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Rising materials, transportation, and labor costs are not the only ones. Retailers are also increasing the cost of digital advertising. The challenge is to tear up – is extra money worth it?

Over the past year – and especially during the holiday season – social media platforms such as Facebook have been very effective in unintentionally scrolling home-grown users on their smartphones. But this year, in the middle ApplePrivacy changes and Ongoing Controversy Above FacebookThere are more and more Facebook applications, including Instagram and WhatsApp. Or they are turning to new ones like TikTok.

They fear that the shift may not reach the right customers. Some people get angry at some social networking sites that they may alienate consumers.

“Covene hit everyone in a different way but created a very strong tail wind for many brands,” said Brian Berger, founder and CEO of direct-to-consumer men’s clothing brand Mac Weldon. “For this nine-month period [in 2020], We are all back to the glorious age where we can truly be exploited … We are in the right place at the right time.

I can’t say how important it is for brands to have this direct one-on-one relationship with their customers by interacting with their customers and marketing on their own websites.

John Mary

CEO of Solo Brands

He said that when the outbreak occurred last March, there were flights by major advertisers outside of channels such as Facebook. Companies, including hotels and airlines, are trying to save money at an uncertain time or hope to avoid misrepresenting their ads during a health crisis. Companies that continue to market their products have been able to register a large amount of advertising real estate online for very little money. But that trend abruptly stopped earlier this year.

“Then 2021 will start and vaccines will start to spread, people will be more comfortable and life will start to be normal again,” Berger said. “And in 2019, we went back in one day. Rates are back. The race is back.”

Apple privacy changes

The final blast came in April. Makes privacy changes Apps affect how users track users. Many consumers have opted out of tracking apps, which means businesses are gathering less information about users’ daily experiences and needs. As a result, it will It is very difficult for advertisers to target people on the Internet. Effectively.

Pushmark, An online marketplace for secondary goods, said on Wednesday that it should improve its marketing strategy due to Apple’s privacy policy. The company says it is directing dollars to TV commercials and influencers to gain new customers. Shares are down nearly 29 percent% On Thursday, with a daily low of $ 16.08, the outlook for the holiday season fell short of analysts’ expectations.

“Apple’s new changes and operating system … overnight shook the entire digital marketing space, including Facebook,” said John Merris, the company’s chief executive. Unique brands, In an interview. “I can’t imagine how important it is for brands to have a direct one-on-one relationship with their customers by interacting with their customers and shopping on their own websites.”

Mary says many retailers are worried about how the changes will make it harder for them to tailor ads.

“It seems that the place of advertising technology or digital marketing is changing every day,” said Mary, who owns outdoor-inspired products such as Solo Stove, Chubis and Oru Kayak. “And you are hearing a lot of very serious consumer trademarks or you are facing big challenges to get new customers online as a result of those changes.”

Facebook usage is about to drop.

Meta, In the past, Facebook is undergoing an extensive investigation into former product manager Francis Hawgen. He published many internal documents. The documents provide an overview of how Facebook handles hate speech and how it affects a user’s mental health. At least one retailer was directed to reconsider its presence on a social media platform.

Sporting goods company Patagonia, which is known for its bold stance on social issues, announced on Twitter on October 28 that it had continued to like Facebook after pulling out all the ads it paid for last June.

“This decision has had an impact on our business and the environment [nonprofit organizations] What we support – the campaigns benefit from the social media highlight we understand and implement, says Patagonia. But we have learned to adapt. We are smart about how to grow our community because of this ban on advertising.

He did not elaborate on how the company did not adapt. Representatives of Facebook and Patagonia did not immediately respond to a request for comment.

Patagonia Shop is one of the largest stores in the world for telemarketry, Colorado.

Robert Alexander | Save photos | Getty Images

Poly Wong, president of Full Service Marketing Strategy, said the problem with Facebook has become more of a headache for consumers than for traditional retailers. Because instead of relying on stores, many began to thank customers for their creative Facebook ads.

“There is no question that most of it is DTC [direct-to-consumer] Brands build their business on Facebook Google Second, ”said Wong.“ But now more than half of our customers are seeing low Facebook performance.

Bellardi Wong’s customers include an environmentally friendly shoe brand All birds, Bed linen maker parachute, men’s clothing company Buck Mason and dozens of other businesses that sell directly to consumers.

According to MarketCatalyst, users in the US are expected to spend more time browsing Facebook this year and next. For adults over the age of 18, spending time at the forum is expected to decrease by 3.3 percent compared to 2020, according to eMarketer. He predicts another 1.8% reduction from 2021 to 2022 and another 0.7% reduction in 2023.

“When people return to their normal lives … by going to restaurants and gyms and moving in and out, screen time is reduced. And less screen time, in fact, means less perceptions,” Wong said. “And when there are a lot of insights, but there is still a lot of marketing demand, it increases the value of those insights. There is more competition for advertisers for the same insights.”

CPMs, a marketing term used to refer to the value of 1,000 ad impressions, are on the rise, Wong said. During the summer, Belardi Wong said she was tracking a 50% increase in CPM on Facebook. And the company expects CPMs to increase by another 50% this holiday season.

More retailers are experimenting with live message catalogs, podcasts, and large-scale television campaigns to increase their marketing mix, Wong said. Brands are also trying to use the support of celebrities. And these could be the most expensive options in this area, she said.

Activewear brand Vuori is looking for stores as a shopping channel. After receiving a $ 400 million investment, it plans to open about 100 in the United States over the next five years. SoftBankVenture Capital Fund. Brands like Allbirds and Eyeglass Maker Warby Parker They are the same. Conspiracy to increase their store growth.

“When you first start [a brand]According to Joe Kudla, founder and CEO of Pori, it can be cheap to find a customer through social media or paid search. Shop. “

Shipping Products ‘Ready to Ship’

However, opting out of digital advertising may be transient. Snap That is the point. The social media company told analysts at the end of October that it had some retailers. Pulling back on transactions on Snapchat Because they have to spend less time or they don’t have enough to sell.

“We’ve heard from advertisers in a variety of industries and geographies that their business is experiencing disruptions in the global supply chain as well as staff shortages and rising costs,” said Jeremy Gorman, CEO of Snap. “We expect some of these customers to choose to reduce their transaction costs.”

Chocolate manufacturer Hershey And consumer-products giant Kimberly-Clark Both cited supply chain issues in the third quarter as two examples. Companies are experiencing high commodity costs, and sometimes they do not have enough products to meet their needs.

Other retailers are adjusting the messaging in their ads to reflect their placement. According to Berger, Mac Wellden’s message is “ready to ship” to the market ahead of the holiday to remind consumers that the goods are readily available and in stock.

“We have an international supply chain and we are not free of issues,” said Burger. “We had a lot of things to do with the holiday season. But we already had a lot of them and we were able to implement fall plans for different marketing campaigns based on the delays.”

According to Wong, many companies fall into one of two camps. Or the retailer has enough products to sell, but it may be sold before Black Friday, so it encourages consumers to buy early. Or, the retailer is waiting for the item to arrive, so the business is still stopping the transaction flashes.

“We really have a few customers, unfortunately, we weren’t able to pull the trigger quickly,” Wong said. “For some of our customers, there are catalogs that go home. Half of the products are not even in the catalog.”