What if someone talked you into buying a mattress without letting you lie on it first? That’s exactly what online-only mattress startup Casper is doing.
Casper wants to use the strength of its reviews and website (along with its generous return policy) to convince people to go from online research to unpacking a bed in a box.
Since its founding 10 months ago, Casper has dramatically increased its digital spend.
Scaling up that marketing spend to reach more potential customers poses a challenge for CEO and co-founder Philip Krim, who brings an ecommerce background to his role.
“It’s easy to spend a little bit of money in any channel and make it work,” said Krim. “It’s hard to spend a lot of money in a specific channel and make it work.”
Its top channels include search, display and paid social, but it’s also experimented with other tactics, like amplifying earned media using Outbrain and Taboola, and layering that with call-to-action tool Snip.ly.
While it’s easy to find efficiencies in platforms by focusing on the long tail – less popular search terms, for example – that gets harder as the brand moves into more competitive spaces. “We’re proud that we’ve been able to grow our spend and see CPAs drop and ROI go up even when we’re increasing budgets dramatically,” Krim said.
Krim talked to AdExchanger about what Casper has learned about its customers and where on the Internet its marketing team is finding them.
AdExchanger: Who is the Casper customer, and how are you trying to reach that customer?
PHILIP KRIM: Mattresses are a universally needed product. We’ve sold mattresses to people between 18-80, and have customers who have written testimonials who are in their 70s and 80s. The demo that’s been the strongest is different than what we expected. When we launched, we thought it would be targeted to people in their 20s, millennials. We’ve seen it’s people in their 30s, who want to invest in getting the best mattress they can.
What have you found out about when people buy mattresses? Is it when they move?
We spent a ton of time getting in front of people who are moving. We learned that while moving was certainly a need for a lot of people, it wasn’t the primary driver. The idea of upgrading sleep, and getting a better night of sleep, was much more popular than moving. And it was appealing to people who weren’t actively shopping for a mattresses. We’ve changed our focus away from “needing a new mattress” and to “upgrade your life.”
What’s the role of traditional display media in your plan?
Display is tough. We’ve tested a bunch, and it’s been really hard to make it work. We’re looking at different attribution modeling programs to see if it’s a bigger driver, but we just cut the budget for display in favor of paid social.
Why increase paid social?
On Facebook we’re starting to see a lot of success. It takes a lot of budget and time to test, but we’re starting to see it’s working, and still working, as we get it to scale.
A lot of testing on Facebook is about audience segmentation: who to talk to and what creative to show to that audience. A lot of times you need decent sample sizes to know if it’s working or not, and decent sample sizes cost money.
What was your experience with Facebook Custom Audiences?
It helped. It wasn’t the panacea we hoped. We have a very diverse group of buyers, and because of that the lookalike data on our customer database was very varied.
Do you use an agency?
We use a hybrid model. We have a dozen marketing people who do all the different functions internally, and we do work closely with an agency. I was operating businesses where we turned over to an agency, but I felt like you didn’t get the level of granularity and minutiae you get when it’s in-house.
The hybrid model also allows you scale faster. It’s deploy quickly, test and be iterative with the right data, and allocating it to different budgets. It’s not about kicking over these million-dollar budgets and optimizing them.
Casper spends on content recommendation engines like Outbrain and Taboola, linking to articles that call you, for example, the “Warby Parker of Mattresses.”
We’re lucky that we had great press and earned media, and press converts very well for us. Those content remarketing channels are great for us to amplify what we know drives engagement. Most news coverage has a short life span. Content remarketing allows us to continue to amplify the pieces that drive good awareness of our efforts.
You’ve also experimented with a call-to-action overlay on those articles, a tool called Snip.ly. What’s behind that?
We’re big believers that in order to make a difference, you have to be early to a platform. Testing early and in a meaningful way: That’s where you get the most arbitrage between media cost and potential ROI.
What other platforms have you considered?
We see a ton of interest on Pinterest and Houzz. Those are underutilized by advertisers and can be meaningful traffic drivers because they have scale. Facebook is getting to that point where you have to spend a lot of money to make it work.
What are you doing on Houzz?
We by no means have figured out how to do Houzz well, but when you’re moving and redecorating your house, and one of the biggest sites is Houzz. The timing is right, but we’re still trying to figure out what kind of content will work. We also want to go after decorators and designers eventually [who are on Houzz], who buy a lot of mattresses for their clients.
What’s your data strategy? How have you applied it?
The first part is getting the analytics right, marrying Google Analytics to some of the conversion data so we can do attribution accurately, which is where we’re at now.
Where are you spending outside of digital?
We do endorsement radio on shows like Howard Stern, and we just did our first test with out-of-home on the [New York City] subway.
How does your ecommerce background help with this business?
People of all ages are going online to do research, but they aren’t buying mattresses online yet. The industry doesn’t want you to buy online. They want to bring you into the showroom, where the commissioned salesperson is trained to guide you to the most expensive mattress. You walk out of the store feeling ripped off. We wanted people to feel good about buying a mattress online, and you have to do that be being transparent, which is what we want to show people when they’re researching a mattress online.
