Frank & Oak puts its own spin on programmatic video

Working with SourceKnowledge, e-tailer creates hybrid brand/DR campaign

With online marketing, Frank & Oak likes to play its cards close to the chest. As an up-and-coming retailer with a focus on data and customer relationships, it doesn’t have a lot of margin to push at mass TV campaigns – but what advertising it does do, goes a very long way.

With deep roots in e-commerce, the core of Frank & Oak’s marketing has always been lead generation and acquisition through performance-oriented channels like search, paid social and retargeting. But it’s also built a strong brand as one of Canada’s hippest menswear stores. In fact, Frank & Oak CEO Ethan Song has come to realize that the strongest tool he has to drive success in direct marketing is actually the brand itself.

Brand ads drive sales, he says — not indirectly through some vague potential purchase at some point in the future, but with actual clicks and dollars spent.

“We just realized that what was powerful for us was the brand,” he says.

So Frank & Oak has been looking for ways to combine brand advertising and digital direct response tactics. “We’ve been looking for channels where we can be as targeted as search or banner ads, but with more of a brand feel and taste.”

Online video fits the bill; it lets Frank & Oak tell a brand story, but with the targeting and measurement that have proven so successful in display advertising. Video blurs the distinction between branding and direct response. It lets Frank & Oak be “more three-dimensional,” Song says.

Over the past six months, the retailer has been experimenting with targeted video advertising through performance ad networks, as well as programmatic and organic social. The team produces its own creative (see below) and runs it on YouTube, Instagram and other video platforms.

In programmatic, it works directly with Montreal-based demand side platform SourceKnowledge to plan and execute campaigns. That puts it at the leading edge of the trend in small and mid-size businesses working directly with programmatic vendors, rather than going through an agency or trading desk.

Online pre-roll video, like TV, is dominated by brand awareness and perception campaigns, and that’s what SourceKnowledge has mostly worked on. But Frank & Oak negotiated with the provider to launch a pay-per-acquisition video campaign, the first that SourceKnowledge has done.

Patrick Hopf, CEO of SourceKnowledge, said its client base has typically been North American agencies buying programmatic video on television metrics. But despite the growing demand for premium, brand-quality ad space online – and the large number of digital video vendors looking to draw budgets away from TV – a good chunk of online marketing budgets are still focused on leads and acquisitions, and marketers are looking for ways to push their direct marketing further.

Hopf sees video as an opportunity to bridge the gap between branding and direct marketing. In Frank & Oak’s case, that was accomplished by delivering a brand narrative to a target audience of millennial males, and then working to drive engagement with a range of DR tactics, like retargeting and lookalike modeling. Rather than paying based on CPM, Frank & Oak paid only when a visitor clicked through an ad and filled out a style profile on its site.

One of the collateral benefits of pay-for-performance programmatic is that optimizing towards desired user actions tends to reduce wasted spend on low-viewability sites or botnet fraud. Since ads that aren’t seen can’t drive conversions, and bots don’t know how to fill out a style questionnaire, SourceKnowledge’s optimization algorithms will automatically screen out sellers and sites with ad quality issues.

And of course, there’s the cost-efficiency angle — Frank & Oak only pays for ads that have real, tangible ROI, not scads of impressions that may or may not have been seen by real people.

The benefits of optimizing towards deep engagement have long been understood by DR advertisers in display. But it’s not a tactic often applied in premium pre-roll video, where the trend is to measure and price inventory the same way it’s done in TV, based on ratings points or gross impressions. Sometimes that’s because the advertiser doesn’t have an obvious conversion metric to optimize towards, the way e-commerce companies do. But in general, the thinking is that online video ads, like digital ads, succeed or fail based on how many viewers see the message, not how many of them react to it.

The accepted wisdom that digital video is like TV, and needs to be measured like TV, doesn’t hold much sway with Song. “Digital video is very different than TV,” he said. “You can still apply some of the same formulas [from direct marketing] when it comes to clickthroughs and cost per lead, and you can apply more narrow targeting – so that even though it’s video, it’s not for everyone, it’s for a very specific segment.”

“The web and television, they’re completely two different species,” said Hopf. “They have different attributes. I’ve never been able to fathom comparing one against the other.”

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