Luxury Brands Increase Digital Ad Spend by 100% in Hong Kong

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Luxury brands in Hong Kong are seeing the value of online advertising with companies like Cartier, Burberry, and BMW increasing digital ad spend at more than 100 percent year-on-year for 2011, according to a report.

The report by Starcom Mediavest and local research firm AdMango also forecasts that online ad spend in the jewellery and watches category is expected to increase by 20 to 30 percent in 2012.

The luxury sector typically prefers advertising on traditional media such as glossy and in-flight magazines, newspapers, and TV. Alfred Tsoi, VP and MD at Yahoo Hong Kong said he's noticed luxury brands are "lining up" to buy display on Yahoo's home page over the past 12 months.

His sales team no longer needs to convince luxury brands why they should buy ads online but now explain to them how to advertise on its portal and sometimes even how to do it better than their competitors, he added.

Using Van Cleef & Arpels as an example, he shared how the luxury brand spent its entire promotional budget on Yahoo to raise awareness of the grand opening of its new shop.

Case Study: Van Cleef & Arpels

To raise brand awareness, Van Cleef & Arpels bought an exclusive display ad on Yahoo's homepage, including a billboard ad on its email property log-in page and on mobile.

Additionally, Van Cleef & Arpels bought a magazine ad on Yahoo Style page and committed to an advertorial series that featured videos and background featuring the brand in three languages: English, Traditional and Simplified Chinese.

Tsoi did not share the display campaign's success metrics except to say that his client is satisfied with the results.

Other brands that experimented with rich media ads particularly video included Piaget Altiplano and Samsung for its Galaxy tablet.

To localise for the Hong Kong market and its understanding of local culture, Yahoo has created a brand pronunciation tool of more than 1,100 brand names from fashion, beauty, jewellery, and watches to wine that is scheduled to launch later this month.

While the tool is intended for local consumers with no commercial opportunities in mind, Tsoi said it has already secured a sponsorship for the page.

A mock-up of how the pronunciation tool looks like.

Following the success of Yahoo Deals, the company is in the process of launching a mobile app that allows its members to purchase directly from their smartphones.

Meanwhile, another study by Millward Brown found that North Asia content site campaigns such as Yahoo have a stronger branded impact with more than 60 percent uplift in brand awareness and brand favourability as well as 90 percent purchase intent compared with global results.

Chris Maier, director of digital and media solutions for Greater China explained this is because Internet users in North Asia are less desensitised to online advertising and they enjoy branded entertainment more.

The study also revealed that content sites impact brand favourability and purchase intent most when using online video.

When it comes to the video formats, repurposed TV videos are more effective than made-for-web videos for online brand awareness while made-for-web videos influenced audience persuasion more through brand favourability and purchase intent and consideration.