Luxury brands are caught in a Facebook advertising vice. Many of the same strategies that work for non-luxury e-commerce startups don’t work for luxury products and can also hurt the company’s brand in the long term.
A good majority of Facebook advertising is direct response marketing, which aims to elicit an immediate response, such as getting a customer to buy a product or join your email list. Direct response is highly effective because it’s trackable and measurable, targets a specific niche or audience and communicates a specific offer. These campaigns are often laden with messages such as “Buy now!” and “Order today for 20 percent off!”
Clearbanc, a venture capital alternative startup that has raised a total of $1 billion, mostly funds e-commerce startups with consistent revenue. Clearbanc’s co-founder, Michele Romanow, insists that 40 percent of venture capital dollars end up going to Facebook and Google ads. Many e-commerce startups seeking to scale their businesses are able to successfully do so by using direct response for quick and trackable injections of sales and site activity.
Brand messaging is more nebulous. These campaigns usually involve trademark ambiguous statements that encapsulate a feeling or ideology a company wants to associate with its brand. For example, when Apple launched its “Think Different” campaign, it didn’t specify any products or services, but rather aimed to attract creatives and customers who wanted to break away from the bland mainstream consumerism.
Although direct response marketing tends to deliver more paying customers for e-commerce shops, it can also dilute a brand. A luxury product inherently derives its worth from its brand, and messaging like “Buy now for 30 percent off while supplies last!” can cheapen a luxury brand in the eyes of consumers.
The Luxury Brand Challenge
Luxury brands are faced with a dilemma: On one hand, luxury brands need to protect their key asset (their brand), but on the other, they need to make sales to keep the lights on.
Facebook ads are great for generating sales, but they tend to cater to short-term direct response messaging rather than brand-building ads. However, that doesn’t mean luxury brands can’t reap the benefits of Facebook’s incredibly powerful ad platform.
So, how do you make Facebook advertising work for luxury brands?
We recently had a client with a luxury brand that didn’t see sales for four months. They tried various things, mostly consisting of vague, ineffective mixes of direct response ads and brand-centric copy. We found the best way to solve the luxury direct marketing conundrum was by weaving the brand’s story into the marketing campaign and focusing on what really matters for luxury brands: social proof.
At the end of the day, a vast majority of e-commerce products are almost commoditized. The meteoric rise of dropshipping flooded every market with a plethora of different brands, products and prices. Sure, a brand will traditionally help a product stand out, but it’s becoming harder to distinguish a high-quality product from a typical run-of-the-mill dropshipped product that ends up falling apart in a few months.
This is why customers generally tend to place a higher degree of focus on social proof as prices scale upward. If I see an ad for a $60 backpack, my main concerns are whether I like the design and if it looks like it will hold up. If I see an ad for a $600 backpack, my main concerns are whether it's worth paying that much for the brand. Will people recognize my fancy, expensive backpack? Will owning this backpack help me emulate a particular lifestyle, specifically that expressed by the brand?
Here are a few things to keep in mind when it comes to luxury brands:
Creative assets are of utmost importance. A luxury brand’s ads should contain ad copy, visual graphics and anything from external sources, such as press and influencers, that demonstrates that this is a product people like and, more importantly, perceive as being worth its price tag.
Your website needs to continue the conversation. Most luxury brands will likely have to make a few changes to their websites. Put the product first instead of ambivalent brand messaging. Show less stuff, and simplify the site’s navigation and options. Use rich photography -- don’t lead with just lifestyle pictures; use a mix of product and lifestyle photography. Ultimately, your site is your final opportunity to give the consumer a chance to buy the product and the brand.
Press. Press. Press. Press is one of the most effective assets luxury brands can leverage to demonstrate social proof. Some Facebook ad experts are even adamant that if a luxury brand doesn’t have adequate press, it’s better to wait to invest a lot of money in its Facebook campaigns until it does.
Luxury brands will inevitably need to build a longer funnel that takes into account the brand’s story and then uses that story to sell the product. In the long term, this is much better than trying to build artificial urgency and heavily discounting your products.