In 2019, some user acquisition professionals are spending less time on manual optimization thanks to advancements in machine learning and automation. Growth marketers have the opportunity to refocus their efforts on creative optimization. Beauty subscription brand IPSY takes this to the next level with their data-driven creative A/B testing tactics.
Tapjoy met with VP of Growth at IPSY, Alessandra Sales, to talk about how her digital marketing experience fed into IPSY’s love of tech and helped her succeed in the mobile marketplace.
I joined IPSY about a year ago as the VP of Growth, focusing on acquisition and advocacy. In marketing, “growth” is a nebulous objective, but my primary focus is acquiring new high-value subscribers. I strategize about brand building and top of funnel objectives, but I also work on reducing churn and converting users who don’t make it to the transaction stage. I also work with the team to promote the option to upgrade subscription packages among existing users. We have the Glam Bag, which is our classic subscription, and then we have two more products — the Glam Bag Plus and the Glam Bag Ultimate. Our team is cross-functional: We have engineers, product managers, creative designers, and UA managers.
In my previous roles, I marketed software and services, but now I am promoting a physical product. In general, the approach to brand marketing is pretty similar. We leverage similar channels. We are very strong with social because our demographic is skewed towards females.
Because we are selling physical products, the strategy is inherently different than that of software companies. Non-digital marketing tactics like direct mail can be very powerful. Branding is also critical because we exist in a crowded market. It’s very important to connect with new subscribers, but also to grow the power of the brand.
Video is the most successful ad format we employ. It’s particularly effective for direct response campaigns. We highlight real people from our community, and that resonates with our audience. Unboxing videos, bag reviews, and testimonials are very effective. Rewarded advertising that incentivizes certain actions or engagements works well.
Because it’s a subscription business, we have two major KPIs: Subscribers acquired every month and every quarter, and churn rates. We use machine learning to analyze our users’ risk of churning, and to segment users who might be ready to upgrade. Some users might have a better LTV upgrading, while others will have a higher LTV if they stay on the basic package. We also use this data to see how we ought to target them.
We A/B test at every opportunity. We do a lot of tests on social because it’s easy to test on Facebook and Instagram. Our campaigns are typically broad, and each ad set within that campaign has a specific creative theme. We select variants around messaging and visuals. For example, we may test variables such as copy, photography, music, and ad focus (i.e. product-focused vs. people-focused). All of our tests are hypothesis-based. These A/B tests are very rigorous, and IPSY is special in that sense. We have a team of 70 creatives who assist with growth initiatives.
The most valuable thing about digital marketing is that you can test at a fast pace and get results at a fast pace. Make sure that you have a robust data infrastructure to make the right decisions.
Data is what makes us different from other retailers and commerce companies. We make sure that both the product and the data is as good as it can get. We try to be as rigorous as possible in data collection and management, so that the data can guide us effectively. Like most D2C brands, we own the entire conversion funnel. We track everything from the moment they land on our page.
The primary way we increase subscriber LTV is by using machine learning to target users with the right push at the right moment in the funnel. We’ve found that the best way to increase user LTV and retention is by giving a personalized and delightful experience every month. We carry many different brands and products, and based on quiz presences and previous ratings we decide which products to send you.
Competition is the biggest challenge. When we compete in the mobile marketplace, we also go up against brands who are not our direct competitors. For example, fashion subscriptions become our competitors on mobile. In a mobile app campaign, my bid is also going up against a mobile game bid.
Developers are getting smarter. When I started working in marketing, there were a lot of manual optimizations made by the UA team. In the past, DR marketers were optimization freaks out of necessity. Now, thanks to advances in automation and signal optimization, we’ve freed up their day-to-day to focus on other non-analytical tasks. Facebook is following the automation trend, and soon 100% of the ecosystem will be doing the same. Because of these advances, marketing departments have become more multifaceted — instead of being made up exclusively of analytical types, there are often a few creatives in the room as well.
Even before I started working here, I was a big admirer of IPSY. I was a subscriber and I love their growth hacking strategies. For example, they introduced a waitlist, and there was this great referral program. That enabled the company to scale its user base when demand rose above fulfillment capabilities. People could get off the waitlist if they share how great IPSY is on social media. About 50% of users were using this trick, and they got the bag a few days after they subscribed instead of having to wait. We also created a strong influencer program in the early days. We have about 8,000 influencers that we work with in the US, and we have a stellar relationship with them. Our office in LA has four studios and we let influencers use them for free — that’s one of the perks of being an ambassador. We also host events throughout the US, and people respond really well to that.
Tapjoy would like to thank Alessandra Sales for taking the time to join us. For more insights from our Mobile Champions, check out our interview with Susan Borst, VP of the Interactive Advertising Bureau (IAB).