Spending $505 million on advertising in one year, Temu quickly went from an e-commerce startup to a household name in the US. His Super Bowl ad may not feature any celebrity appearances or pop culture references, but the exposure and brand recognition it generated seems to have paid off.
MediaRadar CEO Todd Griselman said Temu's three-air Super Bowl ad was one of the latest iterations of a massive marketing campaign for the brand. We talked about Temu's apparent strategy and what we can expect from Temu in the future. This dialogue is abbreviated to emphasize clarity and continuity.
What do you see as TEMU's overall strategy?
Griselman: Most of the spend, 75% of which is on social media. Your spending concentration is very high on meta on Instagram and Facebook platforms. A few things can be gained from this strategy. For one, Facebook and Instagram are proxies for the American public in 2024. It's not a mainstream audience. During the Super Bowl, I asked my daughter, “Do you know Temu?” And she said, 'Oh, I know Temu well.' But I also asked my mother who is in her 80s. She also already knows Temu well. That much money in such a concentrated period creates enormous access to the American people.
At the Super Bowl, their ad was different than everyone else's. Why did they choose this type of advertising and what kind of strategy do you think was at play?
Griselman: Most companies that spend anywhere near this amount do extensive audience testing beforehand. Regardless of what the experts say about it — and I know it's not one of the experts' favorites or the most entertaining ads in the headlines — my strong expectation is that in their tests, it will perform well.
When a product has a very wide audience, it is sometimes difficult to use actors and actresses because people react to what they see in an ad. If you only see young women in an ad, people will subconsciously assume that the product is for young women. …that's another hypothesis: they wanted to be accepted by the whole population. So they don't want to limit it to a certain demographic. This is another smart way. Everything was orange. It's just plain fun. We emphasize price, products and experience, and that's it. We don't allow people to subconsciously think, “Maybe this isn't for me.”
Why do you think they aired the same ad multiple times? It is definitely an expensive affair.
Griselman: I think it's a way to really stick to the message. It's a two- or three-hour commercial. of the story. …you become part of the conversation.
It is a mature market. Very saturated, many established competitors. … to compete against it. I think the bar is too high to kick me out of Amazon or Target or Walmart or anywhere else that has my credit card. I have to commit to going there and trying it, and that's a big ask these days.
The big picture: “Hey, isn't e-commerce fully mature in 2024?” I think by the time you think that. There are new competitors who are truly willing to buy their way to American citizens. It is very fascinating and surprising to me. I thought the social media landscape was the same: there's no one new anymore. In five years, TikTok has absolutely become a major player in the market in a way that none of us expected.
Who has used this type of marketing strategy in the past? How did it work?
Griselman: Amazon doesn't invest as much as it used to, but there was a time when we saw Amazon investing more every year. Perhaps you remember this. Even 10 years ago, Amazon had all these holiday ads and they were running 24/7 to condition us and train us to go online, and that was the new thing for holiday shopping. …they still do it, but they don't have to do it as often because they already have a direct connection to your phone, for most through their app. It costs them nothing.
Another example of this was when major streaming services were launched. …All this happened at the very beginning (of the Covid-19 pandemic) when we were stuck in our homes. We saw a big increase in promoting Hulu and promoting Paramount+ and Max. These are the things that people need to train to buy subscriptions. Disney+, even though we all know Disney. In a short period of time, they gained about 50 million subscribers in the first six months.
What do you think we will see from Temu in the next six months?
Griselman: It certainly wouldn't surprise me if they slowed down their marketing efforts for a few months to assess the sustainability of their investments.
Does it work? Will it come back? Do people make repeat purchases? We have seen this many times in the past.
Griselman: A lot of investment goes into making e-commerce successful. If it works, I expect it will really force them to expand and grow. If it works really well, they can slow down the promotion to process new customers, making sure the word of mouth is positive. People say, “Yes, they offered my product. It was great.” If it works and people have a good experience, I expect that as we go into the summer, the promotion will pick up again.
