According to Martini Media, teamed with Digiday to poll marketers and ad agency personnel, the study “Engaging the Affluent Online,” finds that agency executives say 37% of mass marketers’ branding dollars are spent in digital marketing, whereas only 31% of luxury marketers’ budgets are spent in digital. However, 43% of the respondents feel that their luxury clients are moving into digital advertising more quickly than mass market brands, with another 1/3 feeling that they are moving into digital at the same pace.
Additionally, anticipated growth in digital is high among luxury advertisers. 77% anticipate at least some growth between 2011 and 2012, 48% anticipate growth of 10% or more, and 18% anticipate growth of 20% or more.
Anticipated Growth in Digital Spend by Luxury Advertisers | |
Growth Rate | Anticipated Growth in Digital Spend |
20%+ | 18% |
10%+ | 48% |
1%+ | 77% |
Source: MartiniMedia, August 2012 |
Anticipated Speed Of Luxury Clients Moving Into Digital Advertising
In general, agencies and brand marketers have similar estimates of how their digital ad budgets are allocated. Digital display advertising (online display, video, mobile) represents over half of luxury brands’ digital budgets. The only area where brand marketers differed in their estimates of spending was for social media. Agencies estimate that their luxury clients spend 10% of their digital budgets on social, whereas brand marketers estimate 22% of their digital budgets are spent on social.
Percent Of Luxury Clients’ Digital Branding Advertising Budget Allocated To Each Of The Following Channels/Formats | ||
Format/Channel | Agencies | Brand Marketers |
Display | 28% | 26% |
Video | 16 | 13 |
Mobile | 11 | 11 |
Social | 10 | 22 |
Search | 17 | 16 |
11 | 9 | |
Interactive TV | 7 | 3 |
Source: MartiniMedia, August 2012 |
Going forward, agencies project the fastest increases in video, mobile and social media, while spending in standard display is expected to decrease the most of all categories cited.
Luxury advertisers anticipate spending more on video and rich media compared to mass-market brands this year as compared with last. In part, this could be because the sight, sound and motion of online media is beginning to wean luxury advertisers away from the presumption that only glossy print magazines or television can adequately portray their goods in the right light.
Anticipate Increase In Digital Formats Compared To 2011 | |
Format | % Anticipating Increase in 2012 |
Video | 69% |
Mobile | 68 |
Social Media | 48 |
Rich Media | 45 |
Search | 29 |
Standard Display | 18 |
Connected TV/IPTV | 10 |
Source: MartiniMedia, August 2012 |
Eight in 10 respondents with luxury clients or advertisers who target high-income consumers agree it’s worth paying premium CPMs to reach luxury consumers. But currently only 29% of luxury advertisers say they do spend more online to attract luxury consumers. 48% of respondents say they spend less and 23% say the cost of marketing to luxury consumers is the same online as in traditional media.
14% of agency respondents said the amount of spending that will shift from TV to online video advertising in the coming year would be “material.” 43% said “some” of luxury advertising spending would shift to online video advertising, and another 35% said their clients will be experimenting with online video.
Across the board, both advertisers and agencies said that, for luxury advertising, digital is as effective as TV for building brand favorability and sales, and much more effective in driving online sales.
Comparing Online Video Advertising With Television Advertising, Perceived Effectiveness | |||
Compared to Television | Less Effective than TV | Equal to TV | More Effective than TV |
Driving Online Sales | 6% | 9% | 85% |
Driving Traffic to Brick & Mortar Stores | 26 | 31 | 44 |
Building Brand Favorability | 26 | 39 | 35 |
Building Awareness | 41 | 41 | 18 |
Source: MartiniMedia, August 2012 |
From an agency perspective, luxury client demands include paying more attention to the editorial environment where their ads appear. The sensibilities of the target consumer require that advertisers “make sure digital is more highly focused and less intrusive.” The business of agencies with luxury clients is all about “finding the outlets that truly target the audience.” Perhaps it is for this reason that agency respondents say that context and the ability to target customers are the most important criteria for selecting media for luxury clients.
Important Criteria In Selecting Media For Luxury Clients’ Digital Campaigns | ||
| Ranked 1 | Ranked 1or 2 |
Context (association with premium content) | 36% | 18% |
Targeting | 21 | 28 |
Performance (CPI or CPA) | 17 | 16 |
Overall audience make up (relevance to client's target) | 15 | 21 |
Reach | 12 | 17 |
Source: MartiniMedia, August 2012 |
Brand lift and sales are the most important criteria for success, but the only things luxury brand marketers say they can adequately measure is CTR, time spent, sharing or reposting activity and interaction rate.
Importance of Measure vs. % Adequately Measured | ||
Importance (Ranked top to bottom) | Measure | % of Respondents Feel Adequately Measured |
1 | Shares /Reposts | 55% |
2 | CTR | 94 |
3 | Time Spent | 76 |
4 | Interaction Rate | 80 |
5 | ARPU | 45 |
6 | Brand Lift | 50 |
7 | Sales Generated | 61 |
Source: MartiniMedia, August 2012 |
Concluding, the report says that as luxury marketers move to close the gap in digital spending with their mass-market peers, they’ll bring a more sophisticated brand sensibility, and the metrics that accompanies this. Luxury brand marketers are more willing to find their customers on niche, passion-based sites, rather than in only the online adjunct of either a print or television product.
To read more about “Engaging The Affluent Online,” please visit MartinMedia here for the the study.