Content and commerce. With all the focus that we in the media industry put on mobile, social and other cool things that will accelerate the migration of budgets toward digital marketing, it still comes down to content and commerce for luxury brand marketers.
We have the numbers to back it up, and some of them are surprising. It’s hardly going out on a limb to say that luxury brands are moving money online. However, the way in which they will do it and the issues that are important to them are surprising. Martini Media has just released the 2012 Luxury Brand Advertising Outlook, developed in partnership with Digiday. It polled over 345 luxury brand marketers, including: Aston Martin, Baume and Mercier, Five Star Alliance, Godiva, Jaguar, Virgin Airlines, each of the media agencies that represent the brands and many more affiliated companies.
As I said, no big surprise that the vast majority of those surveyed indicated that the investment in digital is growing. But I was surprised at the extent to which luxury brand marketers want more effective ways to reach affluent consumers on the go. Standard display ads? Not the most exciting for luxury brands. The affluent have more dollars than time and expect an engagement experience that standard banner units do not deliver. And, while they are willing to pay for it, if they cannot measure the return across their entire range of marketing investments, there’s no free pass for digital marketing.
The study concentrated on four focal points:
- Allocating dollars across digital platforms: The study showed that luxury brands plan to spend more on digital by the time the year is out. More than half believe that growth will be greater than 10 percent. Standard display banners are not anticipated to grow, and this is where content and commerce become important. Marketers anticipate spending more on social than their agencies do, and that’s a bet on content. Social spending estimates are two times as high among brand marketers vs. agencies. In fact, everything but standard display are the hot growth areas: Rich media, social, mobile and video. TV dollars will be shifting to online video for luxury. More than half of agencies believe that their luxury clients will shift TV dollars to online video. Only eight percent think their clients will not be leveraging online video at all.
- Commerce: Digital media is perceived as effective at driving favorability and both online and in-store purchases. Half of the respondents believe that digital is more effective at driving retail sales as well. 80 percent believe that digital is as effective or more effective at driving brand favorability. 60 percent believe it is as effective at building brand awareness. Context and targeting are the most important criteria for online media selection for luxury brands. Nine in 10 luxury marketers believe it is possible to build reach through niche, passion based sites.
- Measurement: The methods of measuring ROI for luxury brands still needs improvement. Sales and brand lift are the most important. However, the continued reliance on content sites and brands on the “click” as a KPI is a limiting factor.
- Peer-to-peer: Which luxury advertisers do survey respondents feel are doing a good job online: BMW, Burberry, Chanel, Lexus, Mercedes, Tiffany, Cartier, Porsche, Audi, Tag Heuer, Rolex, Ralph Lauren, Gucci, Coach, Apple, Inspirato, Agent Provocateur, American Express, Caesars, Capital One, GE, Gilt Groupe, Harry Winston, Hilton, IWC, JetBlue, Johnnie Walker, Kate Spade, La Prarie, Louis Vuitton, Marc Jacobs, Mini, Omega, Oscar de la Renta, Samsung, Starwood and VW.
For me, the key takeaways from the report come from the measurement side. Commerce is relatively easy to measure. Sales lift, conversions, attribution – we know how to do all this. However, content is going to take a more sophisticated measurement approach. Brands need to get to the content that produces passion and we need more immediate measurement tools from advertising on those sites. It’s not necessarily about clicks. Learning about the audience and their behaviors and preferences is just as important. The definition of affluence is changing. Luxury brands need to change with it. You can download the full report by visiting www.martinimediainc.com/luxurystudy