NEW YORK, United States — LNDBRG, a contemporary brand that specialises in elevated staples, took out an advertisement in the August issue of Vogue. It might be the last one for a while.
“When things change — and I’m hopeful they will — I will [seek] out more expensive marketing tactics,” said Darla Lindberg, the brand’s founder. “For now, I’m not interested.”
The decision is one echoed by fashion executives across the industry, those who were forced to make deep budget cuts after the coronavirus pandemic threw the global economy into a tailspin.
Often, marketing was first on the chopping block. As soon as lockdowns descended in March, many brands halted all spending on advertising that wasn’t directly aimed at driving sales. Spending on channels geared toward brand awareness — print ads and television commercials — often failed to make the cut. In major cities, even the biggest brands baulked at the expense of taking over a subway car or spending upward of $50,000 a month on billboards in now-empty shopping districts.
“What we have stopped basically is investing into marketing when it was totally useless,” LVMH Chief Financial Officer Jean-Jacques Guiony said on an earnings call in late July. “Nobody was outside for a number of weeks. So what’s the point in advertising outdoor at this point in time?”
The owner of Louis Vuitton, Dior and other luxury labels said at the time that it had reduced marketing and selling expenses by 18 percent during the pandemic. In the first half of 2020, apparel and cosmetics companies cut advertising spending by 25 percent from a year earlier, to $1.8 billion, according to Kantar.
Many brands have begun to unthaw their budgets, though with new lockdowns looming in some countries, it may be too soon to settle on a post-Covid marketing plan.
“I probably have 10 different playbooks of what our strategy will be,” said Tommy Hilfiger Chief Marketing Officer Michael Scheiner.
Still, it’s clear that the pandemic has permanently rewired fashion marketing in key ways. Here’s where CMOs are placing their bets next year.
Putting a Price on Brand Awareness
In addition to cutting out-of-home advertising spend (Tommy Hilfiger’s last billboards were seen in February) the brand is also spending “very little” on print. Print advertising spending for 2020 is expected to drop 33 percent compared with last year, according to a September report from The Interactive Advertising Bureau (the report covers all companies, not just fashion).
To be sure, the rationale for glossy ads hasn’t gone away. Brands still seek the prestige of appearing in Vogue — even if they paid for the privilege — and Prada took out a two-page ad in The New York Times to promote its latest fashion show.
But now, CMOs say they are interested in spending money on marketing plays that pack a one-two punch, driving both brand awareness and sales conversions. For example, direct mail helps lingerie brand Cosabella engage its consumer at home and online, Chief Executive Guido Campello said. The strategy has been so cost-effective, he added, that the brand is building it into its budget for next year.
It became very clear quickly … we need to still be focused on brand.
Publishers are pitching brands on branded content, which can hold readers’ attention for longer and has the potential to drive sales more effectively than a simple ad.
Katie Grand’s new project The Perfect Magazine is making pay-for-play content explicit to partners during fashion month. Highsnobiety, the menswear publication that regularly covers luxury and streetwear, has seen more interest in not only its digital advertising offerings since March but particularly for its creative agency and consulting services, which the company says offers fashion brands the opportunity to build brand awareness online while also driving sales and website traffic.
Pressing Play on Digital Video
Digital marketing spend is proportionately higher, and the majority of budgets are spent on retailers’ display advertising, accounting for nearly $13 billion and two percent more than last year, according to data compiled by eMarketer.
Although it accounts for a smaller piece of the pie compared to display ads, digital video is becoming more important to brands, as spending has increased 11 percent to $6 billion. Some marketers have been asking for more online video opportunities specifically from their media partners, according to Forrester, while others have diverted budget that would have been spent in other channels towards building a more robust in-house content division, according to executives with whom BoF spoke.
“Even if these so-called legacy players have digital offerings, they don’t have the rich data on audiences from a social graph like Facebook or search intent like Google, so the targeting is less effective and doesn’t achieve nearly the same ROI,” said Joe Yakuel, chief executive at marketing firm Within.
Building out in-house content divisions and working more closely with third-party marketing firms helps brands get their content in front of the most engaged consumers.
Searching for Sales
Search ads also represent an opportunity for brands, as retail executives indicate they will spend nearly five percent more on the channel, putting spend at around $13 billion for this year, according to eMarketer.
Fashion labels are interested in juicing Google search to drive customers to their e-commerce platforms, said Aaron Edwards, chief executive at marketing firm The Charles Agency.
Cosabella CEO Campello said that this has been a boon to his business, given how Google now offers one-click shopping within the search function, making the journey from search to purchase smoother for consumers.
Doubling Down on Social
As for social media spending, TikTok — despite concerns over its future — remains top-of-mind for brands eager to court Gen-Z. Pinterest has recently rolled out new features to make influencer-brand integrations more impactful and has also been a successful platform in driving referral traffic to clients’ websites, said Edwards.
Instagram remains central to many fashion brands’ marketing strategies, as the platform acts as a one-stop content hub with integrated shopping tools (Instagram has newly launched shopping within IGTV and Reels) yet unmatched by other platforms.
Although it may be tempting for marketing executives and their teams to focus solely on driving sales, Hilfiger’s Scheiner said that diverting all spend away from brand building is a mistake, even in the challenging retail environment where there are more questions about everything from the second Coronavirus wave to the US presidential election’s impact on consumer spending to what holiday sales may look like.
“This shift [towards] performance [marketing], it obviously worked right away, but it became very clear quickly … we need to still be focused on brand,” Scheiner said. “Even though consumers are home, they still want to engage and they still want to be inspired.”
The September Issue Gets an Overdue Makeover
The Dos and Don’ts of Marketing During a Pandemic
For Influencers, Affiliate Revenue Is Next to Disappear