LOOKFANTASTIC revolutionises paid search strategy with LiveRamp's insight

How UK’s ultimate beauty shop, LOOKFANTASTIC, developed an optimised suppression strategy to generate a 7-figure incremental revenue lift per annum 

  • 1.74%

    Total incremental revenue lift

  • 7x

    Return on investment

  • 10

    Days to revolutionise PCC strategy

Challenge

LOOKFANTASTIC is Europe’s #1 online premium beauty retailer, carrying over 22,000 products from 660 premium brands. They are driven by a desire to create brilliant customer experiences internationally, built from insight and data derived from integrated technology and expertise.

Being exclusively an online retailer, and a firm ‘millennial’ favourite, LOOKFANTASTIC rely heavily on digital media to deliver users to their site and discover their beauty needs. As a result, they are always looking for ways to improve engagement whilst keeping a firm eye on media spend to drive the efficiencies. 

A good proportion of their digital media budget goes into paid search, so that they are front and centre when people are in the mindset to buy particular beauty related products. However, with loyalty reward programmes in place such as LF Beauty Plus+, LOOKFANTASTIC wanted to focus their advertising strategy purely on customer acquisition. To confirm this was the right course of action, they looked to test a strategy that excluded all current customers that had made a purchase within the last 12 months from their paid search spend. This strategy was built based on brand loyalty quantitative research rather than actual customer behaviour, as they didn’t have the tech or methodology to measure this accurately. 

LOOKFANTASTIC’s parent company, THG Ingenuity, had recently partnered with data collaboration platform, LiveRamp, to power data collaboration between brands, unlocking better management, activation and measurement. The team at LOOKFANTASTIC were amongst the first of THG brands to engage with LiveRamp to test out their paid search suppression hypothesis. 

Solution

LOOKFANTASTIC worked with LiveRamp’s data science team to develop a methodology whereby they could measure the effect on sales of suppressing existing customers from paid search.

They ran a control group based on existing customers who were exposed to paid search ads, and measured against those who were suppressed. The criteria used was customers who had bought from LOOKFANTASTIC in the previous 12 months;

  • Just once
  • Between two and five times
  • More than five times

The search campaign was run on a pay per click basis, and ran for 10 days over April and May 2023. 

The findings of embarking on a data driven strategy were astonishing.

 

LiveRamp has given us both the ability to implement cost reduction mechanics and drive incremental growth in both a new and existing customer acquisition standpoint, providing powerful first party data segmentation for usage across a variety of Paid Media platforms.
Christopher Stanton, Group Head,
THG Group

Results

It took a test budget media and measurement cost of £20k and just 10 days to unlock the insight that will determine a 1.74% overall incremental revenue lift, equating to a projected seven figures over 12 months.

Using LiveRamp’s Data Collaboration platform, LOOKFANTASTIC discovered that although significant media savings were made through the existing blanket customer suppression strategy, switching to a stepped approach would significantly increase sales. 

Looking at each of the 3 segments with the test and control group, LiveRamp determined that;

x4.4 ROI was achieved for groups that purchased ‘once’ and ‘two-five’

By releasing paid search budget to capture both the ‘purchased once’ and the ‘purchased two-five’ groups, LOOKFANTASTIC would drive 1.74% incremental revenue lift equating to seven figures over 12 months, and achieve an ROI of x4.4, therefore recommended to include within paid search activity

x7.2 return on investment for biggest incremental revenue group of ‘two-five’

In particular, there should be a focus on targeting customers who purchased between two-five products in the last year, driving an ROI of x7.2

Moving Forward

  • LOOKFANTASTIC should continue to suppress paid search budgets to the five-plus group, as there wasn’t a significant impact on customer purchase to make spend worthwhile. 
  • Instead, there should be a focus on converting the two-five segment into loyal customers, preferably those to join the LF Beauty+ program to drive marketing effectiveness

LiveRamp deliberately recommended dates where LOOKFANTASTIC were likely to see regular spend patterns, therefore the revenue figure seen is conservative – once ‘sales events’ such as Black Friday, Cyber Monday, Christmas and Mothers Day are taken into account, incremental revenue and ROS will be predicted to be much higher.

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