Month: May 2023

Marketers, agencies and publishers/platforms are still in the early stages of testing live shopping features, but they believe it has the potential to shape commerce media and video content — especially for younger consumers.

The idea is similar to QVC shopping channels, but across social media platforms and oftentimes are hosted by content creators. In recent years, giants from Meta to Amazon have experimented with live shopping features.

In 2022, 20% of people in the U.S. participated in a livestream shopping event — which ranked second after Denmark, with 24% of participants, according to Statista. More than a third in the U.S. have heard of a live shopping experience but have not participated. And apparel and fashion were the most popular products in live commerce followed by beauty and food products, per McKinsey Digital research.

Publicis is among the agencies testing these commerce functions in the U.S. with clients, said Allysun Lundy, vp head of retail media strategy at Publicis Commerce. Publicis did not mention which clients are involved.

“Consumers are going to log in and watch [a livestream], versus going to… spend a lot of time on Amazon or Walmart and not have it feel so sales-y that it really drives that conversion,” Lundy said.

Different shopping cultures and emerging markets

While live livestream shopping, or live shopping, is still growing in the U.S. — reaching $20 billion in 2022 — China has seen more growth. In 2022, China’s livestream e-commerce market totaled some $497 billion, according to Coresight Research. The commerce growth appears to be steady in other regions of Asia, as well.

“I think China has more of where they’ve got people that follow influencers, and they are going to watch their video no matter how long it is,” Lundy said.

WARC and Google’s retail report in March found that livestream commerce accounted for 32% of digital purchase incidences across channels in the past six months. Social commerce accounted for 38% of these purchase incidences. The research considered livestream commerce, augmented and virtual reality and social commerce to be emerging and scaling commerce, whereas online marketplaces and retailer websites are traditional e-commerce.

Live shopping seems to be more mature in Asia, where it originated, compared to the U.S., said Ashik Ashokan, advisory lead of APAC at WARC. In Asia, the culture combines “shopping and entertainment” whereas live shopping in the U.S. seems more “structured and straightforward,” Ashokan told Digiday.

“In Asian platforms like Taobao, millions of dollars are traded on a daily basis across categories,” Ashokan said. “However, in the USA, this trend is still on an upward trajectory and is more focused on high-end products and not mainstream yet.”

The U.S. has the opportunity to make a distinction in niche markets, such as sports trading cards, in which fans enjoy watching livestreams of people opening their cards, said Ryne Higgins, senior director of digital strategy at digital agency Eyeful Media.

“For some, the thrill is having others watch you open your cards,” Higgins said. “With smaller makers that have built a community, offering limited or exclusive lines through live shopping allows creators to build a deeper connection with their audience.”

Higgins agreed that live shopping is still relatively “untapped,” but has potential to also let retailers recreate in-store experiences. It could be a luxury or fashion brand with locations in big cities, but instead of phone support or live chat — the retailer could use social media or a customer platform like Immerss for live calls to walk shoppers through products.

The next generation of consumers

As more consumers turn to influencer product recommendations and social content, live shopping may particularly appeal to Gen Z and millennial shoppers. As Cristina Lawrence, evp of consumer and content experience at Razorfish, explained, Gen Z consumers are especially drawn to immersive experiences, from payments to shopping.

“Gen Z consumers are really pushing a behavioral shift in digital, from how they tend to their relationships, to how they shop, decide to buy, and make mobile payments,” Lawrence said. “To them, digital is their reality. They seek out engaging, mixed-reality experiences that help them connect with the brands and communities that they care about.”

In the U.S., those 18 to 34 years old had the highest live commerce usage in 2022, according to Statista. Some 10% reported using the shopping channel regularly, while those 55 and up said they never shopped live and had no interest in it. Asked their favorite products for live shopping, the most popular category was clothing for male and female U.S. consumers.

At IPG’s UM Worldwide, Amie Owen, U.S. head of commerce, previously mentioned more clients have become more interested in live shopping in the last year. In particular, because more consumers are now on social media, this is retail media and shoppable ultimately “coming together” in one place and will shape the future of commerce media, Owen added.

Lundy at Publicis also mentioned clients want to show tech or beauty products, because those require more explaining and make for good tutorial content. And bringing in a celebrity or creator doing livestreams with those products can generate more excitement.

Higgins agreed that certain elements will determine whether live shopping can take off in upcoming years. “It has to be limited or exclusive [products], and create an experience that is known and appreciated but could otherwise not be re-created,” Higgins added. “It has to be a hobby where people tune in for the experience or show.”

Future of social and video commerce

As agencies and brands continue experimenting in this space, some contend that live shopping could appeal to small and medium businesses and give brands more digital presence. Ashokan at WARC believes that smaller businesses can gain wider exposure with their products in real-time.

“And similarly, consumers are exposed to good value deals with instant interaction directly with brands,” Ashokan said. “As high speed internet and digital adoption continues to pick up globally, it is very likely that live shopping will become a mainstream phenomenon globally.”

Tom Harvey-Jones, senior data analyst of U.K. at influencer agency Billion Dollar Boy, said social commerce is also rising as major retailers turn to content creators — and short-form videos are still driving engagement.

“Trend lifespans will become shorter and shorter, as appetite for short-form content increases once again on TikTok, Reels, and YouTube Shorts,” Harvey-Jones added.

But scaling livestream commerce will come with some challenges, from logistics to social media fatigue. Ashokan said more competition will come as more brands and social platforms grow their shopping features.

“Issues related to logistics, customer service, loyalty, and payment solutions also need to be considered. While we are on a good growth trajectory, brands need to adopt appropriate solutions behind the scenes of live shopping to deliver delightful experiences from discovery to purchase,” Ashokan said.

Additionally, shoppers could tune out social media influencers or question their authenticity over time. This can affect engagement if there is nothing “to keep the audience engaged and returning for future live shows,” Higgins said.

But as Lundy noted, live shopping may also evolve to replace trips to the physical store as people window shop and watch entertaining content on products. This can contribute to increasing usage of video commerce overall, even if consumers are not buying those products on the spot during the stream.

“Like if you go on to Nordstrom and there’s now a product detail page. There’s a picture of a sales associate interacting with the item and showing it — and I think that’s a new way for a person to kind of have this store experience in a video or or it could be live stream fashion that saves them from going to the store,” Lundy said.

For years, marketers were laser-focused on their paid media strategies for social media platforms like Facebook and Instagram. What started as a playbook from direct-to-consumer brands looking to quickly acquire new customers and continue to scale became a standard practice for major marketers. 

Of course, the paid media landscape has dramatically changed in recent years with the rise of TikTok, two years of Apple’s ATT and other various privacy shifts. Those changes are coupled with a difficult economy that has marketers looking to cut costs where they can. It’s no surprise then that marketers have expanded their aperture to focus not only on paid media but also to revamp their organic strategies, according to agency execs, who say that marketers are asking more questions about organic now. 

“Facebook and Instagram were dominant, but TikTok reignited the fire of organic content,” said Brendan Gahan, chief social officer and partner at Mekanism. “They reinvigorated interest in organic content. Organic reach was/is fairly limited on Facebook and Instagram. Now with TikTok (and the knock-on effect of other platforms running to adopt similar formats) organic reach has become increasingly important again.”

Marketers who were once enamored with the potential for a super personalized paid media strategy are the same ones now enamored with the power of organic social and brands exploding on TikTok, according to marketers and agency execs. At the same time, those execs are being told to spend less on paid media now as they deal with budget cuts due to the economy. 

“Over the last year, I’ve had several CMOs say to me, ‘I feel like our marketing strategy is our media strategy and I know that’s not right,’” said Amy Worley, VMLY&R’s global chief connections officer. “[They’re asking] how they can have a marketing strategy that’s bigger than their media plan. They’re thinking about paid, earned, shared, owned and all the places we could be. Organic social is part of that.”

Worley continued, “Marketers are being challenged to do more with less. They realize then that they’re too reliant on paid media.”

The renewed focus on organic has some brands going back to basics and asking agencies to help them suss out what their social personas should be now. Some agency execs say that the ask for help with social personas has been part of recent pitches. 

“I wouldn’t say it’s a lot of pitches but it’s certainly more than before,” said Mona Gonzalez, Pereira & O’Dell’s chief growth officer. “Mostly because they need a strong organic content strategy because paid is getting less effective. I haven’t heard any new or existing clients say ‘social persona’ but it’s just another way to say social brand guidelines.”

Grant Ogburn, U.S. chief growth officer of UM, said he has also seen asks for social persona help from marketers. “How we view it is like a fictional representation of a brand’s target audience,” said Ogburn. “Some of the best examples are the fast-food brands on social: humorous, witty, on the pulse of what’s happening in culture. They work because they exude the brand’s values while infusing humor to attack the competition. Personas must remain consistent to maximize impact.”

While social personas aren’t a new concept — agencies have been crafting them for brands since social media began, often with playbooks on how to do so — marketers’ renewed focus on them comes as some brands seek to zero in on niche communities to stand out on social. 

“For a while I think things were getting very, very stale,” said Gahan. “Facebook and Instagram were dominant and the overwhelming emphasis was on paid media which is so much more straightforward. Persona and humanity across social wasn’t as front and center.”

Now that’s changed — and marketers have to adapt. 

3 Questions with Caroline Gregory, global brand director of Axe body spray

To promote a new product earlier this year, Axe launched a ratio campaign to get in front of Gen Z. What does it mean to be ratioed and why does Gen Z care?

Ratio is a term for owning the conversation. If you post something and my comment on your post gets more likes than your original post, then I ratioed you. It was really bringing this fantastic data that we had, because we did a blind study, where we tested these new fragrances against really high end, luxury, big fragrances, Chanel, Polo Sport and Versace Pour Homme. Seventy-three percent of guys preferred their favorite Axe fragrance over these fine fragrances. Therefore, we wanted to bring that to life in a really fun way, which is where ratio came in.

How has gaming been a sustainable part of Axe’s marketing strategy?

As opposed to being brand-led, we’re audience-led and therefore, we’ll always be in the passion point areas of where guys are, in which gaming is one of them. We’re quite flexible with that because we have a very deep social listening program. We’re always looking into where the conversation is and where Axe has an authentic role to fuel the conversation is where we’ll go in.

What new strategies or media channels has Axe tested? How has that worked out?

[With a recent campaign,] it’s the first time we’ve used 3D out-of-home on Axe. The Times Square billboard was the first time that we’ve used that before. We have also used on TikTok the branded effect, which has been phenomenal thus far. The numbers [of impressions] go up every moment. We always have a mix of both organic and then paid on top [TikTok strategy]. — Kimeko McCoy

By the numbers

Streaming has continued to creep up year-over-year, both in terms of ad spend and viewership. With streaming on the uptick, advertisers have struggled through growing pains, especially when it comes to data fragmentation within connected television. That said, a new report from analytics company App Science takes a look at who is watching what, giving advertisers insights into audience viewing habits. See below for details:

• African American audiences are most inclined to have a subscription to Starz and are 39% more likely to stream on this app vs. general market.
• Middle Eastern audiences are 2.4 times more likely to have parenting apps and 81% more likely to have beauty apps than the general market.
• White audiences are 49% more likely to download Chimani, an app with national park travel guides, than the general market. — Kimeko McCoy

Quote of the week

“Even in difficult economies, most people still shop.”

— Andy Jassy, Amazon’s CEO, during the company’s earnings call, which may help explain why ad spending isn’t reflecting the current economy

What we’ve covered

• Commerce media grows more dominant by the year, forcing media agencies to keep pace
• NFL CMO Tim Ellis on why content creators are leading the league’s Gen Z-focused strategy
• Two years into Apple’s ATT, ad-tech still sees growth despite slowdowns

Yikes, he’s aliiiive! What a shocker for this episode to open on a close-up of Logan’s giant, pock-marked face.

Democrats want to gain more political control over the Justices.

‘We simply have no more shelters,’ Mayor Lori Lightfoot tells Texas Gov. Abbott, in the wake of more migrant busing arrivals.

Power has blinded the union boss to the gifts she’s given the cause of school choice.

Biden envisions a restoration of the era’s strongly regulated national economies.

At Philo, we’ve observed an intriguing trend: It’s not unusual for a quarter of our daily subscription activations to come from customers who have subscribed to our service before. This phenomenon challenges the traditional notion of churn, as it’s not remotely a permanent loss of customers. While average churn rates may be higher in today’s…