Mac Makeup Case Study

Digital ad campaigns which rely on cookies for ad targeting can often produce misleading results, wasted impressions and missed conversions. For the launch of MAC’s new eye shadow line, the cosmetics brand used Facebook’s Atlas tool for people based marketing to improve ad targeting.

Case study summary

• MAC cosmetics used Facebook’s Atlas tool to identify ad impressions which were not being targeted at its key audience

• By using people based targeting compared to cookies, MAC ensured that its ads were viewed by its target audience

• MAC saw a 16% increase in conversions from using people based targeting

Challenge

MAC cosmetics worked with digital agency NetBooster to generate awareness for the launch of a new eye shadow line and drive ecommerce sales. The target market for the campaign was females aged 18-24 (primary) and 25-44 (secondary). The results from previous campaigns using cookies showed that 18% of the ad spend had been spent on wasted impressions and some conversions had been “lost in attribution” due to cross-device behaviour. To reduce ad spend wastage, NetBooster wanted to see media demographic insights to compare people and cookies.

NetBooster used Atlas, people based delivery analytics to quantify the demographic receiving the targeted ads.

What is Atlas?

Solution

By using Atlas, NetBooster found that in previous campaigns one third of campaign impressions were men when the ads had been targeted at women. The money that had previously been spent on off target advertising could be invested on higher performing channels for the new campaign.

By using people based ad targeting, MAC could identify the top publishers and platforms to place their master heads, classic display ads and ad blogs. MAC discovered that niche publishers such as a fashion periodical delivered 43% of its impressions to the key demographic of women aged 18-34 resulting in a higher ROI than other publishers.

Results

In the comparison of people vs. cookies, people-based ad targeting identified 16% more conversions than cookie-based, demonstrating the value of mobile data and measuring the actions of real people across devices. Cookies were also found to overstate the campaign’s reach by 9%, while also understating ad frequency by 10%.

By using people based targeting through Facebook’s Atlas, MAC had more success in targeting its ads at the right audience.

Mac Cosmetics

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MAC Cosmetics

"All ages, all races, all sexes, all MAC. " This is the motto for one of the fastest growing cosmetics brands in the world, MAC Cosmetics. For MAC artists and MAC customers this motto is not just words it is truly what drives the culture of this amazing Company. At any given time you will find grandmothers shopping for color with their granddaughters. Isn't that an amazing and wonderful concept?
As you read further you will see why MAC is such a unique entity in this well established industry. Every aspect of what makes MAC Cosmetics; "MAC" being its products, its location, its brand image, or its phenomenal price point is unique and goes against most typical marketing methods. As we all know product, price, promotion and place are the four fundamental variables that either make or break a company. MAC is currently the only Estee Lauder brand that is not only meeting; but exceeding its annual sales goals. Last year MAC surpassed its sales plan by 121 million dollars! Which is unheard of in this industry.
Lets start at the beginning…Makeup Art Cosmetics or MAC was created in 1984 by two men, Frank Tosken a seasoned makeup artist and photographer and Frank Angelo a successful business owner of a chain of salons in Toronto. They found that cosmetic products that were readily available were not performing well under the intense environment of studio lights & perspiration, had little color payoff, and were constantly having to be touched up. So, they created cosmetic formulas and colors that met these specific needs. By using them backstage on models and performers news traveled fast about how wonderful these products were. At first MAC was only available to the professional makeup artist. Then by word of mouth news spread to the general population and was maid available to the public and in 1994 was purchased by the Estee Lauder who owns many of the world's favorite cosmetic brands. MAC continues to be a testimonial brand of cosmetics, meaning that there is no paid advertising for MAC to promote their traditional product. They rely solely on testimonials and word of mouth advertisement. However you may find that MAC does advertise only one product and that is Viva Glam Lipstick. This is their charity lipstick and it comes in five different shades.

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100% of the retail selling price of this lipstick goes to men, women and children living with or affected by HIV and AIDS. This money goes to living needs and not research. MAC feels that there are enough efforts going towards finding a cure for AIDS, and that providing money to help make someone's life a little easier makes more of an impact right now. Currently the spokes person for Viva Glam V lipstick is Pamela Anderson, and she has helped us raise 4 million dollars for our MAC Aids Fund. As a whole, Viva Glam Lipstick has raised over 50 million dollars since its inception in 1984 and this number continues to climb.
MAC's image is Sleek, Clean, and straight forward. This is expressed through their packaging, product names, store image and how their employees dress. MAC is all about allowing the product to be the focus, so product packaging is simple and made of plastic or glass. There are no fancy shapes or embellishments. This allows for a reasonable price point and for the product not to be overshadowed by opulent, gaudy packaging. MAC products also have straight forward, logical names. For example eye shadow is called eye shadow, and their matte foundation is called Studio Matte Finish Foundation, instead of something creative like "eye transformer" or "Perfect Finish Foundation" which many other cosmetic companies use to sensationalize a product. Often you will find that MAC products have the word "Studio" or "Pro", before the actual name of the product. Such as Studio Fix Powder Foundation or Pro Eye makeup Remover. This is done so that customers know that this product was actually used by makeup professionals and used in a studio setting. This means, that these products do what they are meant to do quickly, and are easy to use and create a great finish that lasts.
MAC wants its customers to be able to experience their product line in a clean straightforward way. So, MAC locations are minimalistic, with Marble counter tops, wood or poured cement floors, and open tester units. When a customer walks into a MAC location they tend to be a bit overwhelmed, because all of the products are open and available to experience. That is why the MAC makeup artist is so important. All MAC employees are professional makeup artists. This means that before they are hired they must have experience doing makeup in a retail environment, or doing makeup as a profession. That is why customers have such high expectations when they come to a MAC counter. They know that the experience they'll have is going to be at a higher level since they are dealing with professionals. The MAC image is also communicated to the customer by the way artist dresses for work. A 100% Black attire is required. There is no particular dress code other than that. An artist is free to express their personal clothing style, as long as it is black. This allows an Artist to express and display their creativity and individuality, and in turn allows the customer to get a feel for the style of a makeup artist. Each customer is drawn to the MAC artist that represents a look that they can identify with, which is the start of a great customer experience. MAC artists are also required to wear a minimum of fifteen MAC and only MAC products on their faces every day. This is great advertisement, and shows the versatility of the products.
MAC is considered to be a luxury cosmetic line. Channel, Lancome, and Christian Dior are also luxury brands. Their prices tend to be quite high, for example the average price of a foundation from any of these lines is around $40.00. The most expensive MAC foundation is $27.50. They keep their prices down so that everyone can afford the experience of wearing professional products. The straight forward packaging and the lack of mass advertising and free gift promotions allows them to keep their prices reasonable. So you may ask, why doesn't MAC have a free gift? Every three to four weeks MAC launches a new color collection. Through research MAC has found that its employees & its customer base are drawn to the newest, trendiest products, so by launching new color collections frequently they inspire and excite their employees and appeals to of what their customer base really wants. By doing this MAC has a steady flow of income throughout the year. Most of the other companies have severely high revenue during "free gift" promotions and low revenue points when they don't. They have trained their customer to buy when they're getting something for free, which can be a tough cycle to break. They constantly have to come up with bigger and better "gifts" to keep their customers coming back.
To reward their customer for being loyal to the brand, and to also help the environment, MAC has a consciousness program called "Back to MAC". Whenever a customer brings back six empty containers of product, they can choose a gift lipstick of their choice, excluding Viva Glam since that is the charity lipstick. This incentive program allows customers to try a MAC lipstick if they never have, as well as try a new color that they may not usually pick without the commitment. To touch the professional customer MAC offers a 40% discount to professional makeup artists, and a 30% discount to industry professionals such as models, actors, new anchors, nail techs, and hair stylists. Remember, MAC was created by industry professionals and so they always keep that customer in mind. Although so many customers are willing to purchase MAC product without a free gift, the company realizes that a promotional and limited life items will excite their customer in a similar way. So, seasonally MAC creates limited life products in their color collections, and these products are only available until they sell out. Making such exclusive products creates a sense of urgency in the customer so that they buy now instead of later. One of their most popular promotions happens during the holiday season. MAC launches a series of holiday brush, eye shadow, lipstick, and lip gloss sets at an incredibly low price. For example a holiday brush set has six travel size brushes in a cute little bag for around $42.00. If you were to purchase these same six brushes at regular price it would cost you around $245.00 and you don't get a bag. These holiday sets are shipped in limited quantities, and are one of the most anticipated launches of the year.
Receiving these collections on time is very important to each location, and since the MAC customer thrives on trends timing is everything. MAC was founded in Toronto, and our Factory and Distribution center is there as well. Through meticulous planning each MAC location receives new color launches about 2 – 3 weeks before the product goes on counter. MAC doesn't believe in having a lot of back stock sitting in stock rooms. So it is the responsibility of the Retail Manager to send a stock concerns list to the buyer of the store and the company ships them more product based on their most popular items and what is put on the list. Limited life product also has a limited time to be at a location. If this type of product sits for longer than six months from when it launched it has to be returned to the company, and it is then re-shipped to locations that sold it well. This has two powerful effects; one is that it maintains the sense of exclusiveness at the location where it isn't selling, because it is no longer there after six months, so it gives the illusion of it being sold out. It also allows the locations that sold it well to increase their revenue and supply their customer's demands, everyone wins!
MAC is truly an innovative and interesting company to work for and shop from. This company has a conscience, and it loves to make people look and feel good on the outside and on the inside. By creating a product and brand that is created by trend setters for trendsetters, it is easy for MAC to stay closely connected with its customer. That is why MAC is and will always be a cash cow. MAC changes and evolves with its customer because they are the same mind. Therefore, things will never get old, and MAC will never loose touch with it's customer base. I was a die hard MAC addict for four years. Then I became a MAC artist and have been working for them for five years, and I still get excited every time a new collection comes out. MAC is and always will be about the experience.

References
MAC Connections Power Point Presentation
MAC Product Knowledge Manuel
The MAC Talk
www.macaidsfund.com
www.maccosmetics.com
VALS Employee Survey, The Stanford Research Group



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