Luxury brands up their digital marketing spend in 2012

Luxury brands are upping their spend on digital media in 2012, according to a new report. While most brand marketers and agencies believe that digital marketing is more effective than TV for driving online sales, 44% also said it was more effective for driving sales to bricks and mortar stores.

The Luxury Brand Advertising 2012 Outlook study from luxury-focused media and content platform Martini Media, developed in partnership with researcher Michele Madansky and Digiday, quizzed 345 luxury brand marketers and media agencies representing brands including Aston Martin, Virgin Airlines, Jaguar and Godiva, and found that while 31% of luxury brand marketers’ branding spend is on digital marketing, compared to 37% for mass marketers, the amount spent is set to increase.

Some 43% of those interviewed said their luxury clients were moving more quickly towards digital advertising than mass market brands, with another third saying they were keeping pace with mass market brands. Three in four of those quizzed expected their luxury clients’ digital budgets would increase. Some 48% said growth would top 10%, 77% predicted growth of more than one percent, and 18% put future growth of 20% or more.

Madansky said: “Luxury brands already know that affluent consumers are spending more time on digital and have become more difficult to reach through traditional media. This study’s intent was to gain a better understanding of what opportunities and issues are top of mind when luxury brands consider marketing to affluent consumers online.”

Asked how they planned to use specific digital formats in 2012, 45% said they would increase their use of rich media, 48% pointed to growth in social, while mobile was up by 68% and video by 69%.

UK retailer Burberry was among the brands singled out as the most effective digital marketers, alongside names including BMW, Chanel, Tiffany, Cartier and Porsche.

The study also found that 85% of brand marketers and agencies believe digital is more effective than TV for driving online sales, and 44% of them believe it is more effective for driving traffic to bricks and mortar stores. Some 80% thought digital was as effective or more effective at driving positive opinions of a brand while 60% thought it was as effective at building brand awareness.

“Overall, while the majority of those surveyed indicated that investment in digital is indeed growing, luxury brand marketers want much better ways to reach affluent consumers on the go,” said Martini Media CEO, Skip Brand. “Those audiences 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 investments, it is an issue.”