Structuring Your Social Commerce Strategy for Profit & Efficiency
Rise recently attended CommerceNext with over 1,700 retail and DTC executives to discuss the hottest topics and growth opportunities in the industry. I am excited to share my presentation about social commerce from the event with you.
To start, social media today is much more than the land of pretty pictures and funny comments. It has grown to be a true extension of people’s lives, including places to dance, learn, and shop. Brands need a successful social commerce strategy in order to maximize their media dollars across platforms and tactics in this essential advertising ecosystem.
With all of the advancements that are happening, with more and more of them throughout the years, there are three things that you need to be successful on social commerce:
1. Structure your accounts with the right levers in your campaigns to optimize your marketing strategy and stay in control.
2. Use the right ad formats to speak to customers in specific stages of their shopping journey so that the message resonates with them and moves them along that journey.
3. Prepare your data so that it is input-ready. This means data that is ready to be used on the social platform(s) of your choice. It is data that can be used to optimize your dollars on those platforms and inform more impactful business decisions.
Before we dig into those three topics, let’s start with how social media and social media advertising have evolved over time.
- Meta first rolled out automation with Automated Placements in 2011. This feature decides for marketers where to best serve ads across Meta platforms.
- It wasn't too long after that when campaign budget optimization (CBO) came about. CBO added budgets to the platform’s decision-making power, deciding which ad set to spend your dollars on, which ones to prioritize, and how much to spend.
- The following year, Dynamic Creative was introduced. There are a few different variations of this, but essentially advertisers provide the platform with different images, videos, text, and preferred calls to action. Dynamic Creative decides which combination of these to serve individual users for optimal results.
- Advantage Plus was then released in 2022. Advantage Plus is the most automated of Meta products that gives even more decision-making power to the platform, including the audiences that you reach, and the locations that you are targeting.
This trend towards automation is not exclusive to Meta, let alone social media. We see other platforms using automated placements like Snap. Pinterest is leaning into campaign budget optimization. And, Google is very heavily pushing Performance Max, with even more automation to come.
What remains the same, however, is that customers go through their individual shopping journeys, beginning with their awareness stage and discovering possibilities before moving on to finalizing their selection from the products that they've seen, and then ultimately making a purchase. As advertisers, our job remains the same. We are here to serve the right user, the right message, at the right time. For social commerce, we can do that through ads that support our product catalog or through static or motion ads that champion our brand's look and feel.
Put Automation to the Test
So the question then becomes, is automation working for our brands? Are we able to reach our goals with what is out there? Let’s consider these questions across three different types of customers.
Customer A is aware of the brand’s products, Customer B loves the industry and the brand’s organic social, and Customer C is a brand loyalist. There is one thing all three of these customers have in common - they are in the Brand’s customer relationship management (CRM) list. As such, they can all be seeing the same ads. Even with the best practices that the platforms release, you need more to create a successful social commerce strategy, starting with campaign structure.
Build Audience-First Social Media Campaigns
1. Structure Campaigns to Serve Customer Needs
In order to have full visibility into the customers we are talking to, where they are in their purchase journey, and the ads that we are serving, we need to create the right levers as we structure our campaigns. For an e-commerce brand, you typically have two types of customers: those who are very in the know AND those who need a nudge.
At Rise, we create audience-first campaign structures according to the customer type. Whether we're talking to existing customers, known prospects, or net new customers who have not engaged with your brand yet, we build the campaign so that we can serve tailored messaging and allocate budgets accordingly.
2. Use 1P Data to Drive Relevant Customer Experience
Once you have your ideal campaign structure, it’s time to maximize your first-party data. First-party (1P) data is all of the data you have in your CRM, collected from different customer touchpoints, such as mailing list signups, account creation, website interactions, or purchases. We can also look at the frequency and value of these engagements to really understand where they are with your brand and maximize their lifetime value.
3. Find New Customers with Qualified Data Sources
After saturating that pool of qualified users that you and your data know very well, you're ready to expand the list to include more sources. The natural progression is to start by creating lookalikes of your 1P data. Lookalike audiences find a pool of users that are similar to your highest-value audiences using your 1P data as the reference. Once you have saturated that bucket of lookalike users, you will need to find additional audience sources.
The next group we recommend is native audiences, such as interest and behavioral targeting, from all the platforms you are present on. While the quality of interest targeting has declined since iOS 14.5 was released a few years ago, they do still help find relevant audiences that are specifically interested in the determined subject.
To combat declining audience quality from native sources, we are also educating brands to look at one more option to enhance their targeting. So that you are not only reliant on native targeting from the platform, you can also lean into third-party providers whose entire job is to really understand how they can track different behaviors over the Internet that can allow us to enhance that audience targeting.
4. Bid Based On Product Margin in Real Time
And finally, CBO is not going away. What we can do is make sure that the data that we are using to optimize our campaigns is the same data that we are using to make business decisions. For example, we are always talking to different brands about how to connect Adobe data with the different platforms. It's an endeavor on its own, but it's something that is worth the time investment so that every decision-maker in your organization will be doing so with the same data, and the automation will be making decisions for you that you would make yourself.
Differentiate from Competitors with Sequenced Messaging
If everyone uses these four steps, the question then becomes, how do we differentiate ourselves from our competitors? The answer really goes back to how do we serve the right user, the right message, at the right time? Rise’s approach to that is called sequenced messaging. Here is a sequenced messaging example:
STEP 1: Someone is new to your brand, they're starting out on their purchase journey and don't know what's available yet. We may want to serve them a video asset that has more latitude where we can explain who we are beyond the different products that we may carry.
STEP 2: Once they've clicked through to our site and poked around the different products, we follow up with a carousel ad that displays some of the products that they've searched. You can also include complementary products that they may be interested in to further encourage them to continue their journey.
STEP 3: Then when they are exhibiting signals that they want to purchase, we can serve them a conversion ad with a strong call to action, such as any deals or offers, to further underscore the urgency in making a purchase.
Now, just because two brands are in the same space doesn't necessarily mean that they are directly competing. In this case, the differentiation really becomes the levers we create and where we focus budgets based on customer and data analysis. For example, Brand A and Brand B below are in the same industry. Are they directly competing for ad space though? (Spoiler alert: the answer is no.)
- BRAND A has minimal brand awareness, but a decent amount of very loyal customers. We know from the data that Brand A customers have a high lifetime value and repeat purchase rate. Brand A may want to focus more spend on the awareness and consideration stages of their campaigns in order to widen the pool of these already very sticky users.
- BRAND B enjoys great brand recognition, but has a higher price point. As they go through their purchase journeys, many ultimately drop off before making a conversion. Brand B may want to focus more spend on conversion ads so that they can explain their value proposition or extend deals and offers that make them more price competitive with their competitors.
It is this type of budget allocation customization that allows brands to be competitive and really focus on areas that will drive their business forward. Using the right levers in your campaign set allows you to make these decisions because you have full visibility, as well as the ability to influence the amount of budget that you allocate in different areas of your account.
How will this evolve in the future?
I'd be remiss not to mention AI (artificial intelligence), but my recommendation is more than you think. Our team did a quick experiment around how generative AI will shape the future of creative assets across the social media platforms.
We used a very pointed AI prompt for an Instagram ad. In this case, it’s white Nike sneakers. We had the color, the brand, the item itself, and knew exactly the type of background the product should be shown in, a skate park. AI then generated these options for social creative:
You'll notice that neither of these images have quite what we were hoping for. It’s very cool that an automated system made them, but they are a first draft. So while we're excited about the prospect of generative AI, and there's a lot to be excited for, we also know that the technology still needs to catch up to allow us to really lean in and take full advantage of what is yet to come.
As we wait for the technology to catch up, there is a lot we can do. Rise is educating our brands to partner with existing providers whose tools test and determine the best creative version or combination after you share different inputs, such as the copy, the images, and calls to action They then create ad variations at scale for every single customer type that you are trying to reach, at every stage of the journey that you need to reach them on. More importantly, look for partners that can provide you with data in order to draw meaningful insights from this data. It's not only important that you're testing, but also that you have a partner that can curate all this data that you can use to elevate your strategy. This is the most important part to prepare yourself for the future of AI that is to come.
Three Key Takeaways for Social Commerce Success
1. Ensure that you have the right customer types in your account, and target enough of these customer types to reach them in the moments that matter.
2. Use ad creatives that are not stale. Incorporate enough creative variations in the different groups of customers you're trying to reach so that you're always resonating with them and moving them along their shopping journey.
3. Most importantly, build a strong infrastructure so that you not only have the levers, but also full visibility into all of your marketing dollars.
Want to learn more about social commerce and building an audience-first approach to exceeding your goals? Contact us today!