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Which Fashion Brands Boast the Best Digital Strategies?

‘Most fashion brands still approach digital as a series of pet projects rather than presenting a coherent multi-platform strategy.’

This rather critical summary comes from the latest piece of research from the L2 Digital ThinkTank, released last month.

Headed by Professor Scott Galloway of NYU Stern, L2 has been releasing its Digital IQ research since 2009. For the first time, the Digital IQ reports have been broken down by industry, giving Prof Galloway and his team more scope to comment on the performance of each individual sector.

With the invention of Digital IQ, Galloway and his team have attempted to create a universal measure for the digital competence of luxury brands. Each brand is rated on 4 criteria:

Their sites, which account for 35% of their overal Digital IQ Index, including appraisals of their functionality and content and the translation of the brand online.

Their digital marketing (25%), rating their overall performance in disciplines like search, online display advertising and email.

Their social media efforts (25%), scoring their performance on Facebook, Twitter, YouTube and Tumblr.

And their mobile strategy (15%), including mobile sites, apps and other mobile innovations like SMS.

Once scored, brands are then classified as ‘Genius’, ‘Gifted’, ‘Average’, ‘Challenged’ or ‘Feeble’ dependent on their overall rating.

So which are the brands their fashion peers should holding up as digital paragons of virtue?

Unsurprisingly, Burberry lead the pack, praised for their sector leading Facebook page (boasting more than 9m fans), an unconventional site which successfully blends content and ecommerce and their continuing innovation on new platforms such as the photo sharing and filtering app Instagram.

But the number 2 slot went to Kate Spade, proving that a thirst for well thought-through innovation is a remedy for a lack of resource and heritage when successfully translating a luxury fashion brand online. Kate Spade was praised for its customer centric shopping experience, including sharing plug-ins and customer service integration, its integrated and innovative approach to social media, its RoI-driven approach to digital marketing and its desire to experiment with new concepts like F-Commerce.

But this year’s Digital IQ Index also shows how quickly brands can fall from their perch if they fail to keep up with the pace of innovation. Hermes’ rating fell 35% on last year, primarily due to a site which the authors felt dated in terms of functionality and technology. And even Oscar de la Renta, a brand which leads the way in social media innovation, was criticised for scant updates to their ecommerce site and a lack of a mobile presence.

It’s Galloway’s contention that Digital IQ relates directly to profitability and shareholder value, so what can brands do to boost their IQ in the eyes of the L2 team?

In terms of sites, it’s about getting the blend right between content and ecommerce. Despite 67% of EU consumers claiming they research their luxury purchase online before buying, still 1 in 5 luxury fashion brands in the survey aren’t offering ecommerce capability.

With regard to digital marketing, it’s leveraging simple RoI-proven techniques such as search and email to maximise sales. Kate Spade were praised for their practise of automatically emailing all those who abandoned shopping carts with a free shipping offer to entice shoppers back to the site.

For social media, it’s not just about fan building but engagement and integration. For example, despite 57% of affluent consumers reporting that information gathered on social media influences their luxury purchases, only half of the brands in the survey had implemented sharing features on their product pages. The report noted that brands utilizing social sharing enjoyed twice the year on year traffic growth of those that hadn’t.

And finally, for mobile it was moving beyond the legacy iPhone apps created in the past couple of years and creating m-commerce sites and new apps with genuine utility and stickiness. Galloway and his team highlighted the fact that just 18% of the brands in the survey maintained an m-commerce site whilst 40% of affluent consumers accessed the internet daily through a mobile phone.

The overall learnings from the report are that although fashion brands need to innovate to stay ahead of their rivals, many are innovating at what can only be described as the ‘bleeding edge of technology’, putting time, effort and money into projects that will struggle to deliver any sort of commercial return.

The bedrock of any commerically successful digital strategy is getting the basics right and many of the brands in the survey would be served better by getting on with the nitty gritty of RoI-driven digital marketing than moving from one headline grabbing initiative to the next.

For a full copy of L2’s Digital IQ Index, just email ben@creamuk.com and we’ll be delighted to send you a copy.

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By: Graham Painter

Posted in Advertising, Mobile, Online, Search, Social Networking | No Comments »

Who’s Spending What and Where? Latest Media Spend Trends

It’s the conundrum facing all marketers, and it’s one that’s becoming ever more pressing as marketing becomes increasingly results focused – how should I be proportioning my marketing spend to achieve maximum return on investment?

Of course, the answer is different for every product and brand, but one useful input into this process is ‘what is everybody else doing?’ and it’s here that Ofcom’s recently released Communication Report for 2011 can help.

The report, produced annually, examines a wide range of communication trends from media consumption habits to smartphone adoption. It also includes figures from a wide range of sources which analyse advertising spend by media from 2005 to 2010. Here are the key findings:

- Spend on internet advertising, including search, display and classified, has more than trebled proportionally since 2005, from 8% of overall spend to 26% in 2010.

In the first year of the recession, between 2008 and 2009, it was the only spend category which grew in absolute terms, overtaking TV to become the largest single spend category in 2009 – a position it retained (but only just) in 2010.

Throughout the 5 year period, most of the growth has been driven by increased search spend, which has not only grown in absolute terms each year between 2005 and 2010 but has also grown as a proportion of overall online spend – from 56% in 2005 to 61% in 2009.

Expenditure on search advertising grew yet again between 2009 and 2010, by 9%, but for the first time its share of internet ad spending fell – from 61% to 57%. This proportional fall was driven by the phenomenal growth of online display advertising. In 2010, online display ad revenues increased by 33%, driven entirely by the growth in Facebook advertising. Facebook accounted for over 41% of all online display advertising in 2010. Online advertising expenditure across other media actually fell by 3%.

- So which sectors have been losing out as marketers shift their budgets online?

Well, it’s not TV, which has proven to be exceedingly resilient. TV advertising revenues enjoyed their best year last year since 2005, buoyed by the World Cup, and TV still commands 26% of overall spend (compared to 25% in 2005).

The main losers have been newspaper and magazine advertising. The former is down from 30% of overall spend in 2005 to 21% in 2010 and the latter down from 12% to 7% in the same period.

Given the sharp falls in circulations seen by newspapers in particular, these falls in spend are hardly surprising. What is frustrating for the publishing industry is that they haven’t been able to reap the full benefit of the growth in online display advertising as Facebook has stolen their thunder. It’s no wonder that the advent of the tablet computer is seen by many in the industry as a means to claw back not only subscription revenues but ad revenues too.

- So are mobile ad revenues growing as fast as publishers would like them to? Well, they’re growing rapidly, but from a very small base.

Mobile advertising revenues almost doubled in 2010 from £36.7m to £83m but the mobile advertising market ended the year only 2% of the size of the overall internet ad market.

Search based advertising drove most of this growth from a volume perspective, growing by 172% in 2010 and growing its share of overall mobile marketing from 54% to 66%.

Mobile display advertising may be losing share, probably due to the limitations of screen size when viewing advertising on mobile phones in particular, although ads do dominate more page real estate than their PC-viewed competitors. The growth of the tablet market, both through the established market leading iPad and new entrants such as the Kindle Fire may do something to redress the balance.

The other interesting fact about mobile advertising is that its client base is becoming broader. A discipline dominated by the entertainment and media sector, accounting for 66% of spend in 2009, is now much more diversified with sectors such as Finance, Consumer Goods and Automotive seeing significantly increased spends.

In general, Ofcom’s report shows that brands are still probably more wedded to ‘old media’ than perhaps they should be, particularly premium and luxury brands whose affluent consumers are more likely than the mass of the population to be consuming their media online, be it via their PC or mobile device. Progressive brands such as Burberry are reported to be as spending as much as 60% of their on digital – well above the average.

But offline media still has a role to play in delivering impact, tangibility and in being ‘interruptive’ in a way that consumers are accustomed to and comfortable with.

It’s not all about conversion at the bottom end of the purchase funnel – offline media can play a vital and very effective role in driving prospects into the funnel in the first place. The key is to understand your audience, what media they consume and how, understand your product and the best environment in which to showcase it and understand exactly what your competitors are doing. Of course, collecting data on what is driving sales is key – but as you’re likely to be recording only what is happening at the sharp end of the purchase funnel it’s just one of the factors you should be taking into account.

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By: Graham Painter

Posted in Advertising, Magazines, Mobile, Newspapers, Offline Media, Online, Out of Home, Radio, Search, Social Networking, TV | No Comments »

How Organic Search Position Influences Click Thru Rate

It’s been almost been 5 years since AOL leaked their search data and revealed how organic search positions affected click thru rate (CTR), allowing agencies to create the first CTR ‘curves’.

Five years is a long term in search but many companies and agencies are still basing their RoI models on these original figures.

However, new research from marketing software provider Optify aims to bring these curves up to date, allowing marketers to better understand the potential benefits of further investment in natural search to boost their rankings.

Optify’s study,which involved 250 sites and up to 10,000 keywords, once again demonstrated the power of the top of page 1, with 2/3s of clicks being generated by the top 4 positions. The figures also underlined the huge advantage of holding the top spot - which was seen to generate almost three times as many clicks as position 2.

But the research also demonstrated that natural search strategy is not just about getting a few terms into that no.1 slot. For example, it found that the average CTR for positions on page one was 8.9% – almost 6 times more the average CTR for page 2 - which suggests there are considerable benefits to focusing on getting more terms onto page 1, perhaps a more achievable goal for many companies than competing for the top slot.

Optify’s research went further too – looking at organic click thru rates on pages for terms which had high cost per clicks (>$1.50) vs. low CPCs (<$0.25).

The findings here were that for high CPC terms organic search was much less effective. CTR for the no.1 position was just 17%, less than half that recorded as the average across the whole study. The inference here is that for these terms, a much higher proportion of people are clicking on paid search terms and thus the investment in paid search for high CPC terms is more likely to be worthwhile.

The research also compared ’head’ terms (>1000 monthly searches) and long tail terms (<100 monthly searches). Here, head terms delivered a better CTR for position 1 in the rankings, but this fell away dramatically between positions 1 and 2 and thereafter. For long tail terms, CTR for position one was 25%, well ahead of position 2 at 14%, but then CTR fell away only gradually between positions 2-10. This suggest that for high volume terms, greater investment may be worthwhile to achieve position 1, whereas for less popular searches, just achieving a position on page 1 may be enough.

Of course, it’s not possible to draw any hard and fast conclusion from the above in terms of whether a company should invest purely in getting a term onto page 1 or aspire to the top spot, or what combination of paid and organic search investment is going to optimise qualified visitors from search.

But Optify’s research does at least allow search marketers to build some basic, and up to date, RoI models which will help them to make organic search investment decisions, even if the final results can only be judged by actual conversions generated from the investment.

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By: Carla Burgess

Posted in Online, Search | No Comments »

Will ‘+1-ing’ Become More Popular Than ‘Like-ing’?

Google's New +1 Button

Google have clearly not given up the tussle for the ’social web’, having hit back with the recent launch of the ‘+1′ button.

Although initially the button will only be seen by a small percentage of users on Google.com, soon we’ll all be seeing ’+1′ buttons appearing next to Google search results and ads. If, as Google expresses it, we want to flag a search result as ‘pretty cool’, we can ‘+1′ it. That means that when our friends see the site listed in search results, they’ll also see the fact that we’ve ‘+1′ed it, making it more likely they’ll click on the result.

Even if a search doesn’t yield a result that anyone we know has ‘+1′ed, we’ll still see the aggregate of ‘+1’s for all sites listed, which is likely to influence the site that we choose.

The +1 will soon be available to website publishers to integrate into their sites, so no doubt it will soon be as ubiquitous as Facebook’s ‘Like’ button. It will also eventually be rolled out across Google’s portfolio of products, so +1’s may become a feature of banner advertising as well as search.

It’s a smart move by Google which has many advantages over it’s rival, Facbook’s ‘Like’ button.

A Friend's +1 Recommendation

For example, from a user perspective, a ‘+1′ will be ‘lighter’ than a ‘Like’. Many people may be put off ‘Liking’ by the fact it generates a post to their friends newsfeeds (the very reason that publishers and brands love the ‘Like’). A’ +1′ recommendation will be less ‘pushy’ – something that’s found only when your friend/contact is looking for something specific.

It’s also more targeted – appearing when your friend/contact is specifically looking for a product or piece of information on the web. And it makes sense for publishers to integrate ‘+1’s into their sites, as even though Google aren’t integrating ‘+1′ clicks into their algorithm (at least, not until they’ve monitored its usage for a bit) a friend’s recommendation will make a ‘+1′ed link more likely to be clicked.

But Google’s great disadvantage is that it’s social ‘reach’ is not as extensive as that of its rival. Only signed in Google users will be able to ‘+1′ links and sites, and Google will recognise their friends via their connections on Gmail, Buzz and Chat. Although Twitter connections may be integrated in the future, none of these channels has close to the enormous reach of Facebook. Thus, our friends ‘+1s’ are likely to be less present in our web- browsing experience than they our friends’ ‘Like’s.

Clearly Google are hoping that the ability to leave helpful tips for our friends all over the internet will be enough to encourage more of us to create profiles and connect to our friends via their products, but it’s by no means certain that this will be the case.

Many are convinced this isn’t the sum of Google’s social strategy and that there are more announcements to come, so perhaps one of these will give people more compelling reasons to create a Google profile and connect to friends, making the ‘+1′ button more effective.

What is for sure is that Google sees the social web as somewhere worth fighting over, and that fight clearly has some way to run.

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By: Graham Painter

Posted in Online, Search, Social Networking | No Comments »

Online Campaign Measurement Still in the ‘Dark Ages’

Geoff Ramsey of emarketer - Online Measurement in the 'Dark Ages'

The recent I-COM Conference in Lisbon saw 3 prominent figures in the online world agree on one thing – put simply, the measurement of online marketing is too simple.

Online advertising is often the ‘poor relation’ of online marketing tactics due to lower click thru rates and subsequently higher ‘cost per acquisition’ – but that is because most marketers are only measuring clicks to conversion and not analysing how online advertising impacts on offline behaviour (i.e. walking into a shop) or post view behaviour (those who don’t click immediately but do visit the advertisers site on a subsequent visit, perhaps via a branded search).

Geoff Ramsey of eMarketer described the current state of measurement as ‘the dark ages’ and predicted that by 2013 marketers would be able to prove that online advertising can result in offline sales and that they would understand much better online advertising’s impact on consumer intent online.

Magid Abraham, US CEO of ComScore added ‘If one person out of a thousand responds to a campaign, is that the only person the campaign had an impact on? Clearly that doesn’t make sense. We’re not focusing on anything, just the click. It has held advertising back,”

Henry Eccles, Google UK’s Marketing Manager concurred, specifically on the point that online marketing’s impact on offline behaviour was not being measured by companies focused on ‘the last click’. Eccles quoted a study Google had undertaken with L’Oréal Garnier in France which had demonstrated that search was able to ‘supercharge’ the impact of offline activity. He warned ‘Consumers can take over a month to make their purchase. The vast majority of conversions online are happening beyond the cookie window.”

Measurement of campaigns is never easy, particularly when marketers are dealing with diverse ‘bricks and clicks’ businesses with retail outlets and transactional websites. But it is clear that they’re going to need to invest more of their efforts and budgets into more sophisticated measurement solutions if they want to understand exactly the impact their various marketing activities are having on purchasing behaviour.

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By: Carla Burgess

Posted in Advertising, Search | No Comments »

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Which Fashion Brands Boast the Best Digital Strategies?

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How Organic Search Position Influences Click Thru Rate

Will ‘+1-ing’ Become More Popular Than ‘Like-ing’?

Online Campaign Measurement Still in the ‘Dark Ages’

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