• by Bob Shullman , Columnist, July 3, 2013

Last month, I reviewed affluent consumers' recall of and interest in the advertising they saw or heard in selected media channels or platforms by different household-income levels ($75,000 or more —the top 39% of all American adults, $250,000 or more — the top 3%, and $500,000 or more — the top 1%). Marketers who focus on consumers who buy luxury goods or services then contacted me and asked if I could expand on what I had reported by helping them understand which media platforms and channels they should consider using to most effectively reach those consumers. They also asked if we could include the 61% of American adults with household incomes below $75,000 (the "average" Americans who buy luxury products or services from time to time, especially in more "affordable" categories: cosmetics, fragrances, wines and spirits, etc.). This report now includes those "average" American adults.

In our latest survey wave, we asked three questions that provide insights for luxury marketers to consider as they decide where and how to engage their target audiences. The first question relates to consumers' plans to buy any luxury products or services during the next 12 months; the second question addresses the media platforms where consumers saw or heard advertising in the past 30 days; and the third assesses consumers' level of interest in the advertising they saw or heard on these specific media platforms. In the exhibits that follow, notable differences are highlighted in yellow.

About one in three (34%) of all American adults reported in our most recent survey that they plan to buy a luxury product or service during the next 12 months. As might be expected, the likelihood of buying luxury increases as household income increases.

To assess how to reach luxury buyers, we divided the four market segments of interest (all adults and the three household income segments) into consumers who are planning to buy luxury and those who are not. Of the 21 media channels and platforms measured, five of the top seven channels or places to reach all American adults continue to be traditional channels (television, magazines, etc., with websites ranking second and social media ranking seventh). Among all adults planning to buy luxury, only magazines' and social media's relative positions increase among these seven channels when compared with those not planning to buy luxury. Among more affluent consumers (the top 39% — household income $75,000+), those planning to buy luxury tend to pay more attention to advertising than all Americans do. They also appear to favor traditional print (magazines and newspapers), while digital channels (websites and social media) are also reaching a greater proportion of these valuable luxury prospects. For the more upscale $250,000+ or $500,000+ household-income adults, traditional print channels remain strong as far as reach goes, while social media's and websites' reach declines. 

In addition to the potential reach of the 21 channels and platforms measured in the survey, we also probed consumers about their interest in the advertising they see or hear in these platforms. According to our survey, there are large differences in the potential effectiveness of advertising, depending on the platform a luxury marketer might select. Among all American adults who are planning to buy luxury, advertising "inside airplanes" tops the list of potential platforms for generating interest. Notably, though, that channel reaches only 8% of all adults planning to buy luxury (position 19 out of 21 measured platforms). So that readers of this paper will not have to refer to the prior exhibit to review the potential reach of each of the 21 channels profiled, the exhibit that follows this one summarizes potential reach and effectiveness for those planning to buy luxury for all four market segments.

Notably, as marketers start targeting higher-income adults who plan to buy luxury, the traditional channels tend to rise to the top positions for generating interest in the advertising they include.

The following exhibit summarizes the rankings of the 21 channels and places by potential reach and then potential effectiveness among those consumers who plan to buy luxury during the next 12 months sorted by estimated reach among all adults. The effectiveness rank is based on those who saw or heard advertising on the particular channel or platform listed. The top seven in each column are highlighted in yellow.

Looking forward, our ongoing survey will continue to track response to the many media channels and platforms available to luxury consumers.