Karel Schindler, CEO of ROI Hunter delves into the tips and tricks of using product data to help marketers take control of the often invisible world of mesauring the effectiveness of dynamic ads.
The power of the brand is waning. Consumers are shunning traditional means of advertising and are taking inspiration from influencers for purchasing ideas.
Social commerce, where social platforms are used to sell products, is rapidly growing, with global social commerce sales reaching $492bn in 2021, and projections show this figure nearly tripling by 2025, to reach $1.2tn.
The driver behind this growth? The new generation of digital natives – 97% of Generation Z consumers are using social media as their top source of inspiration. As organic website traffic suffers, marketers must take steps to adapt their marketing strategies accordingly, or risk being left behind.
Social selling challenges
Marketers are allocating precious budget to social media advertising as a result of this growing trend. The tools that marketers are likely to leverage are dynamic ads, which sync social ads with product catalogues to automate the process and ensure that the right people are served with the right products. While invaluable, retailers lack the visibility and control over dynamic campaigns that’s needed to achieve their true potential, as AI-powered algorithms work as a black box.
Research by ROI Hunter found that, on average, 46% of all ads implemented are not providing the needed results among retail digital marketers. This may be due to a number of reasons.
First, the social algorithms are best at matching audiences, rather than matching products. Second, certain proprietary business data (margin, chance of return, stock levels) is not available to social networks, making it more difficult to ensure the right products are promoted for a specific retailer. Finally, these networks are working with the sales data each retailer has on that network; they don’t have the benefit of using their competitors’ data as well (for instance, Facebook cannot use the popularity of a given product on Google to spot the trends).
To compound the issue, marketers are being pulled in too many directions, with the average professional needing to manage an average of 18 campaigns a month on social media. To balance these challenges, retailers can work with the social network algorithms, enhancing their results by adding additional product-level data to the equation.
One simple and logical way to put control back in the hands of marketers is by incorporating product data into digital marketing strategies. Using technology like product performance management (PPM) platforms, marketers can gain insight into individual product performance across a range of metrics and from numerous sources, including Google Analytics, Google Shopping and Facebook.
Not only do marketers gain clarity across social channels via this method, but by using a PPM to create a layer of product data for each department to connect to, the data silos holding collaboration back can be eliminated. Marketers can gain better visibility of which products are frequently being returned, or of which products need to be prioritised to keep them from ending up as deadstock. Product sets can be optimised for specific goals, such as higher profits or the promotion of new arrivals, greatly improving performance. At the same time, other departments can gain visibility into the aggregated amount of adspend behind every single SKU to decide if the product should be discounted, or simply needs a greater marketing push.
While Google’s Smart Shopping replacement, Performance Max, provides marketers with the opportunity to create campaigns for specific goals to improve conversions, limited visibility into product performance can hold marketers back from making informed decisions on what these goals should be. With all their cross-channel product data organised in a PPM, marketers can understand their catalogue on an individual product level, and focus budget on the best products for what they want to achieve.
Enhancing social efforts
Social networks provide incredible value for retailers, and retailers can push this value further by enhancing their strategies with the product data these networks don’t have access to. Traditional forms of customer loyalty are falling by the wayside, and social media is dictating the purchasing habits of the new generation.
By adding their own product-level performance and business data, marketers help Google and Meta push their campaigns to a new level, and gain more control over what they’re promoting. They can gain an understanding of the best products to focus their budget on for each campaign and focus there, rather than continuing to spend huge chunks of advertising budget on unprofitable or consistently returned products.
Through this, retailers can achieve a much-improved return on investment.
CEO, ROI Hunter