‘Talks with Google just go round in circles’: Lush on pulling ad budgets from big tech

Its chief digital officer Jack Constantine explains to The Drum that the motivation for doing so is that Google, Amazon, Meta, Apple and Microsoft are “counter-intuitive to the culture of Lush“.

He says: “We’re about community and about spending where we feel it can support people and real initiatives. But we find ourselves unintentionally spending a lot on big tech, so we want to hit pause, asses it a bit and decide what we’re comfortable with.”

It is a decision that has been a long-time coming, with Constantine having become increasingly disheartened by the pace at which the tech giants have swallowed up any new platform or startup showing promise over the past 15 years: “Anything new you can see coming up, you’ll find it’s owned by big tech.“

He uses OpenAI as an example. Founded on commitments that included not seeking profits and freely sharing its research and even the code it develops, it had vowed to ensure AI had a positive human impact. Then, last year, it entered a multibillion-dollar deal with Microsoft and subsequently signed up with Bain Capital to work with Coca-Cola and open the doors to other corporate partners.

“Do we have to just accept that as the status quo or can we challenge it?”

Lush’s anti-social media policy from 2022 has paved the way for its decoupling from big tech. Last year, the brand removed itself from all Meta-owned platforms as well as from TikTok. And despite some challenges, it has come out of the other side unscathed, seeing little impact in terms of brand awareness, engagement or sales.

Splitting from Google and Microsoft is an altogether different challenge, the pair commanding the largest share of Lush’s tech and marketing budgets as the company relies on them for everything from cloud hosting and remote working solutions to e-commerce systems. It spends £1m on Google Workspace, but when that contract ends later this year it will not renew it.

“It’s not unreasonable to think that within three years we can have our spend on Microsoft and Google down to less than 1% of our tech budget, if not down to zero.”

Instead, it will opt for ”cheaper” open source options, he says. ”You pay more for enterprise solutions, black box solutions where you don’t get to see what’s going on. For example, our till solutions are now open source, meaning we don’t need to pay a license fee. We can put it on our most ethical and not-so-expensive tablets, so avoiding Apple, meaning we’re already getting away from proprietary hardware and software solutions."

‘We have a trademark over ‘Lush’ and ‘bath bombs’ but Google isn’t interested’

The big problem, though, is the significant amount it spends on Google Ads in the name of trademark protection. To ensure it is the top result when someone searches ‘Lush’ or ‘bath bomb’, for example, it has to pay for the sponsored slot to stop a competitor taking that space. Constantine’s argument is that if someone is searching for ’Lush’, then it should be guaranteed to appear first as its trademark buys it that privilege.

Google doesn’t agree, however, and as of 2019 it ended the restrictions that stopped brands from bidding on a competitor’s branded keyword.

“I’ve had conversations with Google, with senior staff. But it’s just not listening to me. The biggest challenge we have is around the advertising element. Because it is so reliant on the advertising model, it’s impossible for it to be able to accommodate our needs without contradicting its business. Which means I find myself in conversations that go round in circles and I just get client managed into a situation where it is saying, ’it’s all OK, you just carry on’.

“And so I’ve ended up, after several senior conversations, saying, ’it’s just not working and you’re not giving us what we want’. We have a trademark over ’Lush’ and ’bath bombs’ and we want to be able to protect it, but Google is not interested in that.”

Lush tried rowing back on Google Ads spend in the past but, as anticipated, quickly saw other brands using it to their advantage. Now, though, it is committing to stop playing Google’s game.

“We were never a big advertiser anyway. The only reason we were was for trademark protection. But actually, if we’re saying we’re not going to give Google that money and then put it into other spaces and activations, we think we’ll see a stronger connection with the community.”

Now that it’s no longer on social or spending on search, where does it plan to spend that new-found budget? Constantine said it has been dipping its toes into activating its community in a completely different way – the metaverse. While other brands are taking a step back from their experiments in this new world, Lush sees it as the prime time to get to grips with the space.

“We had a forum that was popular in the late 90s. Then we went into social as it was free and popular and community-driven before it morphed into what it is now. And I think we’re very keen to get back to our roots on the community side of things. We can go to platforms like Discord and have a more direct community relationship, which is all really exciting and invigorating, rather than being in this ad-heavy world that isn’t our world anyway – we never wanted to be here.“

‘We can help make sure web3 won’t be completely dominated by big tech’

Lush has already created a space on Decentraland, building a digital-twin replica of its SXSW house activation in Austin, and has experimented with NFTs. It is currently looking at exactly how web3 can be further integrated into the company.

The big draw is that, so far, big tech hasn’t taken over and Lush can work directly with the smaller companies paving the way. Constantine believes that by putting the brand’s weight behind these startups now, they can help them resist selling out.

“Inevitably, there is a potential outcome where it all gets swallowed up and it’s hard to work with companies that aren’t in some way owned or operated by a big tech platform. But this is our window of opportunity to shape how the next 10 years look.

“When they’re in startup stage, they don’t need a huge amount of money and a brand like Lush giving them the credibility does start to move things. We can be present and be involved to help navigate a route that means web3 won’t be completely dominated by big tech. We’ll be looking at something with more diversity and democracy.”

Constantine admits that, for now, Lush will have to be the ”canary in the coalmine” when it comes to advocating for a move to the metaverse. Its own research found that 52% of people still believe Google and Amazon are trustworthy sources of information, while slow user growth has led to disappointing results for many of the first companies to invest in metaverse projects.

“Not everyone is going to understand what’s going on, but if we’re comfortable and understand what’s going on, then that’s all that matters. People will still be able to shop with us and engage with us and we’ll do everything we feel is right to get them there to web3.”