Launchmetrics and Publicis Sapient have teamed up to answer some of the biggest marketing questions in the industry: understanding and assessing the impact of media initiatives, as well as quantifying and refining the ROI (return on investment, ndr) that determines the most appropriate strategy for each company. A «natural collaboration» between the data analytics company and the specialist digital consulting firm that has materialized in the publication of the report «The State of Measurement in Fashion, Luxury & Beauty 2022», a study based on consultations with 1,000 industry professionals around the world, with a special focus on the United States and China.
«Our clients need data and analytics. But they don’t necessarily have the skills, the know-how or the mindset to be able to interpret them properly to make decisions. Everyone wants to have data and insights, but when it comes to taking it a step further, it gets complicated,» explains Michael Jais, CEO of Launchmetrics, underlining the challenge of working with «rational yet emotional processes that need creativity and a marketing touch».
A complex communication challenge shared by Olivier Abtan, managing director of Publicis Sapient. Companies not only need to have the tools to collect data, but also the right skills to be able to extract it, interpret it and convert it into elements of interest to guide their strategic decisions, investments in different channels and development of partnerships», argues the expert, pointing out the «hard difficulties» faced by brands when it comes to «finding profiles that are capable of converting data into insights». According to the report, this is the case for up to 50% of the marketing managers consulted. Because it is one thing to have access to information and quite another to reach valuable conclusions and observations.
A question of taking a step back, looking for relevance and defining the why
«For years we have had clients who, regardless of any marketing rules, wanted to work with certain influencers without really questioning what the objective is or whether the audience behind these prescribers corresponds to them,» recalls the CEO of Launchmetrics, arguing that «at the influencer marketing level it is possible to set objectives of notoriety, consideration, conversion or customer loyalty; but the most important thing is to establish the objectives and the message you want to send.» As the report details, the trend in influencer marketing is evolving from the search for visibility and engagement to efficiency in terms of conversion.
As a result, decisions and initiatives need to be more timely than ever. «You have to take a certain distance from events, fashion shows, trends or what the competition is doing,» says Jais. He continues: «This is fundamental, but often very complex for people working within brands. It is necessary to set objectives and evaluate whether the strategies are appropriate and coherent, looking for the greatest possible efficiency and profitability».
The obligation to lay the foundations with clarity and determination involves identifying and defining KPIs (Key Performance Indicators) as fundamental units of measurement that facilitate decision-making based on appropriate data. But for this information to be useful, 70% of data scientists in the industry agree that a unified view of marketing performance should be a top priority for companies.
In search of cross-cutting and key metrics
«It is imperative that companies seek a holistic view across different channels and means of expression. Often, brands work in isolation and autonomously,» reflects Olivier Abtan. «Each one analyzes the data independently, but there is rarely a pooling of data to discuss how it can be reflected in marketing decisions and the orientation of investments. We should put an end to these independent bubbles and unify marketing in order to carry out meaningful analyses,» concludes the specialist, for whom it is necessary to establish «somehow universal measures» that facilitate channel comparison and benchmarking.
Up to one-third of respondents highlighted the obstacles in conducting competitive analysis, and 51% acknowledged that interpreting data is a challenge. «Sometimes this seems very basic, but until very recently it wasn’t such a priority issue for brands,» says Jais, admitting that the situation has become more complicated compared to the early days. «The diversification of social networks, video formats or livestreams has caused the number of touchpoints to multiply by 3, which forces to decline campaigns in multiple formats…without budgets having increased at the same pace,» acknowledges the specialist, concluding that these conditions force to «be sure of what works and what doesn’t.»
For Launchmetrics, having the ability to measure is «what makes the difference». However, the sheer volume of data to deal with is one of the most overwhelming factors for the experts consulted. «For years, many tools and data solutions have competed in the race to propose the maximum possible volume of content,» argues the company’s CEO, pointing out that today there are 58 million semi-professional accounts creating content on Instagram and 2 million real professionals. Among them, the lifestyle world accounts for about a third.
«These numbers keep growing, which makes the analysis more and more complicated. It is normal to feel overwhelmed by this volume, so it is imperative that there is a prioritization of what is really listened to according to the objectives to be achieved. Getting lost in the observation of signals in all directions is a frequent experience that does not help, but rather the opposite. It is easy to find contradictory signals on the same subject and it is disturbing,» he explains, stressing that the first step for brands should be to «diagnose their state of visibility» and to identify the perception of their audience and their real competition. «There is nothing worse than starting from a false perception at the beginning,» he sighs. For Olivier Abtan, it is essential to «clearly agree on the indicators to follow and to have adapted professional tools rather than carrying out the processes in an artisanal way».
Fashion and luxury companies, data companies
«Everyone says that companies in the sector will have to be data companies. In a way, it’s true,» says the managing director of Publicis Sapient on the indispensability of data, differentiating «data-driven» companies into two groups: BtoC companies focused on understanding and segmenting their customers, and those with less direct sales information, interested in monitoring their marketing budgets.
For Michael Jais, the categories are similar. «There are data-driven companies dedicated to customer data, focused on shopping and recommendations, such as Amazon. But luxury brands do not operate under this same logic, the most important thing is the data associated with their own value,» he says, stressing that «between 60% and 80% of the value of a luxury brand is the brand itself,» since the difference between products is «relatively small.» «Luxury brands must be data companies in everything related to the brand and experiences,» he concludes, insisting that partnerships or audience insights are indispensable assets.
The impact of rising acquisition costs
«With the development of the internet and social networks, it was believed that acquisition costs would gradually fall, so that barriers would be lowered in the luxury universe and small brands would be able to break through with forms of expression and marketing at reduced prices,» recalls Olivier Abtan. However, the belief never materialized.
«That only happened at the beginning, and very quickly the big brands invested massively, driving up costs and raising the entry price for marketing. Now it’s expensive to express yourself, work with influencers or get a certain reach. This reflects the need to control this data, it is essential to know the ROI. Given the high level of investment, you can’t afford to fail,» says the specialist.
In addition to an increase in investment in customer acquisition, which does not necessarily lead to an increase in impact, the European data protection regulation also imposes different ways of playing the game. «The GDPR entails additional constraints, but mainly on the processing of personal data and not so much on the processing of trends, where there is a lot of accessible information,» acknowledges Michael Jais.
Nevertheless, the question is beginning to be placed on the Chinese market. «Until now, there were not too many barriers as long as the data remained in the country, but the trend is for regulatory restrictions to progressively limit things,» he says. All the more reason to place it among the marketing industry’s future challenges. «The main challenges will be to understand what’s happening in China and to try to decline it in Europe and to figure out what needs to be done to collaborate better, beyond just thinking in terms of audiences,» he concludes.
What about ROI in the new universes?
The streaming platform Twitch or the instant messaging service Discord focus the attention of the most recent analyses. «We are looking at performance and extraction. But the big question mark revolves around the communities behind it. Discord is primarily geared toward ‘geeks’ and ‘gamers.’ It’s great to do experiences on it, but the luxury customers are not there. Only mainstream brands may have interesting actions to do,» comments Jais, pointing to a «big disconnect between luxury brand customers and these audiences who are in another world whose adaptation is going to take a lot longer than technology or data.»
So, should we wait or take the leap sooner rather than later? Once again, the answer depends on the size of the company and its specific objectives. Faced with the rise of initiatives around the metaverse and NFTs, the CEO of Launchmetrics is somewhat reticent: «Again, it’s very interesting that projects are being launched, but they don’t have the potential luxury audiences behind them and it’s going to take a long time for interested consumers to become part of these communities.
For his part, Olivier Abtan notes that «brands are trying to launch themselves to experiment and understand, but they are not directly looking to make economic results». And he shares with Michael Jais the impression that «the maturity of this sector is going to take a long time.» «Luxury brands are lucky enough to be able to afford the time, but, for smaller brands, I think they can experiment, but their first priority should be to launch on Web3. There are a lot of things to do first.»
«I think there’s a kind of pervasive FOMO and a sense that you might be missing out on something. And at the same time, it’s a limitless creative universe so brands and designers love it,» interprets Michael Jais on the acceleration of initiatives in this sector, which in a way, prevents from seeing clearly the «problem of the absence of consumers.» «It’s like a fashion show without spectators. The question is when will interesting communities arrive in these spaces,» he concludes.