The COVID-19 pandemic turned 2020 into a seemingly endless cycle of terrible news and traumatic events. The pandemic is still ravaging countries such as India and South Africa in mid-2021, but renewed attention to getting vaccines to people worldwide offers indications of hope — and the promise of optimistic times to come.
For marketers, there is work to be done in light of that promise. As people in countries such as the U.S. begin to venture outside of their homes, ad budgets are ramping up across every industry.
According to a recent estimate from Magna, U.S. ad spend is expected to grow 6.4% to $240 billion in 2021. That tops its previous estimate from December 2020, which totaled $230 billion — suggesting analysts are playing catchup as they tally consumer and advertiser demand that only continues to grow.
For beauty brand marketers, traditional ad channels will be packed with competition, which presents a challenge. Their teams need to stand out while still making a strong connection with their audience. To top it off, they must continue to deliver a strong return on investment.
How can beauty marketers steer their strategies and overcome these challenges? The answer is activating an ad channel that is at the center of growing consumer trends and delivering strong ROI: connected TV.
Competition is driving the cost of social media for marketers
It is safe to say that the usual ad channels will be a battleground as consumer confidence grows. Popular social channels are already seeing CPMs rise, with agencies reporting that Facebook CPMs increased anywhere from 30% to 47% in March. The uptick brings them back in line with pre-pandemic rates, even at these early stages of reopening.
That is a concern for beauty brands since social, especially in terms of video ad formats, is a natural fit for visual storytelling. It is a no-brainer to have a strong presence on social ad channels — not only does it offer a compelling ad format, but it delivers strong results. However, its effectiveness will prove a double-edged sword; brands will be there spending big to capture conversions, but so will their competitors. The net result is a crowded space, higher CPMs and a lower ROI.
To compete in a crowded market, advertisers must zig when others zag
The key to navigating the intensity and costs of competition in 2021 is finding a way to zig while others zag. The best way to do that is to analyze the data and trends that took hold over the past year and use those to determine where ad spend will matter most.
For example, connected TV sits at the intersection of two major consumer trends that skyrocketed throughout 2020. Emarketer estimates that more than 200 million people will stream content through CTV this year. And while it is common to think of subscription-based services like Netflix or Disney+ when discussing streaming television, 80% of connected TV viewers regularly watch ad-supported content.
Shoppers, meanwhile, have embraced e-commerce. According to a new survey of 10,000 beauty shoppers, only 19% said they would regularly purchase more than $50 worth of beauty products in 2019. That number jumped to 49% in 2020.
CTV is a sweet spot for beauty brands because it functions like a digital ad channel, but with a TV commercial as its ad unit. It’s now possible to deploy a visually compelling ad on TV, then track its impact on website visits, conversions, revenue and a host of other metrics.
Marketers are tapping into consumers’ TV watching habits
Beauty shoppers are buying more online, so brands are working to create ads that effectively drive shoppers to their sites to convert. Some marketing teams would not assume TV is the best format for that outcome. After all, shoppers can’t convert on a television screen — purchase requires a second device, such as a phone or laptop, to navigate to a site and buy.
With that in mind, research suggests 88% of viewers are on their phone or tablet while watching television, which means once an ad is served, a brand’s audience has the means to visit the site immediately. There is, however, a trick to getting the combination of devices and shopping behaviors to line up.
Many marketers serve connected tv ads on laptops, mobile devices and tablets in addition to television screens. While this may be good for generating more impressions (and spending more of a team’s budget), it is harmful to actual campaign performance. Viewers are incredibly unlikely to interrupt their viewing session on a mobile device to close out of their app and navigate to an advertisers’ site. This is a primary reason why a brand’s CTV ad solution needs to serve exclusively to television screens.
What happens when viewers can multitask, keep watching and shop at the same time? Brands are likely to see those viewers take action. The strategy takes advantage of increases in CTV viewership and leverages viewers’ second-screen habits to deliver better results.
Connected TV provides an enormous opportunity for beauty brands looking to tap into the optimism of a reopening world. The CTV environment will help marketing teams sidestep overcrowded ad channels, tell their story and differentiate their brands from the competition.