100 women talked about holiday fashion trends (including when and where to wear Duane Reade leg wear).
But Duane Reade also took the campaign a step further by working with marketing firm Collective Bias to find and reach out to about two dozen fashion bloggers with large followings in the New York area where the Walgreen Co.-owned chain operates 253 stores. Collective Bias paid the bloggers an undisclosed amount (typical rates range from a few hundred to a few thousand dollars, say experts) to go to a Duane Reade store, buy Duane Reade-branded hosiery, wear it and write about when and where they wore the leg wear.
The campaign helped sales of Duane Reade hosiery rise 28% during the six weeks the Show Us Some Leg campaign ran. While it is impossible to single out the bloggers' influence compared with the other initiatives, Peters believes that the bloggers played a large role in sparking conversations about the brand.
Using a listening platform, which combs social media and the web for mentions of brands and products, the retailer compared how many times Duane Reade was mentioned when consumers discussed hosiery or leg wear online in the six weeks prior to the blogger campaign to the period during the campaign. It found the number of hosiery-related Duane Reade mentions increased 89% compared to the previous period. Even more importantly, by the end of the campaign Duane Reade was the most-mentioned brand when consumers discussed hosiery or leg wear.
Like Duane Reade, a growing number of retailers are looking outside of their own marketing departments to find messengers to share word of their products. Social influencers help marketers break through the online messaging morass because consumers trust their peers, colleagues and even influential bloggers to give them good information, says Zach Reiss-Davis, a Forrester Research Inc. analyst. Moreover, that type of campaign is cheap—especially in the context of a typical retailer's advertising budget, he says. It can be as cheap as the cost of a retailer or manufacturer sending samples to consumers. Or even if they—or an agency like Collective Bias, that works with bloggers—pay the bloggers a fee, those fees are minimal, typically a few thousand dollars a month per blogger, he says.
That explains why a number of vendors aimed at connecting influencers with brands have sprung up in the past few years. Marketers are focused on influencers because word of mouth is the most-cited way consumers discover products, according to a recent Forrester Research survey. 80% of survey respondents say they discover products via word of mouth, outpacing search engines (79%), TV ads (71%), physical displays or ads (51%), mail ads (51%) and other web browsing (41%).
By working with bloggers, brands are looking to have their message stand out. "It's different than us buying ads or running our own promotions on social media," says Peters, who oversaw the Duane Reade project. "It's more likely to be trusted." That's even though the bloggers are required by federal law to disclose that they are being paid to write about products.
Retailers are missing out if they're not connecting with influential consumers with large, devoted followings on their blogs, Twitter, Facebook or elsewhere in the social universe, says Reiss-Davis. "The people brands want to target as influential are already talking," he says. For instance, a mommy blogger already writes in her blog about the strollers, car seats and other baby accouterments she uses. But she may not be talking about a particular brand. "If you send her a stroller and ask her to write about it, you're bending a conversation in your direction," he says.
In the United Kingdom, plenty of those types of online conversations of late have focused on baking. U.K.-based retailer Tesco Plc took note of these conversations last year and imported the idea for a line of ready-to-bake cookies, cakes and bread products from the United States, where ready-to-bake lines have been successful. Tesco sought to target the products to consumers who are unable to find the time to mix together and bake their own goods, says Paul Duszynski, the retailer's dairy customer manager.
There was just one problem. "While it's a familiar concept in the United States, there wasn't anything else like [these products] in the U.K.," Duszynski says. That meant the retailer's marketing campaign would have to explain the concept of buying a pack of refrigerated dough that the consumer just has to cut and bake.
Rather than embark on that mission by itself the retailer turned to bloggers and other consumers who are active on social media to spread word about the products and brands online and offline.
Tesco worked with BzzAgent Inc., the social media marketing arm of marketing firm Dunnhumby Ltd. BzzAgent helps companies drive word-of-mouth buzz via its pool of BzzAgents—consumers who sign up to try new products, often for free in exchange for talking about those products with their friends in person and via Facebook, Twitter and other social media.