Upscale Is Up Again: Luxury Ad Market Expanding 2.9%

Ad spending on “luxury” category products and services is on track to rise 2.9% in 2017, according to estimates released this morning by Publicis’ Zenith unit. That marks a pronounced correction from 2016, when spending on luxury goods advertising contracted 0.5%.

The expansion -- which is being driven by luxury category spending in the U.S., China and Japan -- is projected to expand even further in 2018, which Zenith forecasts will rise 3.9%. Together, Zenith estimates those three nations will represent 80% of all luxury category spending by 2018.

The report -- which focuses on luxury category ad spending, including sub-categories such as luxury automotive, fragrances & beauty, fashion & accessories, and watches & jewelry -- comes as consumer purchasing of luxury goods has been relatively flat.

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“Even though we expect luxury advertising growth to accelerate to 3.4% a year between 2016 and 2018, it will continue to lag behind the market as a whole, which will grow 4.4% a year across all categories,” Zenith Head of Forecasting Jonathan Barnard notes in the report.

In terms of media, he projects luxury ad spending on the Internet will “overtake print to become the main luxury advertising medium in 2018.”

Print currently accounts for 32.7% share of luxury category spending, followed by a 31.3% share for TV and a 25.8% share for the Internet.

“However, almost all new luxury advertising goes to internet advertising,” Barnard states, adding, “We forecast it to account for 87% of ad spend growth between 2016 and 2018.”
2 comments about "Upscale Is Up Again: Luxury Ad Market Expanding 2.9%".
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  1. Paula Lynn from Who Else Unlimited, April 18, 2017 at 1:39 p.m.

    More people have more money to spend ? Or is this part of debt incouragement ?

  2. Ed Papazian from Media Dynamics Inc, April 19, 2017 at 9:53 a.m.

    Joe and Wayne, much of the print and digital media investments by these "luxury" advertisers go to publications or websites that cater to the marketer's areas of interest---like travel magazines and websites or automotive magazines and websites. If "linear TV " wants to grab more of these promotional dollars the networks and cable channels need to offer more content focused directly on those subjects, not in primetime but elsewhere---like on the weekends or the early mornings for broadcast and almost anywhere on cable. Then, the money will flow.

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