Market Overview

Facebook Gamble Pays Big for Fashion Retailer


blue sky co. – an online luxury retailer of medical fashion with a designer twist– is a lot like many companies that derives sales from the Internet. The company is always seeking to optimize its marketing mix and dollars in an ongoing effort to more effectively reach new customers and grow its market share.

Traditionally, the company's marketing efforts have centered on a two-prong approach, which includes creating content and optimizing pages to capture “natural” search results when users enter a search query. And the second is setting up and maintaining Google ad words campaigns around its customer searches. As in any worthwhile industry, there are lots of manufacturers, distributors and other players in the uniform market. The company definitely has a unique product mix and market position, but it takes constant effort to keep gaining market share in the multi billion dollar industry.

Recently, David Marquardt, the company's co-founder, added another arrow to his marketing quiver – Facebook. Like many companies, uses the mammoth social network for viral marketing. But Marquardt says it's Facebook's ad program that has made a huge difference in his business.

Traditional industry logic says that social networks are not such a great ad buy because people go to Facebook to socialize, not buy products. Marquardt says this is a flawed notion and it's precisely because Facebook has so much data about its users that makes it easier to deliver targeted ads to his potential customers.

“We were skeptical at first in using the Facebook network for ad delivery,” said Marquardt. “But the results are irrefutable. We've found we get more traffic from Facebook ads than with ad words, the costs are much lower and we are reaching our real targets and converting them to customers.”

And the company's numbers tell the story. This year with Facebook in the marketing mix, reach is up 318 percent, people talking about this is up 1,200 percent and finally sales are up about 48 percent.

Google and Facebook employ different methodologies for delivering relevant ads to users. Google uses a somewhat opaque process, where users bid for keywords their ads will show up around in relevant search queries. Facebook, on the other hand, uses a system called “Open Graph”, which includes a user's profile data as well as actions he or she takes within the system. These include “likes”, “shares” and other information users divulge about themselves in the network.

For Marquardt and blue sky co., it's a formula that seems to be paying off.

“We've come to believe that social ad placement is a much better solution for small e-commerce businesses,” says Marquardt. “It's targeted, costs much less and gets our message to the right people. I can't thank Facebook enough for the power editor.”

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for blue sky co.
Andrea Mueller, 512-296-3425

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