Case Study: Banana Republic uses lookalike audiences to find best shoppers
When Banana Republic opened its doors in 1978, it quickly grew into a global brand set on making and keeping modern professionals stylish. Dedicated to helping customers achieve both professionally and personally, the company offers versatile apparel that can be styled for virtually any occasion.
While Banana Republic’s customer base is loyal, it is also aging. The company’s goal was to reach a younger demographic that would be new to the brand. It also hoped to increase its return on ad spend during the competitive holiday season. Custom audiences looked like the perfect tool to help Banana Republic find its current customers on Facebook. Lookalike audiences helped the retail chain expand its reach by finding new shoppers with attributes similar to its younger customers.
Banana Republic decided to target its top customers. It had seen success with online retargeting programs in the past, but it hadn’t launched a pure online acquisition campaign to reach customers new to the brand. The campaign ran from Nov. 13, 2013, to early January 2014.
The company determined that Facebook was the ideal platform to assist it with reaching holiday shoppers.
To execute the campaign, the retailer worked with Booyah! Advertising, a digital performance-based agency, along with its internal e-commerce, creative, customer-relationship management, measurement and brand teams.
The teams’ collaboration allowed the company to identify characteristics of consumers who were more likely to buy more from them.
To reach the right people during the holiday season, Banana Republic used custom audiences and divided its customers into various segments:
- Lapsed: those who had not purchased from Banana Republic in the past 12 months, but who had purchased at least twice in the 12 months prior;
- Prospects: those who had never purchased from Banana Republic, yet were on Banana Republic’s email list; and
- Top tier: those who had spent over a designated threshold in the past 12 months.
- Lookalike audiences: Lookalike audiences allowed the retailer to create a target audience of people who may not have purchased from Banana Republic before, but had attributes and online behaviors similar to the retailer’s top tier customers.
The company also leveraged Facebook’s native keyword targeting capabilities to reach women who liked fashion, media and travel. To drive additional holiday sales, the retailer presented each of its custom audiences with tailored offers.
The campaign tested various creative within the ads and targeted several different segments of male and female shoppers. The advertising team also carefully measured each ad set to see which messages and images drove higher click-through rates. The team found that:
- Placing the Banana Republic logo at the top of ads increased visibility and drove more conversions;
- Winter wear images delivered more engagement than festive holiday clothes;
- For images, product close-ups performed better than models; and
- Action-oriented calls to action, such as “GET THE LOOK,” drove higher click-through rates than more passive copy, such as “Dressed to celebrate.”
In the end, the campaign was a success.
Banana Republic received a nearly four times return on its ad spend than other display advertising channels. And Facebook became the company’s top-performing channel for new customer acquisition during the holiday season.
Perhaps the clincher: The retailer had a 60 percent higher click-through rate using Facebook lookalikes compared to other display media.