Old Navy Goes Newly Native

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TaylorBuxOldNavyWhether or not you think native advertising is all buzz and no bite, one thing is clear: Banner ads have a less than a 1% click-through rate, which means many brand advertisers are on the lookout for a new solution.

Retailer Old Navy, whose predominantly teen audience would most certainly roll its collective eyes at a performance-based banner, is looking to take advantage of the native trend. Then again, anything marked “Sponsored” would probably get the same reaction. A recent joint study conducted by DigitasLBi, Razorfish, Tumblr and Yahoo found that 45% of millennials couldn’t care less about brand content.

That’s part of the reason why image-based social network We Heart It recently launched its own native advertising pilot program. While you might not have heard of We Heart It before, the service has an active combined desktop/mobile user base of nearly 30 million and generates about 4.5 billion page views monthly. Of the roughly 1 million new users We Heart It adds each month, roughly 75 to 80% are on mobile, said company President Dave Williams.

We Heart It users, mostly teen girls, share quite a lot of brand imagery on their own steam – generally clothes, shoes, accessories and fashion items – without the brand’s knowledge or participation. Brands are popular with this demographic. Branded content isn’t.

That’s why participants in the We Heart It native program, which, in addition to Old Navy, includes Hollister and JCPenney, package their content to look just like organic posts. The only difference is that they appear slightly larger than other images in-stream. The theory is that earned impressions will balloon off the back of paid promotion impressions driven by the actions of users who share the images with their personal networks.

But what about the ROI? Dollar bills, y’all. For Old Navy, which is also working with Pinterest on its native advertising initiative, tracking conversions off native is a next step.

In the words of Taylor Bux, Old Navy’s director of digital and social innovation: “The focus for us right now is on getting the initial customer engagement piece correct and reaching a wide audience before moving into commercial tracking.”

Bux chatted with AdExchanger about Old Navy’s native (which we dare you to say five times fast).

AdExchanger: What kind of research did you do before jumping into native?

TAYLOR BUX: A mandate for us, certainly as of late, has been to try and be as innovative as possible when it comes to using new technology and platforms. That’s why we started focusing on new forums to established ourselves on and grow our audience. Pinterest and We Heart It fell into this category for us. They came to us with their proposals and we looked into the potential opportunities for us regarding their demographics and reach and how that would relate to our target audience. We also looked at benchmarks to see how we were performing with traditional banner ads so we could compare those numbers with what we’d see with native.

What is Old Navy’s target demographic?

We have two primary audiences. Our top priority is millennials, and with them we focus on digital marketing. But we also have a portion of our audience that skews slightly older. They’re still a big part of our business and we also need to be speaking with them in a way that’s relevant. Pinterest sits somewhere in between those two, whereas We Heart It skews younger. Overall, we’re looking to reach a younger audience that will eventually have more purchasing power later on.

WeHeartItWhat is Old Navy trying to accomplish with its foray into native?

In the most fundamental sense, we’re looking to add value to the customer experience, and in the social setting that can mean a lot of different things. For us, it’s always going to mean approaching content from a creative perspective with a sense of fun. As far as native, we’re trying to do it in an organic way that gives our customers a reason to engage and share.

How are you tracking native results?

Our focus at this stage is at the top end of the funnel looking at awareness and engagement. Eventually we’re going to look further down the funnel as the social channel grows closer to ecommerce, and we’ll think more about conversions in terms of site visits and sales. That’s a step or two ahead, but it’s the direction we’re going in. I can’t share specific numbers, but I can say that we see the same promise in native as everyone else does and we are taking a very measured approach. We’re beta testing to select the right partners and the right mix. We’re taking this one step at a time.

Would you say native is like a bridge between social and commerce for you?

It’s an interesting question. I wouldn’t say it’s a bridge necessarily, but it certainly is one of the many tools we could employ to do that. I don’t think we’ll ever focus entirely on one thing or the other. Organic and earned channels will continue to be important for us, as will our influencer relationships. Native ads help us complement what’s happening in the traditional space.

How so?

Whenever we approach a campaign, we try to create content and experiences that blend offline with online. One example that comes to mind is the work we did at Coachella. We worked with influencers and bloggers on-site to create and share content with our audience that couldn’t be there. We also had clothes that people could purchase using social currency. If you liked a certain shirt, for example, you could tweet about it and we would give it to you.

What kind of data are you using to inform your native strategy?

One of the benefits of having a close relationship with Pinterest and We Heart It is that we can A/B test creative to determine what will resonate and what won’t. These platforms have different audiences, so an approach that works on one might not work on the other. We’re working to find the right blend of creative and then supporting it with native investment.

What would be an example of that?

Let’s look at Twitter, where we’re do something similar, although it’s not native in the traditional sense. We put content in the hands of influencers, white label it, and then put marketing dollars behind it. Basically, we have a portfolio of different influencers we work with on a regular basis, mainly fashion bloggers. When content about our brand is white labeled, they’re the ones posting it, but we’re able to put media dollars behind those posts so that they pop up in relevant environments across Twitter.

Where will Old Navy be concentrating its digital media spend down the line?

Right now we’re really focused on trying to evaluate the performance of native. It’s a fairly new enterprise for us and we’re excited to see where it leads. Hopefully it will fulfill the promise it has now. In the long-term, we’re seeing the convergence of social and digital with mobile, and marketing dollars will shift accordingly.

Our goal with native is the awareness piece of it. We want the content we’re putting out there to be something people actually want to engage with and share. Ultimately, our social channels will get closer to Old Navy online and to ecommerce. We could potentially move in that direction with native, but native is just one tool in a tool chest for us.

Speaking of tools in the tool chest, are you doing anything in the programmatic space?

We’ve done programmatic buys in the past through our media team, although it was very minimal and mostly just banner ads. We haven’t done programmatic for native. The cost efficiencies that come with programmatic and the level of targeting that those platforms provide could potentially be compelling for us in the future, but as of right now it’s not something we’re doing.

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