Although the cost of living crisis promises an uneasy few months for retailers, luxury brands can think ahead with smart contextual targeting to meet buyers in their moment of interest, writes Artiom Enkov, Head of Insights and Analytics at Nano Interactive.

Luxury brands may be fearing the worst again this holiday season, after a challenging couple of years. Demand for luxury gifts fell dramatically between Christmas 2020 and Christmas 2021, with related online searches down 59% year-on-year*. And you’d be forgiven for thinking this trend might continue in 2022, as the cost-of-living crisis continues to hit the wallets of UK consumers.

But the news is not all negative for luxury retailers and Christmas right now. Retail-focused Bloomberg columnist Andrea Felsted predicts that some Brits will use this Christmas as an opportunity to somewhat make up for the disruption experienced over the last two Christmases, thanks to the pandemic.

For brands, success may just come down to the old cliché of reaching these groups at the right times, in the right places, with the right creative. Where targeting is concerned, new methods outside of the usual cookie-led, audience profiling and ‘retarget across the web’ approach may be considered. Especially when it comes to reaching new luxury intenders, sometimes in unexpected places.

Seizing the moment

The first question that a luxury brand may be asking itself is when is the right time to begin advertising ahead of Christmas? The answer is right now, it would seem: Autumn is the time where demand for gifts often begins to spike, and previous years have seen related content impressions increase by as much as 500% from August to October, before rising another 300% from October to December*. Moreover, eBay Ads found that 32% of the UK will start their Christmas shopping earlier this year than they did in 2021.

In short, luxury brands should already be actively building awareness around their product if they want to feature on Christmas lists in 2022. With the ‘when’ answered, the next question is how to reach potential buyers? Until recently, there was one prevailing answer here: audience targeting – and more to the point, cookies. But the hastening trend of cookie and mobile ad ID deprecation, means that up to half of online audiences may no longer be addressable via these means according to statcounter. And the growing privacy focus among both consumers and legislators worldwide – as well as tech giants like Apple – also cannot be ignored.

Consumers are most receptive to advertising when the creative served to them is both relevant, and appears at the moment they are expressing intent. Live intent signals – including the journey the consumer has taken to reach a web page, as well as the nature of the content they are viewing – can be combined as an effective proxy for luxury product intenders. These signals can be strengthened further with information around the sentiment of the content, as well as previous campaign performance data.

With Apple in particular making privacy a key focus of its own products, this is only likely to keep growing as a trend. And it is notable that no personal data is required when targeting consumers based on context, intent and sentiment. Employing this combination of contextual approaches, without any third-party cookies or other identifiers, presents a viable tactic to reach ABC1 consumers this festive season, without surveilling them.

Building trust through context

For luxury brands, the pool of potential customers is for obvious reasons often a smaller one than for others. This pool is likely to have shrunk even further due to the state of the economy. Luxury brands have to be mindful of advertising to the right people, not only to reduce ad wastage, but also to ensure that a negative perception of their businesses isn’t created.

This takes us back to the ‘how to advertise’ question once again. As an affluent consumer, which is the more likely to alienate you from an advertiser? To view an ad while reading about a related new high-end device on the FT’s How to Spend it pages, or to do so seemingly at random across the web – seeming even to follow you throughout your day?

Targeting consumers in the moment they are showing intent to buy is a key aim of contextual targeting. Whereas audience targeting seems more predominantly focused on the ‘who’, with less ability to account for the ‘when’.  And the former approach – let’s call it moment-based targeting, may in fact improve advertiser brand perception because its messages are timely, without being intrusive.

Staying ahead of the competition

With the hyper-competitive nature of the festive season, and the retail events that surround it – Black Friday, Cyber Monday, and now Amazon’s Prime Early Access Sale (or Prime Day 2), intent targeting also gives luxury brands the opportunity to speak to consumers who are searching for competitors’ products.

Just as brands can buy search ads to reach those researching their competitors, intent targeting can enable a brand to place their advertising around content related to other products or services. This gives advertisers a new opportunity to showcase their own product’s superiority, and capitalise on the consumer’s intent around a similar product.

In the case of search however, keyword pricing can become inflated around specific times – especially sale events. Implementing advanced contextual targeting therefore, particularly while the economy is stretched, should arguably also allow luxury brands an alternative method for reaching niche audiences, without overpaying for them.

With the rise of stronger consumer privacy controls, it now also offers the best hope of delivering on digital advertising’s original promise – of the right message delivered, at the right time, in the right places.

Altogether, the combination of live intent signals, real-time content and sentiment analysis provide a robust mix to power any brand’s digital targeting this festive season.

But why is it so important for luxury brands this Christmas in particular? The answer is quite simple. Starting with, but not limited to Apple users, context offers a method of reaching the affluent parts cookies, user targeting and IDs can no longer reach.