Luxury brands to boost digital spend

27 August 2012

NEW YORK: Luxury goods firms are boosting their digital adspend in the US, and many believe this channel outperforms television commercials on several key metrics, a study has found.

Digiday and Martini Media, the publishing groups, polled 345 executives representing high-end brands like Aston Martin, Godiva, Jaguar and Virgin Airlines, and agencies with clients in this sector.

In all, 77% of the panel agreed manufacturers would increase their new media budgets in 2012. More specifically, 48% suggested expenditure levels should rise by at least 10% and 18% pegged this expansion at a minimum of 20%.

Some 43% of interviewees concurred that premium goods firms were adopting digital advertising more rapidly than mass market peers, and around 33% thought they were progressing at the same pace.

According to the study's client-side contributors, a 31% share of their branding budget is allocated to this channel at present, a figure which agency respondents placed at 37%.

The marketers also stated that display currently received 26% of their digital expenditure, with social media on 22%, online video on 16% and mobile on 11%. Agencies, however, reported that the share held by social media was just 10%.

Slightly over two-thirds of participants anticipated making greater use of internet video and mobile this year, as did more than four in ten for social and rich media.

An additional 85% of the sample said internet advertising was more effective than the TV equivalent for fuelling online sales, and 9% argued they were equally matched.

With regard to driving traffic to bricks and mortar stores, 44% of the panel asserted that web ads boasted the advantage, and 26% perceived TV spots as having a higher degree of efficiency.

Elsewhere, 35% gave the net the upper hand for building brand favourability, beating television on 26%. By contrast, these totals stood at 18% and 41% for enhancing awareness scores.

Similarly, 71% of those surveyed thought high-impact online ad units offered the same cut through as print and TV advertising.

An additional 53% stated video was the best way to showcase luxury lines on the web, and 62% believed online banners did not adequately achieve such a goal.

When measuring the success of online campaigns, 94% of firms used clickthroughs, 80% tracked interactions with ads, while 76% monitored dwell time and 61% looked at the sales generated.

Data sourced from Martini Media; additional content by Warc staff