eBags Goes from Demographics To Psychographics

ebagsInstead of investing $25,000 to create a couple of different marketing segments, online luggage retailer eBags wants to invest only a couple thousand to create about 50 different segments.

It’s part of eBags’ move from demographics to psychographics, one of many ways it’s refining its approach to digital advertising.

Around since the dot-com boom and bust, the privately held company does not release sales data, but Internet Retailer puts the company in the upper half of its top 500 e-tailers and estimates its sales in the nine-digit range.

“We’ve been corrupted by personas and segmentation,” eBags President Rob Cassidy told AdExchanger at the NRF’s Big Show. “If you love to travel, you can be any gender and any age.”

EBags examines all the customer data it collects to create microsegments. For instance, if the phrase “study abroad” commonly appears in reviews of a certain product, eBags will create and target ads on Facebook or through the Google Display network specifically for consumers interested in studying abroad.

“We will go after the users that are within those psychographics, as well as, say, people who could be traveling to Europe,” explained digital marketing director Chris Seahorn.

“It’s no longer who is shopping you, it’s why, and what matters to them,” Cassidy said. Going forward, eBags will continue to invest in ways to parse unstructured data sets.

Even when eBags buys offline advertising, it tests the messaging and targeting online first (90% of its marketing spend is on digital).

But as traditional media adopts digital techniques, eBags is exploring testing on cable television later this year. While the company used to buy spots on sitcoms like “Seinfeld” and “Friends,” it’s not thinking of returning.

“Those days are over,” Seahorn said. “We’ll buy millions of impressions, but in a targeted way, not roadblock for DMAs, but get down to ZIP code level or to one user.”

Most of eBags’ advertising is direct-response, so it isn’t migrating spend back to TV as much as it is trying to target video audiences.

“TV is really video, and you can reach users with video in many different mediums: YouTube, Facebook, Twitter and now with cable TV,” Seahorn said. “By taking video into a more digital marketing mindset, we can reach audiences in a very targeted way."

Facebook, with its ability to create highly targeted campaigns by drawing on its 200 million monthly active users in the US, is “one of the fastest-growing channels” for eBags, Seahorn said.

It runs and optimizes its own Facebook campaigns, and has some help from partners like Tell Apart. Much of eBags’ success is through lookalike modeling, loading up data like “top purchasers over back-to-school season.”

The retailer’s tests with Twitter, though ongoing, don’t show the same strong results. That’s partly from differences in the two platforms, Seahorn said, but it also speaks to the team’s finite resources: Since fewer dollars flow through Twitter, it doesn’t get the same attention that Facebook does.

Measuring success between different campaigns and channels requires constant monitoring.

“Attribution is not something new, it’s just becoming more complicated,” Seahorn said. EBags buyers generally see 2.8 marketing sources, which could include email, search engine or display ads, before they make a purchase. The company built technology internally on its business intelligence tool in order to show the impact of attribution across its entire portfolio.

It wants to make attribution fair: Coupon sites, for example, tend to be biased toward last-click attribution, which eBags takes into account. In addition to its own internal attribution tool, it looks at sources like Google and Facebook to see their attribution data. View-through conversions get weight, especially for ads in “disruptive” formats like the Facebook news feed, Seahorn said.

While eBags doesn’t spend much on mobile advertising it is investing in its mobile site, largely because of traffic it sees through mobile email.

“Mobile more than anything brought email advertising back,” Cassidy said. “People check their phones first thing in the morning. There is a lot of timeslotting in mobile, [so] when you send the emails, that matters.”

In the year ahead, eBags will put more effort into creating affinity segments and spending against them, paving the way for another end-of-year spike in sales.

“Everything is shifting toward lifetime value and frequency,” Cassidy said. “You have to make investments earlier in the year. If you’re looking for new customers just in Q4, that’s a long, hard road.”

 

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