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What's Next for Luxury Brands Online?

  |  August 30, 2012   |  Comments

Do brands honestly expect consumers to buy when they aren't willing to put any effort into selling?

About a dozen years ago, I worked as an advertising coordinator for a high-end women's fashion magazine. It counted among its advertisers all of the upscale brands, and their marketers didn't spare any expense to wow readers with luxury watches, jewelry, makeup, and apparel laid out in gorgeous glossy print.

It was a different story online. Back then, most luxury brand sites were little more than digitized double-page spreads, and if you were to come across a banner for a luxury product you can bet it was static and bland. It was ages before fashion and beauty marketers acknowledged the extent to which affluent consumers were spending time online, and even longer before they began to allocate their ad budgets accordingly.

Last week, online ad network Martini Media - known for reaching affluent consumers through sites like The Washington Times, Salon.com, Fodor's, and Kiplinger - in conjunction with media company Digiday released a new ad spending report revealing that luxury brands are spending only 31 percent of their overall ad budgets online. Agencies and brand marketers alike spend close to 30 percent of that budget on display ads, between 13 and 16 percent on video, and 11 percent on mobile, with social media coming in fourth place (agencies say they spend just 10 percent of their luxury clients' money on this, while brand marketers spend up to 22 percent).

This isn't particularly surprising. Even in recent years luxury brands have shied away from online advertising because of the challenges inherent to reaching a significant volume of high-income consumers, and the limitations of small display formats. Now that affluent consumers make up a sizeable portion of the web audience and larger, more interactive ad units allow for more striking ads, however, luxury spending is finally poised to turn around. According to Martini Media, nearly 70 percent of luxury marketers plan to increase their spending on video and mobile media this year compared with last, and almost 50 percent plan to do the same with social and rich media. In fact, 70 percent say that "high-impact (online) ad units" can "break through" as well as television ads…and print.


As promising as this data appears to be, the web shows evidence that luxury advertisers are still slow to accept online ad functionality. Why? With online video and units like AOL's Project Devil at their disposal, shouldn't more brands be jumping at the chance to showcase their products in a creative way online? Spend some time on fashion and beauty sites and you'll find a dearth of interactive ads. While an online brand like Zappos promotes its luxury labels with inventive in-banner galleries showcasing seasonal wares, some of the most coveted beauty products and handbags on earth are running static banners with a "shop now" call-to-action circa 2002. Shouldn't the quality of their products be reflected in the quality of their ads? Do brands honestly expect consumers to buy when they aren't willing to put any effort into selling?


Martini Media is right: the tide has turned for luxury digital marketing, but don't expect progress to affect ad spending alone. If luxury brands really want to embrace online media, they'll have to do it with their ad creative. Brands that are willing to pay a premium CPM in order to attain access to an affluent online audience should create the ads to match, because just as consumers expect a lot from their products, they'll expect a lot from their online campaigns. Use video and audio. Personalize. Create exceptional online experiences worthy of an exceptional luxury brand. Follow the trail blazed by luxury verticals like automotive, and amaze audiences with your creativity.

Now is the time to show consumers what luxury brands can do. Those glossy print ads? Those were just the beginning.

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Tessa Wegert

Tessa Wegert is a business reporter and former media strategist specializing in digital. In addition to writing for ClickZ since 2002, she has contributed to such publications as USA Today, Marketing Magazine, Mashable, and The Globe and Mail. Tessa manages marketing and communications for Enlighten, one of the first full-service digital marketing strategy agencies servicing such brands as Bioré, Food Network, illy, and Hunter Douglas. She has been working in online media since 1999.

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