Month: May 2019

How were you told about the acquisition?
We knew for a while we needed some money and more resources so we could pitch bigger clients. But when it was announced, through an all-staff meeting, that it was a consultancy buying us, we were kind of shocked. None of us knew it was even on the table. One of the things that brought us to the agency was that it was an independent agency. [With the] consulting firm, everyone was unhappy. The consulting people came to talk to us, and a couple of them ended up being in the office almost daily, which is when people got kind of apprehensive. I know people make fun of this, but it’s true about the suits. They were all in khakis or slacks or suits. I mean, they could have tried a bit. 

So why do you think they bought your agency?
The consultancies are trying to own the C-suite. The CEO, CTO, CIO. And when it comes to the CMO, they didn’t have a credible offering there. I do think that building their internal agencies got them somewhat far. But it is true that it is very hard to get creative people to work at a consultancy brand. The work is just bad and often boring. The thing is the only metric a lot of them have is how big they are. But largest is a little “who cares” in the agency world. So the only way is to buy us. 

What happened during the course of the few months post-acquisition?
It’s fascinating to see how little the consultancy knows the agency business. They think all the same people do the same thing. So basically, right at the beginning, anytime the word “creative” came up, it was that we should do it. Whereas in the agency world, holding companies know an agency’s place in the world. They understand a direct-response agency vs. loyalty vs. shopper agency. They’re not trying to turn a big brand agency into a CRM agency. They’re not trying to make an agency something they’re not. That’s where things start to fall apart.

How did people react?
At our agency, what got people excited was working on big emotional work that changes people’s perception of brands. But a consultancy’s primary metric is revenue growth. The issue is it’s completely at odds. I remember in the early days it was such a disconnect, people wanted to work on the things in the world people will point to and say, “That was brilliant.” But all the work we got in the early days was bottom funnel. We were doing banner ads. In a world where we used in charge of our own destiny, we’d say, “We are unfortunately not the best partner for you.” But we were no longer in charge of our own destiny. But in the world of consultancies, where every dollar is equal, we weren’t able to turn away business. At one point, we did brochures.

Did people leave?
We had 60% attrition in the first six months. It’s a problem inside creative agencies where you’re only as good as your last big hit. If nobody is going to see what I do, does it exist? Also, consultancies have very different contracts, where everything is confidential. Nobody has this concept of credit.

Did you get more money?
I was supposed to get some more. We got our base as the same, but all the comp was in bonus. I was making $80,000 at the agency with maybe a $10,000 bonus. Once they bought us, I was supposed to be making $100,000, but then with another $50,000 as a bonus. But then raises got delayed six months. And the trade-off was getting sucked into the consultancy machine. But I also got great health care. I got a new laptop. I got a new cellphone. We got great new fancy human resources.

What happened to the raise?
We had no work to do. We were wasting time on pitches we weren’t going to win. And because we weren’t doing work, they kept delaying the raises too. I had no way of showing them what I was doing to deserve a raise. I went to my boss. My boss’s boss. Nobody could help. I don’t know what to do. But also, having a consultancy on my resume isn’t some huge get either.

The post ‘At one point, we did brochures’: Confessions of an agency-turned-consultancy creative appeared first on Digiday.

In the first three months of 2019, online sales jumped 40% year over year, which Rorsted has attributed largely to Instagram. “There was no doubt that Instagram had a positive impact for our online business in the first quarter,” the CEO told analysts on the brand’s earnings call on March 3. “Product launches and Instagram’s checkout tool were the two most important things for our online sales business in the first quarter.”

There were other reasons why Adidas’ online sales were higher than the 24% growth recorded in the last three months of 2018. A big contributor was the release of a string of exclusive product launches it knew would sell well on Instagram. Products from the brand’s Futurecraft range, for example, have sold particularly well on Instagram, said Rorsted. But Adidas won’t always have that breadth and depth of product to launch each quarter, which is why Rorsted said it will take a while to see the true impact platforms like Instagram have on its direct-to-consumer business.

“Our growth online is very dependent on which product launches we have within a given quarter,” he said. “What we’re focused on is ensuring we have the consistency of launches. There will be varying growth rates quarter by quarter depending on which launches have the volumes we have behind them.”

Unlike previous sales tools Adidas has tested on Instagram, the checkout feature means fans aren’t taken to a pop-up version of the brand’s site to complete the sale. Having the sale happen directly from inside the app is meant to inspire people to shop more and make them less likely to abandon products now they don’t have to leave one app for a separate site. As intuitive as the process is, it’s another potential hit for advertisers that are trying to regain ownership of their customer experience and data. While the likes of Adidas still get the purchase data from Instagram conversions, important behavioral data leading up to the sale will now remain within the walled garden.

“Yes, there are other ways for the brand to access behavioral data, and, yes, a lot of platforms don’t offer this depth of data back,” said Lawrence Dodds, communications and planning director at UM London. “But there are few other platforms that give brands access to the same target audience in quite the way that Instagram does; ultimately brands will have to judge whether the sacrifice is worth it.”

Adidas is having greater success selling more products across its online business. Online sales grew double digits across all its regions, said Rorsted, who singled out the role of its app, which has been downloaded 9 million times across 27 countries, as a contributor.

“One of the most important metrics we’ve seen an increase in is on mobile conversions,” added Rorsted. “We’ve worked diligently on making certain that with the shift from stationary engagement to mobile devices, that we’ve been able to dramatically increase the conversion rate on the mobile device because that was where the conversions were lower in the past.”

The post ‘It’s having a positive impact’: Instagram is driving Adidas’ online sales appeared first on Digiday.

The growing denim brand has ramped up its in-store signage promoting its website over the past few years as its site assortment has increased, according to a rep. Walmart encourages in-store customers to visit its website to place an order for grocery pickup, and then come back to the store to retrieve the order. Digitally native Everlane has iPads displayed in its stores so customers can more easily see the brand’s full collection online.

Gap’s family of brands offer a variety of omnichannel services — Gap, Athleta, and Banana Republic offer reserve online, try-in-store, while Old Navy piloted buy online, pick up in-store last year, before rolling it out nationwide.

For retailers, the benefit of highlighting different value propositions for both their websites and their stores — their websites have a wider selection of inventory, but their stores afford customers to try on anything they’re uncertain about before buying — is that they can better train their customers to visit both.

Gap and Walmart, for example, found that customers who shop both in-store or online buy more than customers who just shop one channel. For retailers who use their stores to tout a wider selection of inventory available online, it can also allow them to keep less stock lying around.

When Old Navy started piloting buy online, pick up in-store, it didn’t just highlight the value of that particular service to the company, but rather the value of the multichannel customer. During the testing phase, 20% of customers who picked up an order they bought online in-store made additional purchases once they were in the store. So promoting online services in-store can offer a similar benefit: Perhaps an Old Navy customer will go to a store to buy some new T-shirts, but then may visit the website to pick up a pair of jeans later if they see a sign advertising a wider variety of denim washes online.

“The definition of shopping continues to change,” Old Navy parent Gap Inc. CEO Art Peck said during an earnings call last year. “[The customer] wants to do more than just walk in, pick a product, and exit. She wants to find something online and pick it up in a store, be checked out in the fitting room, will place an online order in a store. It’s important to continue to emphasize that we are delivering a suite of capabilities for her to shop and engage our brands today the way that she wants.”

At Walmart, the company found that customers who shop both online and in-store spend twice as much in total, and spend more in stores, the company’s CEO, Doug McMillon, told investors during the company’s most recent earnings call.

“[Retailers] have moved away from getting indiscriminate traffic to their website,” said Jason Goldberg, chief commerce officer for Publicis.

Now, he says retailers are more interested in using in-store signage or training their associates to promote specific omnichannel features to customers when they’re checking out. That way, e-commerce and physical retail teams aren’t just trying to cannibalize the other’s sales.

It also gives retailers another way to highlight shareholders that their physical stores still have value.

“We view [the Old Navy website] as an integral part of the overall brand experience, including the store experience,” Blair Dunn, svp and gm of Old Navy’s online division said in an email. “It’s important that our digital experience keep pace with our store experience, and vice-versa.”

Bill Duffy, an associate director at Gartner L2, notes that promoting what services they offer in stores is particularly crucial to retailers as they continue to offer a greater variety of delivery and pickup options.

“The big challenge is that retail is really scattered in terms of what [services] retailers are offering, and what customers even know they offer,” Duffy said. “Some retailers have same-day fulfillment, while some retailers still don’t even allow customers to return online purchases in-store.  So we think communication is key both online as well as in-store.”

The post Why retailers are using their stores to promote their websites appeared first on Digiday.

Craig Rowley, Groupon’s new CMO, is tasked with making sure marketers and consumers alike are aware of the change. He joined the company in March from REI, where he served as the vp of marketing.

“We’re moving away from the vouchers of the past,” said Rowley. “We’re building a true global marketplace with new partners and a broader selection than we’ve ever had of local services and experiences.”

With over 47 million active customers globally and 30 million of those in the U.S., Groupon’s current brand customers include Sam’s Club, Costco and Pandora. Other brands, like AMC Theaters and TripAdvisor, are partnering with Groupon for experiential offerings. The idea is to bring big national brands to the platform alongside the local Main Street mom-and-pop stores that remain a part of the company’s platform.

“We’re building more and more strategic partnerships with top national brands,” said Rowley. “We’re trying to make it almost an open platform so that brands can tap into this great huge customer base we have and create ongoing partnerships that are mutually beneficial.”

To do that, the company is working to enhance the customer experience on the platform and become a true e-commerce marketplace for brands. Instead of just daily deals, Groupon is now offering more of what it calls its “voucherless” inventory — meaning it’s directly selling goods and services — which has grown 20% quarter over quarter, according to a representative.

“First and foremost is our progress on improving the customer experience, specifically our efforts to make Groupon voucherless,” wrote CEO Rich Williams in a first-quarter letter to investors. “As I mentioned last quarter, you’re going to see us taking much bolder steps here over the course of 2019.”

Those “voucherless” initiatives include ticket purchases and the ability to book appointments directly with brands via its platform. To keep those consumers coming back to the platform — Groupon’s app has more than 200 million downloads, per the company’s numbers — the company is also looking to build out and retool Groupon Plus (Rowley said that it will likely be rebranded), which offers cash back rewards to users who repeatedly use the platform to purchase from certain merchants.

Moving away from its deal-centric past to become a daily utility app that allows brands to make deeper connections with consumers, allowing them to buy whatever they want whenever they want it with a deal and rewards incentive via the Groupon app.

The shift makes sense to brand consultant and co-founder of Metaforce Allen Adamson. “It’s generic to give away discounts; it’s not differentiated anymore,” said Adamson. “[Groupon] is trying to reinvent itself, and that’s a smart move. They have to move beyond just coupons, but the business they are getting into is brutally competitive.”

A media agency source said the pivot is early and that the agency hasn’t heard much about Groupon’s plans yet but that it’s unclear if they would be filling a need in the space.

Regardless of whether or not the shift will be a hit with brands, it’s clear that Groupon needed to make a change to its model. Last July, sources told Recode that the independent deals maker was looking for a buyer as consumers shied away from the daily deals model.

To that end, Rowley wants to adjust the way the brand invests its media dollars. In 2018, Groupon spent $43.8 million in media, down from $64.5 million in 2017, according to Kantar Media.

One untapped market is social, where Rowley says Groupon hasn’t been as aggressive as it should be. Groupon will also invest more in YouTube and cinema advertising as well as experiential offerings.

“We’re moving beyond just straight vouchers and moving beyond just being a deals platform,” said Rowley. “A lot of the marketing and the idea behind how the brand is going to be served up, it’s going to shift to incorporate more of those things and really play out the idea that we are a true local marketplace.”

The post ‘Moving away from the vouchers’: Daily deals site Groupon wants to become a marketplace appeared first on Digiday.