by Connected TV and streaming audio spots, bought the right way, may be the ticket to … well, tickets
FRANKLIN FURNACE, Ohio — As consumer demand continues to weaken, streaming TV, radio and other digital options may hold new promise for furniture retailers looking for fresh ways to bring traffic into their stores.
Advantages include not only the ability to save money by targeting marketing dollars only toward those consumers most likely to buy, but actually getting reports that show one-to-one connections between those advertising buys and consumers opening their wallets. With this in mind, Home News Now checked back in with Big Sandy Superstore here to see how its transition into streaming television and other digital advertising channels is panning out.
There has been a lot of movement in the digital and streaming advertising space as well as in furniture retail since HNN first reported on OTT (or over the top television) back in July 2021. New streaming channels, such as NBC Universal’s Peacock and Paramount+ have arrived. There’s talk now that Disney+ and Netflix are mulling ad-supported versions of their platforms to appeal to those consumers unwilling to dole out the money for premium subscriptions. Then there are the rising data privacy concerns and initiatives poised to throw a wrench in the works of some display ad and Facebook ad strategies. On the retail side, those same consumers who are cutting cable cords and rethinking all their digital subscriptions also seem less excited about the furniture and bedding category than they were just one summer ago.
As Big Sandy CEO Robert VanHoose put it, “demand is shrinking’ and retailers now have to “work to attract footsteps.”
Like many others in the space, Big Sandy’s sales have fallen behind this year compared to last year even as price increases have bulked up the average ticket. He estimates sales to date for the 29-store furniture, appliance and electronics chain are down about 13% from a year ago and that gap is slowly widening. But without some of the moves the retailer has made to shift marketing dollars to streaming and other digital channels and employ tools provided by partner Octillion, a platform-as-a-service company, VanHoose hazards to guess business would be down much more.
“(Octillion) has added Peacock, audio, and several attribution tools that have really allowed us to continue to fine tune our marketing efforts,” he said.
What’s more, Big Sandy has been able to add the features without ballooning its advertising budget, and as VanHoose pointed out in the earlier story, the programs and services he is using are targeted and transparent. Big Sandy knows when a commercial on streaming TV (and now streaming audio) or an online ad actually leads to a purchase. Streaming has replaced much of the shotgun approach of its traditional advertising with truly honed buys, targeting so-called “intenders,’ for instance — those Octillion has identified as new homeowners, movers, recent home equity loan applicants or someone else that has indicated they’re in the market for a new mattress or living room group.
Octillion has become a dominant platform in the home furnishing industry. It’s not an ad inventory reseller, but a business with direct relationships to the myriad digital and streaming content publishers and platforms along with direct access to their ad inventory. Last year, CEO and Co-founder Gabe Greenberg told HNN the tech company was working with about 200 furniture, bedding and appliance dealers, including several HNN 125 players such as Big Sandy. He declined to offer updated numbers, but said its position in the industry has grown considerably, with many more retailer clients, large, medium and small, thanks in part to its partnerships with certain buying groups. What’s more, Octillion is now working with several industry suppliers as well.
The reason for the growing interest is clear. Traditional media doesn’t work as effectively as it used to thanks to all the cord-cutting going on and the splintering of content offerings and subscriptions. What’s more, the transparency around how or if traditional media buys are working never really existed in the first place.
Greenberg pointed to stats shared at a recent Samsung NewFronts presentation that showed 78% of U.S. homes today mostly stream content compared to 22% that mostly view via standard broadcast television. Yet many retailers in this industry remain weighted the other way, dedicating a much larger portion of their marketing budgets to broadcast, vs. streaming or other digital. And when they do buy streaming, many are still doing it through resellers, such as their local TV station reps.
Others, such as Big Sandy, however, are coming around. VanHoose said Big Sandy’s OTT budget to broadcast mix is roughly 50-50, now. He estimates 35% of the retailer’s March/April sales can be directly tied back to its OTT spots at a cost of advertising of about 1.9%. In other words, for every $100 in sales, the ad cost is $1.90.
Big Sandy also just added audio streaming spots through Octillion, too, (think platforms such as Spotify and iHeart radio) which accounted for about 2% of sales at a cost of advertising of about 2%. In both cases, the cost of advertising is well below industry overall averages, which VanHoose estimated are in the range of 5% to 6%.
So even as Big Sandy has bumped up its streaming budget, its overall advertising expense has trended down. And the effectiveness of its marketing is up.
“Here’s what I like about OTT vs. traditional TV,” VanHoose said. “With OTT, I only target intenders. And that intender bucket includes new movers.” On the other hand, if VanHoose were to go out and buy a list of consumers who have just moved, it would be a direct-mail-oriented list at a cost of about $1 a household, he estimated. “And that’s to reach them one time,” he added.
With OTT, the new movers are automatically in Big Sandy’s intender bucket along with new home equity line holders and consumers who are online searching for Big Sandy’s products. There’s no waste, VanHoose said. He’s only targeting the best prospects and he’s doing it for less.
Here’s a closer look at some of latest developments from Octillion:
The addition of streaming audio to the mix. There are a bunch of them, including Spotify, iHeart Radio and the Cumulus Media app. Greenberg said Octillion has access to pretty much all of it and gives retailers the same ability for geo targeting, internder targeting and attribution across the channels just as it does with connected TV.
Retargeted display ads. The company has always offered re-targeted connected TV, but now it’s doing the same thing with the audio offering as well online display advertising — basically following the consumer around after they’ve been exposed to the retailer’s earlier ad and hitting them up with another. One way it does this is by placing a pixel on the retailer’s website so that anytime it sees that consumer online again, “we can serve them with digital advertising — banner ads and other forms,” Greenberg said. So they’re picked up at Big Sandy, but then when they’re seen on, say, Elle Decor or Cosmo or even an automotive website, they get another Big Sandy spot.
Another example: Octillion places a pixel in the retailer’s audio or streaming television ad, and the same thing happens when the consumer is picked up later somehwhere else online. (For an explainer on the difference between pixels, cookies and tags, see this from LearnWebAnalytics.)
Octillion also offers something called retargeted geo-fencing, which means it can retarget someone who physically visits the retailer’s store or a competitor’s store. That could come in handy for Big Sandy or any retailer who might want to build a retargeting campaign around consumers who have recently been to, say, the nearby Home Depot.
“It becomes very powerful,” Greenberg said. “You know they’ve been to your location or one of your competitor’s locations. And it’s more credible data because its from your own website or your own store or ads.” Also, according to Greenberg, this consumer activity has just happened. “Whereas a third-party data set could be a week old, several days old or as much as 30 days old.”
Octillion, he said, has expanded its location tools over the past year, making them more power by bringing them in house. It’s constantly updating these and other features.
Sales attribution improvements. The company always offered a powerful tool helping retailers tie actual sales to streaming ads, but until recently it couldn’t say the same of its web attribution solution, which aims to connect consumer web visits to correspond online sales and online ad exposures. Another recent sales upgrade: The company has released an enhancement to show a retailer how one creative campaign performed vs. another.
“Before we told you how well you did in sales, but you weren’t able to necessarily determine which creatives were driving those sales,” Greenberg said. Now retailers can.
Greenberg contended Octillion also is the only platform that can show how a specific channel performed for a retailer on a given platform. So, the Sling streaming platform may be performing for Big Sandy, but what about the Fox channel on that Sling platform? In the past, a retailer might decide to drop Sling altogether if it wasn’t performing well enough. Now the retailer can just drop the poorest-performing individual channels.
Asked if Octillion gets much pushback from retailers who are leery of sharing their customer data with the company in order to get the best attribution results, Greenberg said “absolutely,” and not only are they concerned about sharing it with Octillion, but in cases where the company is working with buying groups and manufacturers with co-op advertising dollars, they’re worried about that customer data falling into the manufacturer’s hands as well.
But Greenberg said the concern is misplaced, noting that as soon as the data hits Octillion’s system, it’s anonymized, meaning the custom gets turned into a random ID number. In addition, Octillion, itself, protects the data by, in turn, working with big third-party platforms, such as LiveRamp, which does “data onboarding for a living; their entire business is to secure and silo data.”
Nevertheless, Greenberg said retailers still struggle with this when, in today’s challenging and changing environment, they really need to be thinking differently and actually opening their data sets to gain similar access from like players.
“This is really almost a call to arms,” Greenberg said, “for retailers working together in a buying group or a performance group to collaborate,” he said. “Bring your data together, but in an anonymized way, where it can be used as a targeting data set.
“With privacy changes happening around data, with cookies going away, retailers need to be thinking about ways they can remain competitive and come up with solutions that help one another, and do so in a way that doesn’t hurt themselves.”
All of this is going to require the kind of mindset change that makes retailers and others in the furniture industry a little uncomfortable. But as demand slows and things return to “normal” with sales bunched mostly around the major holidays, this may be the perfect time to rethink and re-strategize.
Which brings us back to Big Sandy and VanHoose, who has a thought for retailers afraid of embracing change despite all the efficiencies that come with this new way of buying streaming and digital advertising. For years, retailers have been buying their TV spots and now digital from the same local TV reps — essentially resellers of streaming inventory. They go out to lunch with them and play golf together, but their friends just don’t have access to the same inventory or offer the same transparency that’s even more important in lean times.
Change is hard, VanHoose said. “But I like to say, if you don’t like change, you’re going to hate bankruptcy.”
