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IKEA - AI drive transformation

To keep up with increasing competition in the Netherlands (3% drop in Share of Spend from Financial Year 2021 vs. 2023, while budget increased by 18%), IKEA wants to be seen as an inspirational brand within the home furnishing category. However, the retail business remains product-focused, particularly with always-on consideration campaigns that push new product ranges or seasonal offerings, rather than adopting a more engaging brand approach.

IKEA
  • The Netherlands

Insights

IKEA’s content creation is decentralized. Local clients work with multiple local creative partners while also paying for the more generic global creative packages that they can download from a global repository. Content creation is expensive and creative budgets are weighted towards the bigger, impactful campaigns. This means that for consideration-level campaign the clients default to the cheapest option which is the global static content package. These static options often do not suit our audiences and channel mix, as the format can lack the dynamism and energy needed to position IKEA as an inspirational brand. 

We know that budget restrictions will not allow our clients to invest more in our consideration-level campaigns while we also believe that a more dynamic format would allow better engagement with our audiences. So how can we make our consideration campaigns more inspirational? Our Breakthrough approach was to find a model within our organization that could enhance creative efficiency using existing assets without increasing budgets. 

Strategy

We worked with StudioM to introduce an AI solution transforming static product shots into realistic, 3D product showcases. This can benefit us in three areas: 1) It can save money for clients as they can continue to choose the cheapest option of using global static images 2) It can support the goal of moving IKEA towards an inspirational brand approach, rather than merely a retail brand pushing products 3) It can strengthen our relationship with IKEA positioning EssenceMediacom as a Breakthrough agency offering scalable solutions applicable to other campaigns and markets. 

StudioM used an AI tool to enhance the global static images, testing multiple versions to create the most realistic product closeups or slight rotations. The video featured upbeat music, with the price fading in and ending with the IKEA logo and tagline 'a world of ideas.' We tested three creatives in the 'New Range' campaign: global static, global video, and AI-enhanced. The test was optimized for Reach as the primary KPI, with Visitation (Google Analytics) as the secondary KPI. 

Results

While Reach was 5% higher for static content (933,745) compared to AI-enhanced content, the AI-enhanced content outperformed the other two creatives in terms of Visitation (13% higher vs. static; 100% higher vs. global video). Interestingly, the AI format outperformed the global video in terms of CPV (€5.10 vs. €11.79) by using slower movements. Key takeaway: using both static and AI-enhanced assets can provide valuable inspiration to users. Next step: test further AI formats and create fame for our clients within the global community, potentially scaling the Nexus StudioM solution across 17 markets.