Why Jet.com spends 10 percent of its ad money on mobile

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Jet.com’s founder Marc Lore said during an Advertising Week panel Monday that his e-commerce startup differentiates from Amazon by appealing to millennials. To raise brand awareness, however, the company has been pouring 90 percent of its ad spend into digital, TV, out-of-home and direct mail. Missing from that majority is mobile ad spend, which takes up about 10 percent of Jet.com’s budget.

The retailer, which sells consumer goods at a low cost in exchange for a $50 annual membership fee, raised $220 million in funding before it launched in July. Now, Lore said, the company is spending $5 million a week on advertising, with about $500,000 going to mobile. Lore said that TV, print and direct mail may not turn out immediate results but have “long-tail” benefits.

It’s surprising that, for a millennial-minded company, Jet.com would forego the mobile-first approach. A new study by IAB found that mobile is the best platform for marketers trying to reach college students, which are younger millennials and Generation Z. Twenty-eight percent of those surveyed said they were most likely to see relevant ads on their smartphones, compared to 22 percent of overall smartphone users.

Lore said that right now, Jet.com’s mobile app isn’t up to par for a big advertising push on the platform. He added that mobile is just one piece of Jet.com’s experience, and that in retail, it shouldn’t be the primary focus.

“People shop on a variety of platforms, so we’re looking for complete ubiquity across platforms,” said Lore during the panel, titled “Designing a Business for the New Consumer,” on which he appeared alongside mobile marketing firm Fetch’s founder, James Connelly.

“You want to be everywhere the consumer is,” Lore continued. “Retailers shouldn’t focus on just mobile —  it should be a seamless experience with continuity across platforms.”

Connelly said that brands that come to Fetch most often need help translating their marketing for mobile, and tracking attribution and performance. According to Connelly, the most nimble and fast-growing brands are those that can grasp the importance of the platform.

“Brands need to understand the value of a mobile consumer, and it’s the mobile-first businesses that best understand the unique behavior of that consumer,” said Connelly.

Lore said in a previous conversation with Digiday that in the next 12 months, Jet.com’s plan is to devote $100 million (nearly half of what the company has raised in funding) to advertising, with a “big focus on TV, outdoor advertising, direct mail and online display.” Recently, Jet.com did a homepage takeover with Yahoo and a series of quickly churned-out videos that celebrated even the smallest of Jet.com savings and purchases as they happened. Lore said that in the next three months, more of the company’s ad spend will go to mobile but didn’t specify how much the percentage would increase.

“We have a big ad budget, and we’re out to prove that in retail, it’s not winner takes all,” said Lore, referring to Jet’s massive competitor: Amazon.

https://digiday.com/?p=138070

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