Month: July 2022

“We uncovered an unmet need in [the] home insurance space,” said Simon Fleming-Wood, CMO of Hippo, adding that the goal of the campaign is to boost brand awareness. While the company has previously advertised, this campaign is the first to focus on defining the brand to consumers, which execs hope will help customers distinguish the brand from other well-known companies, like Allstate and Liberty Mutual. “Even with total housing inventory rates rising, we are still at historical lows, which means many home buyers could be settling for a fixer upper rather than a new home with a warranty,” said Gordon Smith, senior partner and co-leader of the financial services practices at Prophet, a growth strategy consulting firm. “So increasing home coverage is top of mind for many home buyers today.”

It is unclear how much of its advertising budget is allocated to this campaign or how it was spent; Fleming-Wood would not share overall budget specifics for this campaign or the overall ad spend from 2021 to the present day. The company spent $100,000 in 2021 on marketing efforts, according to Kantar’s most recently available data. The ads went live on social media video platforms such as YouTube and Twitter as well as connected TV.

Hippo partnered with an independent agency to do several months of research and strategic planning to gain a deep understanding of their customers, including new and current homeowners. “This is a campaign crafted to bring the emotional benefits of Hippo life,” Fleming-Wood noted.

There is no doubt that emotions play a critical role in any marketing campaign since they play an important role in perception and in decision-making processes. Hippo’s campaign is video-heavy to highlight the emotional story. “With this project, we were able to tap into a deep human truth,” stated Fleming-Wood upon identifying the gap between homeownership as a dream and homeownership as a reality.

Hippo isn’t alone in taking that approach. Other brands as of recent such as Opticians brand Specsavers, and hike and lifestyle brand Merrell also used emotion to reach their target audience.

According to a survey conducted by Hippo, 87% of homeowners tend to experience anxiety and dread about home maintenance and worry about what could possibly go wrong. Recently, there has been significant uncertainty for homeowners due to a housing bubble and a shortage of supply coupled with interest rates increasing on a daily basis.

“Running ads based on a problem you know people have and showing how you can help them solve it is just about the best kind of marketing you can do. Solve people’s pain points and you can win over bigger competitors,” said Duane Brown, founder of performance marketing agency Take Some Risk.

Uncertainty ahead

The economy is torn between chaos, confusion and control due to a volatile mix of post-pandemic global inflation, rising interest rates, tightening fiscal policies across the largest economies, and the impact of Russia’s war in Ukraine on commodity prices. Not to mention the fact that consumer confidence is currently at an all-time low. It pays to be a rational optimist for marketers these days. After all, this downturn will eventually recover. Then again, it’s hard to be optimistic when there’s no end in sight. At best, there’s a recession next year. At worst, this may be the beginning of a depression. For now, all marketers can do is make educated bets.

This sounds familiar.

Sure, there are parallels to how the pandemic short circuited economies worldwide two years ago, but this downturn is more complicated. Now, stuff costs a lot more, of course, yet people keep buying. CEOs warn of a recession, when nearly every measure, from employment to GDP shows a booming economy. The markets are awash in contradictions right now. Still, marketers are nothing if not adept at wringing opportunities from every crisis — something agency execs are reminded of now. Everything is getting squeezed, including margins. Nothing new there. The squeeze was there long before covid arrived — last year notwithstanding. It’s just tighter now, according to agency execs.

“Clients are still spending but when it comes to paying more for media or additional services there are a lot of excuses being made,” said one senior agency executive on condition of anonymity because they were not authorized to speak to Digiday. “It feels the current macroeconomic situation is being used by marketers to avoid paying more for talent or negotiating new deals on the back of inflated fees.”

Bad news for agencies

Or any other business that makes most of its money from ads for that matter. These companies weren’t growing quickly when media dollars were being spent more freely; their business models battered by challenger brands, the advent of zero-based budgeting among advertisers, disintermediation by the platforms and higher raw material input costs to name a few.

Slow advertising has cascading consequences on all these issues for agencies and ad tech vendors. Namely, that they’re left in a chokehold by a lack of access to financial support, quality media and talent. It’s left many of these businesses picking between turning a profit or providing services that marketers want. For many of these businesses, damage limitation is the priority. The usual tense conversations with marketers are even tenser now.

“When I talk to agencies the cost inflation of their overheards sits somewhere between 30 to 40%,” said a media management consultant on condition of anonymity over concerns of jeopardizing current deals. “That’s not a sustainable way to run a business. Someone has to pay for that inflation. Marketers are adamant it won’t be them. They feel they have enough inflation to contend with elsewhere.”

Like the inflation on TV?

Very much so. And it’s keeping marketers up at night. They worry that they’re being forced to pay more to fewer people in those moments thanks to the onset of streaming services. That’s as much of a measurement challenge as it is an audience one. Think about it: the cost of linear TV is rising because people are watching more on demand while the cost of on demand impressions is relatively static because most advertisers are buying them at set prices. In other words, the more advertisers spend on reaching a broadcaster’s addressable audience, the more expensive it becomes to reach their linear counterparts.

So, media dollars are being cut?

Yes they are being cut, but only so they can be put to work harder elsewhere. If anything, spending is stable. But the longer this downturn continues, the more unstable spending will get as markers try and react. In fact, it’s already dawned on many marketers that they’re paying more for less when it comes to media. Inflation really is everywhere. In times like this, marketers tend to zero in on finding ways to continue to advertise without having to increase their spending. Choices that tend to be predicated on the marketer’s appetite for risk: do they put more dollars into performance media where it’s easier to show a more direct correlation between the investment and the result or do they lock in prices upfront with so much uncertainty ahead?

And that’s just the tip of the iceberg.

The path for marketers through a downturn used to be fairly straightforward: cut inefficient advertising to help maintain squeezed margins. But straightforward doesn’t mean easy, risk-free or cheap. Not least because vendors and media owners are nowhere near as charitable as they were during the last downturn. Don’t expect vendors or media owners to accept cancellations or deferred payments without a cost this time around.

“A big talking point among platforms and media owners at Cannes was how they manage the expectations of marketers per the inventory they have already locked down and whether they’re going to let them out of those deals,” said John Piccone, regional president for ad tech vendor Adform in the Americas. “In a world where flexibility is critical, certain line items on media plans are going to disappear quickly.” 

Who would want to be a senior marketer right now?

They’re trying to maintain both the reach and profile of their brands, but inflation and potentially reduced spend will make this tricky. Pressure like this can play on marketers’ insecurities. The danger is that marketers seek to offset those higher costs by pouring money into poor quality online media chasing lower CPMs that are, at best, inefficient and unproductive and, at worst, lost to fraud. Marketers will need to hold their nerve and ensure that they maximize the impact of spend — and that may just mean taking fewer but more meaningful big swings. If this happens it will be the advertising equivalent of a flight to quality — when investors trade high-risk high-return assets for lower-risk lower-return assets at times of economic uncertainty.

“Supply paths are going as direct as possible and logs are getting increasingly verified,” said Tom Triscari, an economist at consulting firm Lemonade Projects. “It’s a flight to quality. Very few companies have the wings to get there with customers. Many can spin a good story. It always depends on what marketers believe to be true.”

It’s a strategy companies like global advertising network Dentsu, General Motors (GM) and McDonalds have implemented, centering an element of senior bonuses around meeting DE&I targets. 

For the full story first reported on and published by Digiday sibling WorkLife, click here.

Most of House of Highlights’ revenue driven by its creator content comes from brand deals on Instagram, TikTok and YouTube. Brands pay to sponsor House of Highlights’ content, as well as for custom segments, product placement, brand integrations and callouts. Revenue also comes from creator-led branded content separate from HoH’s own franchises, such as with advertisers like Xbox, Exxon and Corona.

While House of Highlights has worked with creators for years – such as with groups like Supreme Dreams, Through The Wire and BroadcastBoys – a lot of House of Highlights’ recent efforts have been focused on live appointment-viewing events in order to build a fandom of young sports fans around creator-led franchises. Live content brings in the “biggest results [i.e. viewership] in terms of creators’ ability to drive and move audiences,” Muller said.

Advertisers back live, creator-led competitions

House of Highlights hosts three “Showdown” livestream competitions a year, where creators go head-to-head in sports challenges often timed around key sports events. Pizza Hut is a seven-figure sponsor for three Showdowns, including two competitions in 2021 and an upcoming dodgeball competition that will be shot live from RDC World’s DreamCon Fan Festival in Texas on July 15, Muller said. Netflix sponsored a “Creator League” live basketball challenge tournament on YouTube to promote the premiere of the movie “Hustle.”

Other recent advertisers include PlayStation, which sponsored the HoH Showdown Knockout Live event and HoH Creator League live event during NBA-Allstar Weekend, and Corona, which has sponsored HoH’s episodic series “Highlight House,” where each season is focused on creators from a specific sport or group. Season four of “Highlight House” will premiere this fall.

House of Highlights’ sales team secures advertisers for creator content and pays creators a fee for their participation in the competition events, a spokesperson said. They declined to share the range of those fee payments.

Audiences are increasingly tuning in

HoH has “steadily increased” the size of its deals with advertisers on creator-led content as its audience grows, the spokesperson said, though they declined to share their average deal size. As influencer marketing budgets grow, “brands are looking to break out of the traditional media mold,” Danielle Wiley, CEO of influencer marketing agency Sway Group, said in an email. 

“Younger audiences get pretty much all of their news and information from social media… so it’s vital that brands shift dollars to influencer marketing in order to reach them where they are,” she added.

House of Highlights’ creator content “out-performs” its other content, Muller said. HoH Creator League content on TikTok has on average about 10% more video views than other forms of content posted to the social platform, for example.

From April 2021 to April 2022, House of Highlights has grown its total aggregated followers across platforms by 43%, from 35 million to over 50 million followers. In May, House of Highlights had over 530 million views on YouTube and 408 million views on TikTok, according to Tubular Labs data. While House of Highlights’ focus was historically on Instagram, the vertical created a YouTube channel in February 2020 specifically for content featuring creators. It has 175,000 subscribers. Over 84% of the channel’s audience is under the age of 34, Muller said.

“Influencer content has an authenticity and realness that is difficult for publishers to recreate on their own,” Wiley said. House of Highlights “is very real sports content in the wild – sports fans like it because it is user-generated (not talking heads from sports, leagues, etc.) which makes it incredibly appealing.”

A June report from global market insights firm National Research Group highlighted that connection between fan and influencer. The study found 44% of respondents felt they know their favorite creators as well as they know their real-world friends, and 53% said that they’ve purchased at least one product or service that was recommended to them by a content creator they follow. 

Bleacher Report is tapping in

The success of House of Highlights’ work with creators and advertisers is starting to influence Bleacher Report’s content strategy as well, especially around live video and creator content in the Bleacher Report app, said Doug Bernstein, gm of House of Highlights. An in-app live stream around the NBA Draft last month was hosted by the Through The Wire group, which House of Highlights has been incubating for several years. Bernstein said the stream had about 30,000 concurrent viewers.

“There’s a recognition on the Bleacher Report side that creator content is not only here to stay, but it is the place of growth. There is active strategy work to [figure out] how to not just replicate what House of Highlights is doing, but how do we create an incremental audience and revenue opportunities on the Bleacher Report side,” Bernstein said.

As media businesses start to feel the squeeze of an impending recession, more companies might turn to working with creators. BuzzFeed is growing its creators program, even as other parts of the company are getting slimmed down. And while creators can bring in additional audiences and branded content revenue to publishers – they can also be more cost-efficient than hiring full-time staff or working with professional talent. 

“The type of content we can make with creators can be a lot more cost-efficient than the type of content that traditional talent or traditional athletes typically lend themselves to,” Muller said. “It’s less from the perspective of ‘this creator will cost less than working with this athlete,’ but in working with a content creator, you’re essentially getting a content producer, an on-air talent – you’re getting distribution. So it’s getting all these things in one and the audience that they speak to desires more lo-fi, raw, authentic, organic content than other audiences.”

A handful of companies, including Gucci, Levi’s and E.l.f., preemptively changed their health-care and travel expenses guidelines in May when a leaked memo from Supreme Court justices previewed their decision on the Dobbs v. Jackson Women’s Health Organization case. But on June 24, the floodgates opened.

Following the Supreme Court’s ruling to formally overturn Roe v. Wade, Ulta Beauty was one of the largest U.S. beauty companies to announce on social media and via PR that, “We are committed to providing equitable access to quality health-care options and to ensuring those enrolled in our medical plan can access covered health care. Effective Friday, June 24, this support was extended to include travel expense assistance for eligible reproductive health services where access to care is restricted.” Ulta Beauty has more than 40,000 associates. Fellow beauty conglomerates Estée Lauder Companies, L’Oréal and LVMH made similar statements soon after, as did multiple smaller brands.

But the question as to whom these policies apply, and whether they include store and distribution associates and unionized employees, remains. Furthermore, none of the policies from the above companies provide clarity on how an employee will be able to opt in to these benefits. The idea of an employee simply telling an HR representative that they need an abortion, as though it were a regular vacation or T&E request, seems farfetched. Ulta Beauty, L’Oréal and LVMH, the parent company of Sephora, Fenty Beauty, Benefit Cosmetics and Guerlain declined to provide further detail on their policies. ELC, Coty and Walmart did not respond to requests for comment.

For these larger organizations, health-care coverage and abortion-related travel-and-expense reimbursement likely extend to those enrolled in a company’s health-care plan.  For instance, Unilever’s coverage applies to all U.S. employees, spouses, domestic partners and dependents enrolled in its medical benefit plan, according to industry sources. Unilever, parent company to Dove and Tatcha, was one of many firms that joined the Don’t Ban Equality coalition, announced in May, pledging to provide employees with comprehensive reproductive health-care benefits and cover travel costs if care is no longer available in their home states. Sources familiar with Unilever’s U.S. operation estimate that more than 40% of its employees live in states that ban or restrict abortion access. Unilever declined to provide further information on its abortion-related policies.

It is somewhat understandable that companies are starting with benefit-enrolled employees first. But nearly 40 million women of childbearing age live in abortion-hostile states, according to the Guttmacher Institute. Only in 20 states and the District of Columbia is abortion legal and likely to stay protected. That staggering number is well beyond the smattering who work for companies that offer this type of coverage and, secondly, choose to be enrolled in company health care plans, posing a great risk to the female workforce.

LVMH has not publicly shared the extent of its abortion-related policies, but Sephora said that more than 80% of its U.S. workforce is female-identifying. “We shared with our employees that we would be proactively changing our benefits policy to ensure equitable and safe access to the same high-quality and critical health care, regardless of where they live. For Sephora U.S. employees who live in a state that has or decides to restrict access to reproductive health care, Sephora will support travel costs to a state where they can safely receive care,” said a spokesperson.

Since 2020, it’s become commonplace for brands to publicly share their cultural viewpoints on debated topics, in an effort to align themselves on what they and their consumers believe is the right side of conversations. According to Pew Research Center data from June, 61% of U.S. adults say abortion should be legal in all or most cases.

But one beauty brand founder who declined to be named and lives and runs a company in a state with a trigger ban said they have chosen not to speak out publicly, even though the company is offering to provide abortion-related health-care coverage and T&E to all employees. The same is true of another beauty brand CEO who runs a business in a state where abortion is still legal. Part of the reason, they explained, was because they fear being criminalized by publicly taking a stance or providing too much detail about their health-care policies. Legislators in Texas, for instance, are going to great lengths to punish businesses for providing abortion access.

“The situation is legally complex and constantly evolving; exactly how we do this and in what circumstances is still being developed,” said Robert Rigby-Hall, chief people officer at Orveon Global. Orveon Global is the company that owns Bare Minerals, Buxom and Laura Mercier, following Shiseido’s sale to private equity firm Advent International in 2021. “We may take a slightly broader approach and offer travel expenses for treatments that cannot be legally obtained near the employee’s home or in their home state but can be legally obtained in another state.” As it stands, Orveon Global’s reproductive health policy is for benefit-enrolled employees at the corporate, retail and field level.

Businesses that don’t have the pockets of an LMVH, Ulta Beauty or Unilever certainly run legal risk if they share statements on social media channels or their websites. But at the same time, smaller- to medium-sized businesses are often disruptors, especially in beauty.

Over at Versed, president Melanie Bender said that it took a broader approach to provide employees with access. Versed ensures all employees, part-time as well as those not enrolled in the brand’s health-care policy, will be eligible for travel expenses for services not available in their home state. That includes health care and abortion, as well as gender-affirming care.

Shai Eisenman, founder and CEO of Gen-Z-focused Bubble Skincare, has extended a travel expense reimbursement for reproductive treatments and mental health hospitalization up to $5,000 for its approximately 25 employees. Though Eisenman’s team is largely based in New York, three employees are based in Arkansas and Kentucky. Eisenman is also hiring. Bubble Skincare is not yet two years old.

Beyond sharing values and ensuring current employees feel heard, Eisenman suspects that the overturning of Roe v. Wade will have serious implications on women in the workplace and companies’ abilities to attract and keep talent. “Retaining talent in 2022 is extremely hard, and this will make it even harder,” she said. “The connection to employers has never been weaker, and if employers won’t be supporting the rights of employees through these challenges, employee turnover will become even worse.”

She’s right. Since the Covid-19 pandemic began stateside, shaking up the workplace status quo, companies have had to entice employees to stay put. Not to mention, the job market remains strong even with sky-high inflation and recession worries. Some companies that will likely feel the brunt of limited abortion access quickly are Walmart, based in Bentonville, Arkansas, and Cincinnati, Ohio-based Proctor & Gamble, home to beauty brands Olay and SK-II. Both companies have made major inroads to appeal to female millennial and Gen-Z consumers. As the beauty industry is built off the backs of women and services them, the topic of supporting abortion rights hits especially close to home.

James Park, president of Herbivore, agreed. “With the labor market the way it is, everyone has a choice and freedom to resign or go to another job. It was really important to make a statement for Herbivore and — even though it is not really clear about who, what, where, when and how [abortion-rights policies] can implicate a company or individuals — it is worth the risk,” he said.

Seattle-based Herbivore has approximately 40 employees, three-quarters of whom are women. More than 10% live in states where abortion is outlawed or restricted. Herbivore is providing travel and accommodation expenses for all benefit-enrolled employees. In addition, it has made resources and virtual care available, being mindful of data privacy, said Park, who noted the company is looking at broader coverage policies. 

“You have to put a line in the sand, take action and stand up for the rights of women. This might take months to figure out or it might take 10 years, but we can’t wait that long to protect our people,” said Park.

“It will be interesting to see how employees and candidates respond. Some people may choose either to not relocate to some states or to move away from those states,” said Rigby-Hall. “Others may not want to work for companies based on the perceived political stance companies take. We believe we will still be able to attract and retain talent by staying true to our values.”

Reading List

Inside our coverage

Inflation raises demand for affordable beauty dupes.

Sephora expands simple skin-care proposition.

YouTube relies on beauty to bolster shoppable livestream and short video features.

Vintner’s Daughter plots next chapter with new products

What happens to influencer marketing in a recession?

Stories I’m reading 

TikTok gives up on live shopping in the U.S. and Europe.

Why do other countries have better sunscreen?

Dior’s beauty and fashion arms merge for a Gurney’s Montauk takeover.