How THG Gained Incremental Revenue and Lowered Costs with adMarketplace’s Native Search Media

Key Stats:

• 10% growth in incremental revenue
• 3% cost savings
• -0.29% COS dilution

Background:

THG (The Hut Group) is a global, digital-first consumer goods powerhouse, best known for operating an expansive portfolio of direct-to-consumer health, beauty, and nutrition brands. With a focus on beauty enthusiasts and fitness/wellness consumers, THG reaches customers in over 160 countries.

Challenge:

Like many global retailers, THG saw inflationary pressure on costs across marketing and advertising channels during the economic downturn caused by the COVID-19 pandemic. Continued investment in legacy search channels was resulting in diminishing returns for the brand. Additionally, scaling within these channels became increasingly inefficient, leading to inflated cost of sale (COS) and waning ROI.

It quickly became clear that THG needed to diversify its media investment to drive incremental results, new customer acquisition, and cost efficiency at scale. Due to rising media costs, THG was working to further diversify its paid search mix, seeking additional search partners to shift investment to help reduce CPCs and COS globally.

Strategy:

The name of the game for THG became search media diversification. After a thorough review of several different solutions, THG turned to adMarketplace because of three core value propositions:

1. Exclusive BNPL Supply — adMarketplace serves as a one-stop-shop for the largest buy now, pay later (BNPL) network worldwide.
2. Robust Reporting & Insights — adMarketplace’s expert measurement network delivers accurate and transparent insights into media value.
3. Managed Service Partnership — adMarketplace builds forever partnerships with its clients, providing a hands-on, collaborative approach to client support.

“adMarketplace differentiated itself from other competitors due to the premium targeting and exclusive placements on BNPLs,” said Cal Salvaggio, Global Head of Paid Media at THG. “Their robust reporting and insights set the way for us to drive marketing diversification.”

THG launched adMarketplace with test budgets across Lookfantastic (UK) and Dermstore (US) on publishers including Clearpay, Laybuy, and Firefox. Running these tests helped THG offset some of the performance pressures they were facing on Google and delivered strong results, cementing adMarketplace’s solutions as the brand’s search media investment of choice.

Outcome & Results:

Since beginning this partnership, THG has adopted adMarketplace’s native search media across our extensive publisher network to drive search campaign effectiveness and maximize revenue. This expansion beyond legacy search into native search media channels like BNPLs has enabled THG to engage with all of its customer cohorts across different touchpoints to aid with new customer acquisition as well.

“We started the partnership with adMarketplace in November 2022 and we’ve seen some outstanding results with scale and diversification, helping us bridge our targets within paid media with -0.29% COS dilution (£400K cost saving) for an incremental 10% revenue growth,” Salvaggio said.

Our advertiser success team worked diligently with THG to deliver performance and efficiency at scale, effectively moving the needle on the two KPIs the brand uses to measure success: COS and new customer acquisition. As Salvaggio notes, “their managed service has been key to the success of the partnership and that value was evident from the outset — even before committing to the deal.”

The speed and ease with which THG was able to onboard adMarketplace’s native search media solutions helped the brand drive new customers quickly after integration to reverse the declines they were seeing across other traditional marketing channels. 

“adMarketplace is now a fundamental aspect of our broader marketing strategy, having a key role in driving incremental new customers and revenue for a dilutive COS compared to other core channels,” Salvaggio said.

Moving Forward:

In partnership with adMarketplace, THG is aiming to scale further in 2025 and beyond. Specifically, THG hopes to scale adMarketplace’s native search media across other core beauty retailer brands, including Cult Beauty, by the end of this year to drive their marketing diversification efforts even further.

Client Testimonial:

“Ultimately, we chose adMarketplace because the goal we wanted to achieve — diversifying our marketing mix to drive incrementality — aligned with the solution and service provided. Additionally, the opportunity to work with a talented team in a collaborative and data-focused environment was a key factor in my decision.” - Cal Salvaggio, Global Head of Paid Media at THG.

‍