What Brand Marketers Can Learn From The DTC Playbook

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While marketers prepare for an uncertain 2023, some brands are reaping the benefits of their 2022 direct-to-consumer (DTC) strategy. That’s an opportunity for savvy marketers to make their value known.

DTC Is Driving Revenue For Some Of America’s Most Famous Brands, Like Levis.

“In 2022, we delivered strong, profitable growth as well as significant market share expansion, demonstrating the enduring strength of our brands, the diversity of our business, and our team’s focused execution of our strategic plan,” stated Chip Bergh, president and chief executive officer of Levi Strauss & Co. in a press release. “Our high-margin DTC business is delivering exceptional results, and our diversification efforts provide additional growth drivers for sustainable long-term growth.”

High margins are central to the appeal of DTC. Because DTC cuts out revenue sharing with wholesalers and third-party retailers, it can make it easier for brands to shift resources to marketing and digital user experience to drive revenue. When successful over time, DTC models can lessen the brand’s long-term reliance on retailers—something that Modern Retail reported as key to Levi Strauss & Co.’s business strategy as it ramped up its direct-to-consumer initiatives in 2020. 

According to the Levi Strauss & Co. press release, Q4’s strong DTC sales growth offset a decline in wholesale revenues. According to Multichannel Merchant, the company’s goal is to achieve position DTC as driving 55 percent of its topline earnings by 2027 by tripling its eCommerce footprint and expanding its overall DTC investment, per Retail Dive. That strategy is driven by data, according to CEO Chip Bergh, as the company only expects low single-digit growth in the wholesale sector from 2023 to 2027.

“Levi’s is by far our single biggest asset as a company, and the brand is stronger today than at any point in its history,” Bergh stated in 2022. “I’ll back that bold statement up with two data points. First is the record gross margins over the last few quarters. And second is the pricing power that the brand has demonstrated, with [average unit retail] up 10% year to date while we continue to grow unit volume.”

Levi Strauss & Co. is not the only iconic American brand that has leaned into DTC as a way to drive revenues in a time of economic uncertainty. Both PepsiCo and KraftHeinz launched DTC initiatives in the early months of the 2020 pandemic, with the latter recently completing the acquisition of a subscription business, JustSpices. 

“With Just Spices, we will leverage Kraft Heinz’s scale and agility to accelerate the business in the fast-growing taste elevation market beyond the company’s current German base and its recent market entries in Spain, Austria, and Switzerland,” said Rafael Oliveira, EVP & President, International Markets at Kraft Heinz. “We also see tremendous potential to further strengthen and enhance Kraft Heinz’s own direct-to-consumer operations and go-to-market expansion.”

KraftHeinz’s strategy in its recent DTC subscription brand acquisition reflects the opportunity inherent in the segment and its overall growth.

DTC Subscriptions Showed Strong—If Uneven—Resilience In 2022

Despite economic headwinds, the Quarter Over Quarter (QOQ) revenue growth rate for the DTC segment outperformed the S&P 500 in 2022, according to a recent report by PipeCandy. There are over 225 million DTC subscriptions in the U.S. today the report states, rounding out to about 3.7 subscriptions per subscribed household.  

That said—even some iconic brands, like Doc Martens, have seen lower-than-expected revenues from DTC, despite the channel showing nearly two-fold the growth rate of wholesale (15 percent versus eight percent). In addition, DTC sales do not always mean easier access to higher revenues. According to CNBC, costs can skyrocket and result in higher spending for the same sales or net revenue level. Much of the costs of developing a successful DTC plan come from marketing: when ROI falls, so do brands’ and investors’ appetite for DTC innovation.

Yet the opportunity is undeniable. According to recent data from Statista, 64 percent of consumers have purchased regularly from a DTC brand in 2022, and that figure will likely rise to 80 percent by 2027. The level of DTC penetration in the US could provide marketers with an unprecedented opportunity to shorten the sales funnel and garner deeper insights into customer behavior.

What It Means For Marketers

Retail success in any form is based on consumer confidence, regardless of how easy it is to purchase or how low the discount is at checkout. That means marketers will have a substantial role to play in guiding consumers to brand messaging that not only builds awareness of products and services but delivers the user experiences and answers to “is it worth it” that drive consumers to shop D2C in the first place.

Key Takeaways:

  • Marketers can transform DTC potential into revenue by leveraging data to tap into consumer brand affinity in messaging. That strategy may include leveraging creative engagement methods, like SMS, to capitalize on moments when existing customers may want to interact with content even when they are not ready to purchase.
  • DTC’s success is data-driven. Brands that see consistent growth in the DTC segment tend to build their strategy on insights gained from social listening – and the expert translation of those insights by marketers into strategy.

‘Dead Space’ Campaign Taps Into World-Building And Social Challenges

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Coinciding with the return of EA’s beloved ‘Dead Space’ franchise, Nightcap, the team behind the new tie-in social campaign @TheBench, chatted with us about introducing the world of Dead Space to new audiences while connecting with a long-dormant—but dedicated—community. EA and Nightcap wanted to create a campaign that matched how gamers interact and share content organically, inspired by the Dead Space ethos: a compelling story told in a progression of puzzles. This led the team to build a series of immersive and collaborative content experiences, tailored to the way audiences discover content across multiple platforms and devices.

An Organic Approach To The Campaign—A Focus On Community Building

Leveraging technology to support community building was key to engaging new audiences and long-time Dead Space fans. According to research from the Entertainment Software Association (ESA), most people game at least once a week and are motivated by a desire for a sense of community, in addition to the entertainment value games provide. According to a recent report from the ESA, 83 percent of players state that video games create a feeling of community, and playing games “can introduce people to new friends and relationships.”

Source: Entertainment Software Association

In addition, the ESA states that gamers reported playing video games helped them develop cognitive skills (88 percent) as well as creative skills (86 percent) and collaboration abilities (86 percent).

Source: Entertainment Software Association

Knowing this, Nightcap developed a campaign tailored to gamers, connecting their interests in immersive storytelling with their aptitude for collaborative, fast-paced problem-solving.

How The Campaign Began

A screenshot of a computer Description automatically generated with low confidence

“EA came to us to develop a social media program and corresponding rollout strategy for the remake of Dead Space that would allow our core franchise fans to participate in digital actions to earn rewards and attract the gaming community’s attention,” said Miranda Feneberger, Senior Strategist at Nightcap. According to Feneberger, EA let Nightcap take the reins to develop a unique approach to reintroducing the franchise to a new generation of gamers.

Expanding the Dead Space universe via immersive reveals over time is integral to the series’ marketing legacy, beginning with No Known Survivors in 2008. The original website promoted the first Dead Space release by introducing viewers to a playable immersive experience that unfolded over nine weeks, delivering two four-chapter stories that established the Dead Space world. Comprised of audio logs, video, and interactive 3D components, the two-story sequence, “Misplaced Affection” and “13,” launched with users clicking on one of nine floating body parts, which landed them in the Ishimura’s (the starship setting for Dead Space) Organ Replacement Lab. From there, users could explore the character profiles of workers on the Ishimura through audio logs and undergo a risk assessment test to assess their chances of survival.

For the new Dead Space release, EA and Nightcap reimagined the campaign’s interactive storytelling to leverage social media’s collaborative nature in a way that made world-building more immersive and connected to game lore. Cryptic messages began appearing on Twitter to invite fans to solve a QR-code-based puzzle. As fans collaborated to solve the puzzle, they shared their results on Twitter, Instagram, Discord, and Reddit. When solved, fans were rewarded with a link to an unlisted YouTube video showing footage from inside the Ishimura, and clues to access additional content, eventually unveiling the date of the gameplay reveal.

 Source: Dead Space Official YouTube

“EA gave us the gift of creative freedom, allowing us to design a program with a unique narrative that existed in the periphery of game canon,” said Alex Tafet, Creative Director at Nightcap. “We took this baton and sprinted with it, investing the creative time and energy into defining a compelling, unique narrative that existed within the larger world of Dead Space.”

Per Tafet, the campaign is an “Apocryphal Prequel” to the main game, existing alongside the larger story of the game, adding detail and nuance but not directly impacting the events the players will experience. Nightcap proposed a central protagonist for the journey, and EA provided a name: Chief Engineer Ariel Rousseau. 

“Rousseau is a character who exists in the game by way of audio logs, which are discoverable lore-builders that can be found throughout the game,” Tafet stated. “We were given the keys to the Rousseau kingdom and fleshed out a compelling backstory for the character, which defined the thematic and creative direction for our program.”

Rousseau’s story unfurls through a series of chapters published on the game’s official in-world Instagram account, @TheBench. Players who follow @TheBench receive urgent messages and cryptic clues from Chief Engineer Rousseau aboard the USG Ishimura.

Players then become members of the Comms Relay Crew to solve puzzles, decode data, and uncover hidden information to save Rousseau, the ship, and humanity. 

According to Tafet, the creative experience of The Bench was named after the player customization workbench in the game and is derived from Dead Space’s node map mechanic. In the game, Nodes are collectible items that can be exchanged for upgrades at the workbench. The Nightcap team used the Node Map design to inform the structure for the advocacy program’s visual language and functionality.

Source: Dead Space Official Gameplay Trailer

Fan response has been enthusiastic to the trailer, released in November, garnering 2.5 million views on the Official Dead Space YouTube channel and launching numerous sidebars on Reddit.

From super fans displaying new tattoos acquired in honor of the upcoming release to first-time players posting about their new interest in the game, the campaign stoked engagement through direct replies to posts and clues shared across multiple platforms.

Dead Space will launch on January 27. Watch the official trailer here.

Having The Bravery To Be A Change-Maker With Andrea Brimmer, Chief Marketing & Public Relations Officer At Ally Financial

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In this episode, Andrea and I discuss how she came to be the CMO of Ally, her approach to creating the brand, and how Ally is leaning into their role as a disrupter in the category to address pain points in the financial industry. Andrea also outlines how Ally impacts women’s sports, why that investment is so important for the future, and why it’s so important to her. They talk about having courage as a marketer, the importance of being willing to do the right thing, and why companies need to understand the weight of their marketing dollars.

Andrea Brimmer is widely recognized as one of the country’s most innovative and effective marketing leaders. According to her, the secrets are collaboration, passion and openness. At Ally, Andrea has a professional platform that intersects with her personal passion and uses that unique privilege to make a real difference in the world.

 In this episode, you’ll learn:

  • How Ally is showing up in authentic ways and changing the way people feel about their finances
  • The responsibility of banks in financial and social inclusion
  • Why Andrea considers Ally one of the most tremendous success stories in American Business History

 Key Highlights

  • [01:30] Being on Michigan State’s first D1 women’s soccer team
  • [02:30] Where Andrea got her start in her career and how she landed at Ally
  • [05:15] The narrative of short CMO tenures and the secrets to her success
  • [08:00] Modulating between being a wavemaker and a wave rider
  • [10:00] Allys transition to becoming a change-maker
  • [12:30] How Ally is making an impact on women’s sports
  • [18:00] The Diversity and Inclusion strides Ally is making
  • [21:50] How Andrea found bravery as a leader
  • [23:50] The impact of losing her brother
  • [25:50] Learning to enjoy the ride
  • [27:00] How brands show up in culture and what that means
  • [29:15] Brands to watch
  • [31:00] The changing role of the CMO and how that impacts the industry
  • [32:00] The next wave and how to market marketing

Resources Mentioned:

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 Connect with the Guest:

 Connect with Marketing Today and Alan Hart:

Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies but is an entrepreneur at his core, having founded or served as an executive for nine companies.

Data Clean Rooms: A Primer For Marketers

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From CES 2023 to Twitter, data clean rooms are big news and brand marketers may have a promising cookie alternative.

Cookies will be history by 2024, per Google. That may make new campaign ideation and audience segmentation challenging in the near future. Fortunately for marketers, data clean rooms may offer a safety net as they develop campaigns requiring deep insights drawn from first-party data.

“Unless there is a major change to how data is handled, less and less data will be available in the industry, particularly due the decline of the 3rd party cookie and device identifiers like IDFA,” the IAB Tech Lab wrote in a 2022 blog post. “ As a result, marketers will struggle to create personalized advertising, optimize campaigns, and attribute outcomes.”

The IAB believes that the demise of the cookie may have wide-reaching effects on consumers and publishers as well. “Consumers will receive less personalized and relevant ads, the post states. “Publishers may suffer decreased advertising income potentially forcing more subscription models and creating a move to a less open internet.”

According to Angela Eng, IAB VP of measurement, addressability & data center, this change has been a long time coming. 

“Over the last five years, we’ve moved in a direction where privacy regulations and consumer privacy require us to rethink the way the advertising ecosystem collects and uses data to target, measure, and optimize,” Eng stated. “Advertisers are looking for alternative solutions beyond the current third-party cookie and moving towards privacy-preserving solutions such as CDP, Clean Room, and CMPS.” 

How Data Clean Rooms Work

From social platform information to customer purchasing histories, a data clean room offers a secure environment where data can be analyzed and shared only with authorized individuals. Because all actions taken within the clean room are tracked and auditable, compliance issues can become less of a concern when campaigns and corresponding customer data inflows scale.

According to the IAB, a data clean room can be described as intermediary software that enables two parties to pool their data securely.

“Anonymisation is configured into the design: any personally identifiable information, such as email addresses, is encrypted, and access is only granted to those involved in a partnership,” reads a recent post from IAB Europe. 

“Data clean rooms are a secure, privacy-friendly way to help brands get a clearer and more detailed picture of their media performance, with insights that can help determine reach, frequency, and attribution metrics.“ 

The IAB described three types of clean rooms relevant for marketers in a recent post: 

  • Single-party centralized clean room: data from one party goes in and is analyzed in relation to other data sets.
  • Multi-party centralized clean room: data from multiple partners both inside and outside of an organization are aggregated 
  • Decentralized/agnostic clean room: data is connected in an independent, trusted environment. No one party has more privileges than another, and the data is not linked, thereby reducing the risk of data leakage

The IAB Tech Lab has stated that the use of a data clean room will likely be a central part of a future-focused data and privacy strategy for brands, marketers and publishers, but there is a caveat.

“Data clean rooms are not a silver bullet,” the post reads. “Ultimately, the data clean room is a piece of technology that cannot solve all privacy needs but rather works as part of a system of technologies and business needs.”

How Data Clean Rooms Can Support Marketers

For brand marketers, a data clean room offers several potential benefits when implemented with other appropriate Privacy Enhancing Technologies (PETs). One of the main advantages of a data clean room is the ability to gain a deeper understanding of first-party audience data by looking at contextual insights from multiple data sources in a General Data Protection Regulation (GDPR) or California Consumer Privacy Act (CCPA) compliant environment. 

Another advantage of a data clean room for brand marketers is the ability to collaborate with partners and third-party vendors, such as research firms or data analytics companies, without exposing sensitive data to potential breaches or misuse. 

Here are several ways brands, marketers, and publishers can leverage data clean rooms to support marketing or branding goals:

  • Audience segmentation: By analyzing customer data in a clean room, marketers can gain a deeper understanding of their target audiences, including demographics, behavior patterns and preferences. This can help marketers segment their audiences more effectively and tailor their messaging and campaigns to specific groups.
  • Performance analysis: A clean room can also be used to analyze past campaigns’ performance and identify improvement areas. For example, marketers can analyze data on website traffic, social media engagement and sales to understand which campaigns were most successful and which were not.
  • Predictive modeling: Clean room data can also be used to create predictive models that can help marketers identify future trends and opportunities. For example, by analyzing historical data on consumer behavior, marketers can build models that can predict which products or services will be in demand in the future and which segments of their audience are most likely to respond to certain types of messaging.
  • Fraud detection: A clean room’s multi-source data can be used to verify the accuracy of data collected from third-party sources, such as cookies or mobile device IDs. Marketers can also identify anomalies that may indicate fraudulent activity, such as bot traffic or click fraud. 

For Eng, navigating a cookie-less future, even using tools like data clean rooms, is highly dependent on marketers having access to the right data in the first place.

”Investing in deterministic first-party datasets (data from logged-in, “known” audiences) remains vital,” Eng stated.“ Yet, in most instances, this only represents about 20 percent of potential consumers. Marketers need proven, probabilistic solutions to target and measure the 80 percent of consumers who are not part of their first-party data.”

Trend Set: Mountain Dew Leans Into Drop Culture; L’Oréal Turns To Influencers Over 40

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In this week’s trend roundup from Ayzenberg’s Ashley Otah: an example of a brand leveraging a cultural moment and a beauty industry giant turning to “older” influencers for its latest campaign.

Mountain Dew

Mountain Dew has produced a hot sauce. The catch is you can’t buy it. Instead, those looking for a taste of the Baja Blast Hot Sauce must enter to win one of the 750 limited edition bottles available. The contest draws from “drop culture,” as only a select few will get a chance to claim the ultimate prize. Having established fans and newcomers alike hop on something they already enjoy increases brand awareness and affinity.

FanDuel

FanDuel is taking football fans on a ride for their latest campaign following former Tampa Bay Buccaneers tight end Rob Gronkowski while he prepares for the Super Bowl, where the retired football star will feature in a live ad in which he’ll attempt a field goal. The month-long campaign differs from one-off spots that can be lost in a sea of ads by becoming a part of a cultural moment.

L’Oréal

For L’Oréal’s latest campaign, the cosmetics company turned to influencers over the age of 40, highlighting the need for representation of all kinds, including age. Although social media is bombarded with ads targeting younger demographics, one cannot forget the purchasing power of a more mature clientele. Aside from that, the inclusion of all backgrounds has an impact beyond monetary gain.

State Of Mobile 2023: Social App Usage Soars, US And TikTok Top Consumer Spending

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A new report from Data.ai reveals that American consumers and TikTok lead in average revenue per user (ARPU), but is the platform delivering results for marketers?

TikTok Leads In Average Revenue Per User

Last year, according to Data.ai’s State of Mobile 2023, Android users spent over two trillion hours on social apps, representing 17 percent YoY growth over 2021. That tracks with findings earlier this year showing a rise in consumer hourly usage of social apps in key global markets such as the U.S. and the U.K., with users averaging between four and five hours actively engaged with social platforms per day.

While time spent on Facebook and Chinese platform Tencent QQ declined, TikTok, Snapchat, WePlay, and Zhihu showed strong user growth globally, per the report. TikTok has shown almost uninterrupted growth in user acquisition since 2018 and now leads other apps in another key metric, average revenue per user. That’s helped to contribute to its 215 percent boost in brand value over the last year.

“The US passed Japan in 2020 and China in 2021 to rank as the top market for consumer spending for social apps (though it’s worth noting that China is iOS only as Google Play is not available there),” per the report. “While growth slowed in 2022, top apps like Discord, Facebook, and TikTok have managed to maintain high consumer spending from the gains seen early in the pandemic.”

“TikTok made us reimagine how high consumer spending in apps-especially outside of mobile games-could reach,” the report states. “TikTok’s US average monthly revenue per user (ARPU) is well above its top social competitors at 85 cents per user. Snapchat is second at 5 cents per user with its recently launched subscription.”

Why TikTok Stole The Show In 2022

According to a recent HubSpot survey of more than 1,600 marketers, influencer marketing was central to the strategies of more marketers than any other approach to driving growth. Mobile-friendly web design and short-form video content came in second and third among trends marketers were leveraging most in 2022—all areas where TikTok marketing excels.

For those marketers who embraced TikTok in 2022, many were pleasantly surprised with a significant improvement in status quo ROI, according to a recent Nielsen report with TikTok.

“US paid media ROAS for TikTok was 14% higher compared to all digital media models, while ROAS for paid media was 64% in Europe,” the report states. “Moreover, sales efficiency was two times higher than the digital media average in the US.”

What it means for marketers:

TikTok offers a powerful combination of access to influencers and short-form video content in a mobile-first format. According to the Nielsen-TikTok study findings, TikTok can deliver high ROI consistently. That means developing a long-term TikTok strategy that leverages creators’ powerful influence on consumer spending on social can optimize marketing spend even when budgets remain flat.

“In-feed video is the most effective ad type for increasing audience response in TikTok campaigns,” according to the YouGov post. “Advertisers can enhance ad placement in the app to boost performance and enhance weekly in-feed impression volume by 50%, going by the US model.”

Read more about TikTok and social commerce.

The Business Benefits Of Continued Education With Michelle Boockoff-Bajdek, CMO At Skillsoft

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In this episode, Michelle and I discuss our mentors and role models, Michelle’s priorities as CMO, and why hearing directly from customers helps her ensure Skillsoft is preparing today’s workforce for tomorrow’s economy.

Michelle Boockoff-Bajdek is a big proponent of continual learning and believes development and growth should be accessible to all. She is passionate about making learning fun and gets to do just that as CMO at Skillsoft. As CMO, she is responsible for leading the global marketing strategy and increasing demand for Skillsoft’s solutions by understanding people don’t want to be marketed to; they want to be communicated with.

 In this episode, you’ll learn:

  • What jobs will be most in demand in the future and the current skills gap
  • The importance of marketers who also understand the financials of the business
  • Why Michelle puts such an emphasis on investing in leadership training

 Key Highlights

  • [01:25] Michelle’s Professional and Personal Role Models
  • [06:30] Michelle’s journey to becoming CMO of Skillsoft
  • [10:15] What is Skillsoft and who do they serve?
  • [13:45] Most in-demand roles and the skill gap
  • [14:15] Skillsofts tops 3 business priorities
  • [16:40] Skillsofts top 4 marketing priorities
  • [20:40] The importance of cross-functional training and curiosity
  • [23:00] The importance of training first-time managers
  • [25:40] Sustainability initiatives at Skillsoft
  • [29:15] How 9/11 impacted Michelle’s leadership style
  • [35:05] Learn to give yourself grace
  • [37:10] Markets have to be business people first
  • [38:25] Brands and causes that are impressing Michelle right now
  • [40:30] The threat of not investing in training for the future
  • [41:25] The importance of values alignments and authentic communication

Resources Mentioned:

 Follow the podcast:

 Connect with the Guest:

 Connect with Marketing Today and Alan Hart:

Alan B. Hart is the creator and host of “Marketing Today with Alan Hart,” a weekly podcast where he interviews leading global marketing professionals and business leaders. Alan advises leading executives and marketing teams on brand, customer experience, innovation, and growth opportunities. He has consulted with Fortune 100 companies but is an entrepreneur at his core, having founded or served as an executive for nine companies.

Retailers Look To Search, Partnerships For Growth In 2023

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According to a recent report from CommerceNext, retailers are seeing falling ROI on some ad strategies and will look to partnerships to boost customer acquisition and revenues in 2023.

The CommerceNext report, 2023 Digital Trends & Investment Priorities: A Brief Benchmark Report On Growth, Risk, And Strategy, reveals that the majority of retail marketers are reporting less growth than expected in 2022, and 42 percent are showing flat or declining sales.

“Inflation and interest hikes cooled consumer demand and forced more consumers to shift spending to non-discretionary items like groceries and gas,” the report states. ”These factors have sobered up retailers and brands who have tempered their forecasts to reflect both the anomalistic nature of 2021 and a new batch of macro forces that could curtail sales further.”

According to the report, this was especially surprising for retailers selling online, as eCommerce has shown robust growth during the past years since the start of the pandemic.

Marketing KPIs Faltered In 2022

For marketers, 2022 meant increased pressure on strategy to deliver conversions. Yet according to the report, most failed to meet expected benchmarks in 2022 in paid social.  

The combination of missed KPIs and lowered expectations for consumer spending have led to a new perspective on 2023 among retailers, according to the report.

“Humbled by both disappointing sales and harsh economic trends in 2022, retailers and brands curbed their enthusiasm for 2023,” the report states. “Growth rate expectations are in line with 2022’s actual performance, with nearly half (45 percent) of respondents projecting flat to single-digit growth (see Chart 2) and 11% are projecting negative growth.”

The report states that as economic uncertainty lingers, retailers and brands are limiting technology investments and doubling down on developing more effective strategies to boost marketing ROI. The report states that that will be more challenging in 2023 because of slowing online growth, the complexity of gaining accurate metrics, as well as the apparent downward trend in paid social KPIs.

Marketers May Dive Into Social Commerce 

According to the report, over 70 percent of retailers believe that most of their revenue in 2023 will come from retention and acquisition marketing efforts, with just 15 percent seeing improvements to customer experience as a revenue driver. According to the respondents, the bulk of customer acquisition spend will be focused on three areas: paid search, paid social and partnerships and affiliates, with 36 percent allocated to influencer marketing. 

According to the survey, as retailers shift their paid social strategy in search of improved ROI, they may look to diversify their spending on social platforms. 

“Where will those acquisition dollars go now? In terms of strategic shifts in social specifically, TikTok will likely soak up some extra ad dollars as retailers increase testing and try social commerce,” the report states. “TikTok end-to-end commerce is coming and is worth carving out some testing budget. The social media giant is staffing up its own U.S. fulfillment centers and continues racking up social commerce buyers faster than any other platform other than Instagram.”

Read the full report.

Trend Set: Hyper-Personalization Grows On Social

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Meeting people where they are—whether through personalized content streams or inclusive design—is the latest brand pivot, as outlined by Ayzenberg’s Ashley Otah in this week’s trend roundup.

Twitter

In another example of “​​TikTokification,” Twitter is overhauling users’ timelines and prioritizing a new “For You” feed, which shows users tweets from people they follow interspersed with tweets curated by the algorithm. With this move, the social media giant is communicating its intent to compile and share content that’s tailored to each individual, highlighting a more significant trend: hyper-personalization.

According to a 2018 report from Epsilon, 90 percent of consumers surveyed said they find personalized marketing appealing, and in a different study from McKinsey & Company, 78 percent of respondents said personalized content made them more likely to repurchase from a brand. So it’s no surprise there is an uptick of platforms gearing up to pivot toward personalized content feeds. For the foreseeable future, brands should focus on hyper-personalization while staying true to their native platforms.

L’Oréal

Earlier this month at CES, the consumer tech industry’s big annual showcase, L’Oréal unveiled Hapta, a motorized device capable of distinguishing unwanted hand tremors from intended movements designed to help people with disabilities apply lipstick.

This is a significant step toward inclusivity, as the device aims to help people with limited mobility gain more independence. Inclusive design should not be an afterthought but a foundational component built in from the start. However, there is always room for growth. In the future, L’Oréal hopes to make more devices available and accessible as the brand leans into its beauty/tech strategy.

TikTok

TikTok is building a new way for creators and brands to band together. With an update to its Creator Marketplace, the short-form video platform has created a one-stop shop for managers to execute, oversee and analyze campaigns. A new addition to the platform is the Talent Portal, which allows managers to negotiate brand deals for clients. The combination of the two creates a perfect storm for creators to land more deals and for brands to maintain and grow partnerships. Creating easily navigable and needed products is a win.

Could AI Be A Powerful Creative Tool For Brand Marketers?

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Can brand marketers leverage AI as a tool that amplifies rather than limits human creativity?

In a recent commercial for Mint Mobile, actor Ryan Reynolds uses a script written by the AI-powered platform’s ability to mimic his style of speech and delivery and notes that its accuracy is “mildly terrifying.” However, for some brand marketers, the debate over whether and how AI can support creative marketing is genuinely frightening. Since copywriters, content strategists and other creatives do what ChatGPT does—creating marketing copy and long-form content—there’s been significant debate about the prospect of AI diminishing the role and value of brand marketers and the creatives with whom they collaborate. But some analysts are looking at AI as an opportunity for brand marketers and creatives rather than a threat.

Is There A Role For Human-Led AI Creativity?

So why is ChatGPT so good? According to the Content Marketing Institute, the most recent release of the open-source AI technology that powers tools like ChatGPT—GPT-3—represents a sea-change in how well these platforms work.

“Each version has gotten progressively better at producing text that reads as if a real human wrote it,” the post states. “The release of GPT-3 resulted in an exponential jump in skill and accuracy as compared to GPT-2.”

ChatGPT, which generates content based on prompts, is one of many options that brands have for creating content ranging from original artwork to blog posts to scripts. According to an article by Harvard Business Review, the possibilities for marketers and brands are vast.

“[Generative AI models] can take in such content as images, longer text formats, emails, social media content, voice recordings, program code, and structured data,” the post reads. Once input is processed, AI platforms “can output new content, translations, answers to questions, sentiment analysis, summaries, and even videos.” 

While generative AI platforms have been used to create copy and even full-length movie scripts, there’s a significant caveat, according to a recent article by Harvard Business Review. “To use generative AI effectively, you still need human involvement at both the beginning and the end of the process. Once a model generates content, it will need to be evaluated and edited carefully by a human.”  The wooden, awkward sentences or the word-salad produced by early versions of auto-generated content tools can still happen with modern AI platforms. But there are also examples of powerful, human-like responses to prompts that can inspire consumers and challenge creatives to build powerful messaging around a specific theme.

When a columnist for The Atlantic entered a tricky challenge designed to test Chat GPT’s ability to respond to contradictory or irrational suggestions, they received the following reply:

The most sophisticated tools have limits—even with GPT-3. There’s no ”plug and play” with generative AI, and that means it should be seen more as a tool than a potential replacement for human creativity.

How Brands Marketers Are Using AI To Optimize Creative Talent

Nestle is one of the brands that has embraced AI as a tool to amplify human creativity. The company first used AI to improve its R&D and product development processes and is now using it as a tool for social listening.

“We established an artificial intelligence concept engine, which is transforming (social media) insights into concept proposals, which our employees then evaluate,” stated Stefan Palzer, chief technology officer.

The company has also used AI as a central actor in a recent AI campaign for La Laitière yogurt, in which Vermeer’s famous painting “ The Milkmaid” was expanded.

According to Ogilvy ECD David Raichman, brands and creatives warming to AI as a tool can allow agencies to streamline content creation.

“A.I. generated imagery is a revolution, and all the creative industry should embrace it,” Raichman says. “It will probably have us rethinking lots of jobs, but in a good way. Illustrators will be able to sketch roughs more quickly. Photographers or art directors will create mood boards more easily. We see A.I. as an amplifier of creativity. It democratizes the process. We just need to keep in mind that it should be used in a meaningful way and ensure that there are still creative people directing the A.I., and not the other way around.”

The technology behind AI-powered image generation is fairly straightforward. AI tools that feature text-to-image capabilities may use leverage a network called CLIP (short for “Contrastive Language-Image Pre-Training”) which classifies and then ranks input or generated visual information according to how likely it is to be classified under a given text prompt. That makes it easier for machine learning engines to present a more relevant representation of a concept, based on a text prompt. That ability to rank is limited by the datasets that a particular AI tool has access to and also by the limits of the technology itself. 

A recent campaign by Hardee’s designed to add humor to the conversation around AI resulted in several humorous results from a text-to-image generation exercise.

Source: Hardee’s

“With the spectre of AI hanging over us all, it was the perfect time to show not what it can do, but what it can’t. Each image Ai generated therefore became an eye-catching reminder (and proof) that Ai isn’t quite there yet,” stated Jamie Kennaway, Executive Creative Director for the campaign.

The takeaway? AI works best with human brilliance as a mitigating force.

The Takeaway For Marketers: What Can AI-Powered Creative Campaigns Really Do?

Here are just a few benefits for brand marketers:

  • Simplified creative personalization
    • As with Nestle, AI can deliver impactful creative prompts that leverage vast datasets to boost campaign originality. When creatives work with a powerful concept, their expertise can make the end result shine while using fewer human resources at the beginning of ideation.
  • Streamlined concept-to-product processes
    • The Hardee’s campaign highlighted AI as a humorous tool for new product development. But Nestle, as stated above, has integrated AI tools into their R&D and product development process, optimizing social media prompts to fast-track new product ideation.
  • Supporting content production at scale
    • While creative collaborations between humans and AI may always be controversial—some content creators are finding value in looking at AI as a tool rather than a competitor. Tools like Jasper.AI and ChatGPT are no substitute for content creators, but their prompts can speed up repetitive content creation tasks for teams with high output responsibilities, such as news organizations.

Case in point:

Learn more about ChatGPT.