According to Zenith Optimedia’s Luxury Advertising Expenditure Forecast, digital is set to take centre stage in the luxury advertising arena, contributing to most of the growth in this sector. By 2017, digital will be the largest contributor to luxury advertising ad spend, overtaking television and print.
This finding should not come as a surprise, with consumers becoming increasingly engaged with their devices and brands jostling for their attention.
High networth individuals (HNWIs) are highly connected, with 39% connecting to the Internet at least once an hour. This is 18% higher than the general population. They also engage with multiple devices.
According to SPH Magazines’ regional online luxury survey conducted with GfK, 39% of HNWIs use their devices right after they wake up, and throughout the day more than 80% of respondents would have used at least one device.
With high connectivity across multiple devices, these findings present many windows of opportunity for luxury brands to engage with HNW consumers.
However, many remain apprehensive.
Luxury’s digital conundrum
Luxury brands view “exclusivity” as a cornerstone of their brand value, conveying the idea of the scarcity of their product to consumers, which in turn invokes the desire to possess it. With increasing focus on the digital realm where the consumers are, digital advertising presents a conundrum for many luxury brands, having to balance their need to engage new audiences with retaining their brand proposition of exclusivity.
Luxury advertisers who have built their businesses around the concept of exclusivity fear that sending their brands into the vast digital space will cause their brands to suddenly become “too accessible.”
Their brands, which were once available only to a select few, would now be available to anyone with a smart device and an Internet connection, and the brand value they have worked so hard to build will be diluted. This has long been a dilemma for luxury brands, and their reticence toward digital advertising is understandable.
Nonetheless, while many brands are slow to pick up on digital advertising, those that have done so are reaping the rewards. Despite a sluggish retail market this year, Burberry managed to achieve a 2% retail sales uplift as a result of its digital brand elevation efforts.
The question remains, though, whether it is possible for luxury brands to successfully resolve the digital dilemma — and negotiate their way through the complexities of digital advertising — without compromising their brand value?
Using a premium audience network
The most obvious solution is for luxury brands to serve their message to a curated and premium audience, and this is where magazine media enters the picture.
Due to the strong engagement and resonance the content has with readers, magazines come with well-defined audience segments. Magazine publishers have leveraged this and implemented strategies to respond to the needs of these advertisers.
SPH Magazines, for instance, has introduced the Luxury Circle, a premium audience network aggregating its audience across multiple luxury magazine brands and multiple touch points.
This allows a brand’s message to leverage on its existing content expertise and premium audience, effectively offering marketers depth of coverage, breadth of genres, and scale of assets across the suite of magazine brands.
Marketers are assured their campaign is scaled up and optimised in terms of audience reach, yet couched in an environment and community that are consistent with their brand profile, thus retaining their exclusivity.
Creating brand “moments”
Even with audience targeting, brands now have to find the most engaging forms to capture their audience’s attention.
According to TNS Global, audience reach no longer correlates with quality of engagement. Consumers tend to remember encounters that invoke emotion and are consistent with their motivations and priorities. Therefore, what sets great brand campaigns apart from others is the ability to create unique and influential brand memories.
To maintain engagement with consumers, digital content for luxury brands needs to be inspiring, relevant, and increasingly experiential. There have been many innovations in digital advertising, and it is now available in various forms on multiple platforms.
With a creative arsenal to choose from, brands now face another problem: how to pick the most effective forms of advertising that best engage their audiences.
Having maintained a close and trusted relationship with their audiences over the years, magazine publishers naturally have a wealth of knowledge about them, such as their habits and preferences.
Using that information and other insights into the audience, publishers are well-placed to design campaigns that resonate with their target audiences, be it in the form of bespoke storytelling, native advertising, or events.
An example is a campaign that ICON Singapore crafted for Buccellati. In addition to placing advertisements and advertorials in the Chinese-language magazine, which reaches high networth women, a digital, exclusive Q&A with the brand’s creative director was created and hosted on the Icon Web site. This introduced a new online audience to the brand’s creative philosophy.
On top of that, the brand also invited readers to a private lunch, where they had an exclusive preview of the brand’s one-of-a-kind collection, flown in from Italy, providing readers a truly authentic brand experience.
With the expertise of the magazine team, a campaign spanning multiple touch points was successfully concluded, and the audience was completely immersed in a one-of-a-kind luxury brand experience.
Taking the plunge
While luxury brands continue to gingerly navigate between scale and exclusivity, they must also realise very quickly that more of their customers are not only digitally immersed (even if they were not digital natives to start with) but also expect quality engagement over multiple touch points. Hence, engaging them via a single channel is no longer sufficient.
With a community of premium and deeply engaged audience members, along with a deep understanding of what they want, magazines may just offer the break-through solution to address this conundrum.