How SPOKE uses referral data to supercharge paid social
Tereza Pigova, International Growth Marketer at SPOKE, reveals how the menswear retailer turned Apple’s tracking changes into a golden opportunity.
Almost overnight, Apple’s iOS 14.5 update swept in, inviting consumers to opt out of tracking and severely damaging the effectiveness of general purchase data for lookalike audiences.
The retailer needed another way to reach target shoppers, fast.
SPOKE turned to two of its existing providers: paid social agency Nest Commerce and Referral Engineering® platform Mention Me.
“We were sitting on a wealth of first-party referral data,” recalls Tereza, who heads up international growth marketing at SPOKE.
“It made sense to inject that into our paid social strategy to see what would happen, especially since we knew referrers had higher lifetime value than the average customer.”
A week later, with the help and guidance of Nest Commerce and Mention Me, SPOKE was targeting audiences on Facebook who looked like customers who had referred friends to the brand.
"We're always trying to find innovative ways to target new audiences for our clients, especially as iOS 14.5 has provided fresh challenges when targeting new customers," explains Sarah Geoffrion, Head of Delivery at Nest Commerce.
"First-party referral data provided great potential to find customers for SPOKE and to get more value from the high-quality data they already have."
“Our hypothesis was that by finding referrer lookalikes on Facebook, we’d not only acquire high-quality customers, but that many of these new customers would go on to introduce their friends,” says Tereza.
“We were hoping to create a virtuous cycle of growth for our brand.”
Before long, the team’s hypothesis proved correct. Within days, it was acquiring new customers. Within weeks, these customers were introducing more new customers to the brand.
Six months and thousands of new customers later, the retailer is confident it's added a reliable long-term strategy to its paid social activity.
“Targeting referrer lookalikes on paid social is now part of our day-to-day strategy,” Tereza confirms.
Targeting referrer lookalikes
on paid social is now part of
our day-to-day strategy"
As a young brand with ambitious growth targets, SPOKE operates at a rapid pace, ruthlessly testing marketing tactics and discarding those that don’t stick. Those that do work are pushed to their limits as SPOKE determines how far they can take it to drive optimal results.
“We take pride in the fact that we're nimble and can move fast,” Tereza says. “For us, the test and learn approach has worked really well.”
This ‘test and learn’ approach has continued to evolve. In the UK, for example, the retailer has experimented with expanding its lookalike audience from 1% to 3% to see how far it can get away from the seed audience while maintaining sustainable results.
Once it finds a balance like this for each market, it becomes part of the
“It's quick and easy to create and expand referrer lookalike audiences on Facebook. We’re constantly pushing to see how far we can expand away from that core seed audience while improving performance across our markets,” says Tereza.
“Using referral data for paid social is low effort and improves key metrics. There’s a solid commercial business case
For those brands that might not move quite so fast, adding referral data to your paid social strategy may offer a way to keep up with the competition. For Tereza at least, it’s a ‘no-brainer’.
“Using referral data for paid social is low effort, improves key metrics and is constantly evolving. There’s a solid commercial business case behind it.”
Of course, a key part of any successful marketing campaign is deciphering the data – knowing which numbers to discard and which are your guiding light for what’s working and what’s not.
For SPOKE, that all-important metric is cost-per-acquisition (CPA).
“We look at things like click rate and conversion rate, but the overarching key performance indicator we always optimise for is CPA,” says Tereza.
So how does the CPA of SPOKE’s paid social strategy compare to that of other marketing channels?
“It’s strong,” says Tereza. “There’s a reason paid social is a major part of our marketing strategy. Right now, more than half of our UK budget goes into Facebook. Internationally, that’s even higher. Compared to channels like PPC, we can scale paid social and see results fast.”
Applying referral data to paid social has also confirmed something SPOKE long suspected: that building audiences based on high-performing customer segments drives results.
The CPA of paid social is strong. Compared to other channels, we can scale it and see results fast.
“Our work with Nest Commerce and Mention Me has highlighted the importance of selecting the right audiences to target," says Tereza.
"When we find ones that might already know of SPOKE and our products, we see much lower CPAs and much higher conversion rates.”
Our work with Nest Commerce and Mention Me has highlighted the importance of selecting the right audiences to target.
“It’s a learning we’re taking into international markets, particularly as we expand into the US."
To build on its success so far, SPOKE also plans to explore targeting these high-converting referrer lookalike audiences through other marketing channels.
So what’s next for SPOKE and its rapidly growing customer base?
Building on what it knows to be effective marketing channels – paid social and referral included – is high on the list.
“After good performance in 2021, building and implementing a full referral strategy is one of our team’s big focuses for this year,” says Tereza.
To further build brand awareness and grow its fan base globally, SPOKE also plans to streamline customer data across its marketing stack.
This includes exploring feeding referral data into its marketing automation tools.
Integrating referral and email automation platforms, for example, would send referral data to Klaviyo in real-time, equipping SPOKE to build deeper customer segments and subsequently serve more personalised experiences that nurture advocacy.
More widely, when it comes to making strategic business decisions, data will continue to lead the way for SPOKE.
“With the landscape constantly changing, it’s vital we have the right data to guide us and act on,” says Tereza.
“We’re constantly making sure our data informs everything we do, from our referral strategy to paid social and email campaigns. It’s absolutely integral to our business.”
Compared to the standard seed audience, SPOKE's referrer lookalikes:
Convert 65% more
Cost 12% less per acquisition
Have 30% higher return-on-ad spend (ROAS)
Click through 100% more
Is 12% more likely to refer friends