Advertising Can Only Take You So Far

CAN ONLY TAKE YOU SO FAR

Interview with Joe Walter and Terry Fetterman

This installment in Furniture World’s series on retail advertising features information and advice from Terry Fetterman and Joe Walter of Tango Multimedia. Their ad agency works with independent family-owned stores with sales in the $3 million to $20+ million range.

Fetterman spent the first two-thirds of his career working for companies such as Radius Communications, Comcast and Viacom-owned CBS in TV advertising and video production sales, management and direct response.

“Before founding Tango,” he recalled, “I also worked for a technology company as director of sales on the operational side of broadcast television and early streaming media services.

Joe Walter met Terry years ago following a disappointing experience with a TV ad buy he made while working at his family’s furniture operation, Highland Park Furniture.

“One Black Friday weekend,” he recalled, “We invested heavily in TV ads to bring in customers.

“The spots were a complete failure. It was our first substantial investment in television advertising, and we were unable to tie any business directly to the promotion.

“Our print supplier, Banner Marketing, suggested that I speak to Terry before doing more television marketing. Terry immediately spotted the flaws in our campaign and suggested a thoughtful, well-designed plan. As it turned out, my dad, who owned Highland Park Furniture, said, ‘As long as I live, I’ll never run another television ad! It doesn’t matter how good the plan is. We spent our lifetime supply of TV money on that last campaign.’ So, Terry, and I just remained friends. Over a number of years, I developed expertise in digital ad management as an effective means of advertising our stores, which ultimately led me to join Tango as VP of Online Advertising.”

New Advertising Conversation

“It’s not news to most Furniture World readers that access to data allows retailers to create audiences based on data, track impressions and clicks,” explained Fetterman. “Today, they can measure the number of people who were served an ad, walked into a store and purchased.

“These analytics have fundamentally changed the conversation retailers and their ad agencies should be having. Instead of being concerned with just marketing and branding, advertising decision-making is increasingly connected with how retailers buy, merchandise and sell their products.

“Here’s an example. We recently worked with a large retailer whose brand message emphasized selling products for less than the competition. It was and is a major pillar of their brand.

Note: Respondents who did not give an answer are not shown. Source: Survey of U.S. adults conducted Jan. 25-Feb 8, 2021. PEW Research Center.

“When customers were asked to share their impressions about this retailer, they explained that the operation delivered an excellent shopping experience and were impressed with the employees, product quality and selection. All good things.

“This retailer’s everyday prices were, in fact, lower than their competitors’. Customers, however, believed the opposite. How was this possible?

“To correct a mismatch like this takes more than just working with an ad agency to place clever ads. The shopping experience needs to be re-aligned. For example, it could be that when shoppers walked into this retailer’s stores and turned right, they saw a selection of higher-end items. If a $12,000 sofa is the first thing shoppers see, it makes an impression. Multiply this by 1,000 and it can become a problem.

“Just moving a display from the front to the back of a store can have a large effect over time,” noted Fetterman. “And there are many non-advertising factors like this in retail operations that contribute to a disconnect between a retailer’s advertised brand and the experience people have of that brand. Advertising and marketing have become much more comprehensive and holistic. It needs to be part of any discussion between retailers and their advertising agencies.”

Video Shift

On the topic of media choices, Joe Walter noted that “the conversation about television advertising has shifted quite a bit in the past few years due to the importance of reaching people with video.”

“That’s certainly been the case,” agreed Fetterman. Video has become the number one source of information for 66 percent of all adults. The TV budgets we’re managing are shrinking as YouTube and Facebook video advertising, OTT, CTV and streaming video have grown.

“Even today, some retailers are handling advertising themselves. They accept the packages offered to them by television, radio and newspaper ad reps. This is not the best way to optimize an advertising budget. What advertising reps say is not always the best advice for home furnishings retailers.

“In 2015,” Fetterman continued, “76 percent of adults watched TV from cable or satellite. Today, that number has dropped to 56 percent. While it’s still a lot of people, media consumption habits continue to shift.

“Often, furniture stores use broadcast TV—a combination of ABC, NBC, CBS and FOX. In any market, one or two stations dominate the local news and furniture stores choose those stations to carry the majority of their network television placements. Many store owners believe that their customers don’t watch cable TV anymore.

“They place commercials from five in the morning until six at night during the early news, the evening news, occasionally on late-night news and sometimes on entertainment shows like Kimmel and Fallon. Unfortunately, most TV viewership is not during those time slots. It’s in prime time.”

Fetterman said that local furniture stores typically can’t afford prime time, but that isn’t a huge problem because they can still reach people before they leave for work, then again when they return home, through local news programming. “On paper, it all sounds good. The problem is that including travel time, most potential customers leave home at 7 a.m. and return at 6 p.m.. Retailers are sometimes well served by reducing their broadcast budget a bit and adding cable TV in primetime when people are watching CNN, Fox News and MSNBC. Advertise on those three news channels from 6 p.m. until midnight. Every single furniture store can afford to do that to better reach folks who work during the day.”

Digital Decision Making

Furniture World asked Joe Walter about current best practices for digital advertising.

About Google: “Google is foundational to any advertising program,” he said. “It is the place people go to first when they’re looking for furniture. When they’re interested in buying, retailers need their website to show up in that moment. It’s the modern equivalent of Yellow Pages advertising. Beyond Google, the market a retailer is in, its budget, and goals dictate what needs to happen next in terms of digital advertising.”

About Geofencing: "For some retailers, geofencing makes a lot of sense for a similar reason. It’s a way to effectively communicate with active shoppers. Even during the pandemic when closing ratios were as high as 50 percent or more, there were still lots of consumers who walked out of stores without buying. So, it makes sense for retailers to direct resources to try to get their shoppers and those consumers who visited competitive stores to come in and complete a purchase.”

About Competitors: “It’s a mistake to blindly copy competitive stores’ advertising choices. For example, it’s easy for a retailer to assume that an Ashley Furniture Home Store operating in its market area wouldn’t place so much TV advertising if it wasn’t working. For a retailer with a modest advertising budget, however, television is often not the best way to go. It’s important to be aware of what competitors are doing in terms of their media choices, but it’s impossible to compete simply by copying large competitors.”

About Website Development: “Over the past two years, many retailers have been patting themselves on the back for finally paying some attention to their websites. But, there are still a large number of furniture store websites that underperform.

“Retailers may spend huge sums on rent, salespeople and displays to support physical locations. At the same time, they tend to shortchange their websites. If a shopper’s first impression, based on a website experience is poor, she probably won’t consider an in-store visit. When that happens, investments in physical locations are wasted.”

Content

Walter suggested that Furniture World readers who settle for just uploading information provided by their manufacturers are unlikely to inspire shoppers.

“Over much of the last two years, it’s been a sellers’ market for a lot of retailers who’ve been able to cut their ad budgets.” Rather than pocketing that savings, he said, they should fund content creation. Whether they hire an influencer, post TikTok videos or photograph beautiful in-store vignettes to replace cookie-cutter manufacturers’ supplied photos, it’s worth the effort.

“Smart retailers are creating how-to and design videos. There are many ways stores can build rapport with customers and provide an alternative to scrolling through sofa images and boilerplate copy about great customer service and how many years they’ve been in business.

“Most retailers know that they need to create better content. Often though, that’s where the discussion ends. Store owners hardly have the time to take care of basic things like hiring, payroll and placing orders, much less brainstorming about what kinds of blog posts to write.

”The good news for retailers is that platforms such as TikTok and Snapchat have changed the threshold for what’s considered entertainment. Our customers have become used to low-fidelity content, so compelling social media messaging no longer requires fantastic high-resolution images or professional videography.”

Retailers who visit TikTok can see thousands of submissions from top-100 to small independent retailers. A quick search for the phrase “furniture store” reveals content that ranges from useful information to playful clips featuring furniture store employees and customers. “Mrs. Jones came in and bought a sleeper sofa. Why? That can be your piece of content,” observed Walter. “Or, a salesperson on-camera can talk about how happy a recent customer was when she solved her back problem with an adjustable bed.

“Stories are being continually created inside stores. They are almost like video diaries that don’t have to be accompanied by grand explanations or pitch the next big sale event. But not everyone is capable of creating persuasive content. I would caution retailers against choosing the youngest person they know to be their social media and website content person, ”advised Walter. “Just because an intern or junior employee is using Instagram all the time, it does not mean that they are qualified to control something as important as a retailer’s social media communications.”

The good news for retailers
is that platforms such as TikTok and Snapchat have changed the threshold for what’s considered entertainment. Our customers are used to low-fidelity content now."

Smart Solutions

Fetterman remarked, “There will always be challenges as well as opportunities for furniture stores. In good times and bad, some retailers find reasons based on current business conditions, the news cycle, or a collective mindset to cut back on advertising.

“Before making big advertising decisions, it’s wise to take a step back and ask a few questions. ‘How do we improve today so we can grow? How do we develop better business and brand focus? How can we reflect our unique branding via in-store shopping experiences? How might we extend this experience outwardly through our online and social presence?

“Good decision making requires leveraging data, but, many stores don’t know how many households there are within 10 miles of their operation. Neither are they aware of what those homes look like, the demographics and geographics of the families that live in them or their occupants’ style preferences.

“We recently worked on a campaign targeting roughly 330,000 women with household incomes of at least $60,000 in a retailer’s trading area. These women had an interest in home furnishings, decorating and home improvement.

“Here’s some context. The typical U.S. household purchases, on average, $1,900 to $2,300 on home furnishings a year. A quick calculation using an average yearly spend of $2,000 multiplied by 330,000 households told us that the targeted group was likely to spend in the neighborhood of $660 million on home furnishings during a one year period.

“The media this retailer used to reach this audience included targeted ads served via paid social advertising, online advertising, programmatic, video marketing, OTT, YouTube and print. Impressions, clicks and how many people from the targeted group entered the store and purchased were captured. This retailer generated more than $820,000 In sales on a $55,000 ad spend.

“People used to say, ‘Man, if I knew which half of my advertising worked, and which didn’t, I’d be a genius. Today, retailers can have that information. It doesn’t matter if a retailer can invest $100,000 on an advertising campaign or just $2,000. An insightful in-house marketing team or ad agency can create an articulated advertising program that is responsive, data-driven, filled with analytics and market intelligence. But, great advertising can only take a retailer so far. It has to be accompanied by looking closely at what’s happening when shoppers targeted by ads visit a store.

“That’s why it’s so important for furniture retailers to have conversations with their agencies or marketing teams about how consumers interact with their websites and in-store experiences. These can be incredibly productive conversations.”