At a time when the digital landscape is extremely fragmented and the attention of consumers is even more so, it has become even more important to connect the challenges the luxury industry faces with the solutions needed to address them. We speak to some of the industry’s leading marketing and technology experts about how to find the best path forward.
DIGITAL
Attention Recession Has Never Been Higher. What Can Brands Do?
Luxury brands face more competition than ever before in the digital marketing space.
Credit: Photo by Wendy Wei from Pexels.
In an age where having more seems to be better, we are often bombarded through any means of communication that brands can reach us. Newsletters. Daily. Alerts. Hourly.
Social media ads, every few posts on your feed unless you can help it.
We know that there has never been a more competitive time than now to capture the attention of consumers. Yet, what we fail to ask or figure out is how consumers actually want to be communicated with.
It’s not for lack of trying. Global advertising spend is expected to reach $833 billion this year, a year-on-year increase of 5 percent, though Magna, a media investment and intelligence company, did have to revise this down by 1.5 percent due to the uncertain macroeconomic climate. In its latest winter update, Magna also noted that digital advertising sales will grow by 8 percent to reach $557 billion, with digital video expected to be the fastest-growing ad format rising by 11 percent, followed by Search at +10 percent and Social recovering slightly +7 percent.
Now more than ever, brands are reaching out with search ads, video ads, social ads, live streams, collaborations with influencers, collaborations with other brands, and experimenting with short and long-form videos. The list goes on. However, organic reach is eroding according to a 2022 Social Media Industry Benchmark Report from RivalIQ which found that engagement rates on Facebook, Instagram, and Twitter demonstrate social media’s shift towards a pay-to-play space.
“The time that people spend in front of screens is reaching a plateau post-covid,” said Eloïse Bonder, Senior Search Performance Manager at DLG. “As a result, it’s becoming more and more difficult to get their attention as brands have to ensure they make an impact amongst the abundance of advertising messages that audiences are exposed to.”
“The era of attention recession is becoming more competitive,” she added. “There are an increasing number of obstacles for brands to navigate and getting their messaging and timing right is really the key to success.”
The Attention Recession Era
As uncertainty over the current global macroeconomic climate pushes brands to focus more on audiences with higher purchasing power, and GDPR and other privacy laws make customer targeting more complicated for companies and their brands, this results in a higher cost of acquisition. Basically, you have to pay more to get someone’s attention. And this is especially true for HNWIs. Brands already pay more for their attention compared to other audiences, and this rising cost to engage with them is something to consider in 2023.
“It’s becoming harder and harder because the typical consumer is no longer who they used to be,” said Philippe Maurer, Industry Director, Luxury at Teads, the world’s leading video advertising marketplace. “Prospects are all over the place and it’s not always easy to choose the right gateway and messaging to touch all these different profiles.”
And trying to figure out the best marketing plan, whilst navigating the extremely fragmented digital landscape, has never been a one-size fits all approach. But there are ways to ensure that the choices that you do make as a brand are the most effective in reaching your customer, in the way that most resonates with them.
“There are lots of necessary criteria for a campaign or product launch to be successful,” said Bonder. “One of the most recent best practices that we have seen is with Lotus and the launch of their new Eletre car. The variety of assets that they created for the launch was really impressive. The ads were not only focused on brand building and brand desirability but also tailored for performance marketing, meaning that they leveraged the data they had so that they focused specifically on the customers they wanted to target.”
Credit: Courtesy.
Creative Is Critical
Creative is also critical to ensuring your success with customers. You need to maximise the effectiveness of your media by creating compelling content and precise targeting. You also need to adapt what audiences engage with for the short attention span. Meaning if you use the data you have on your customers to personalise your content and adapt it for the audience with which you hope to engage with, this will be key.
“What most people don’t realise is that data can help you create more relevant content,” said Aude Degrassat, International Creative Director at DLG. “You only get one second to make a good impression. The creative should be visually striking and memorable to capture the audience’s attention while keeping brand consistency. Brands should aim to start high and keep their pace quick.”
“Creatives make 2/3 of the media effectiveness,” added Maurer. “It’s therefore extremely important for brands to adapt their creatives according to their campaign KPIs. Length, formats, and engagement are aspects that should always be questioned. It’s also important for brands to remember that nowadays, ad tech platforms give you room to A/B test your creatives while you run your campaign since you can let the AI automatically push the formats that deliver the best performances according to your KPIs.”
The Right Targeting And Attribution
And the last point to consider is that data is everything. It’s one thing to collect data from your customer, but another to understand it and use it to activate your clients through the customer journey. Because beyond what happens online, it’s also equally important to measure your impact beyond the last click and assess the impact from online to offline through Media Mix Attribution.
“The key for luxury brands is to start taking a little distance from the importance of the environment they want to advertise in and have a much stronger focus on the use of data,” said Maurer. “Understanding the demo or the interest segments which are the most responsive to their advertising and building their data is key for any luxury brand to keep moving forward.”
“More and more luxury brands are entering the data game and this will help them be more surgical when it comes to attracting all these different prospects,” he added.
“Messaging, tone of voice, content, and design should be made relevant to your target audience and the product in order to effectively engage them,” said Degrassat. “Interactive ads tend to increase audience engagement, which in turn increases brand recall. When you have a clear call-to-action, communicating what the viewer should do next, for instance, buy, visit a store or website, or watch more videos, it encourages your audience to take action.”
In sum, in order to maximise what you are saying, how you are saying it, and to whom you are saying it, in order to achieve the highest (sales and engagement from customers), there are a number of things you need to consider about that journey.
“We still see many brands creating personas based on gut feelings rather than data,” said Bonder. “This often leads to a misconception of their own audience and ultimately slows down their ROI.”
“Privacy regulations are getting stronger which limit the possibility to do layering targeting and unfortunately, many brands are still behind when it comes to creating “look-a-like” audiences based on CRM data, which has been proven to be more effective than layer targeting, which allows companies to narrow their focus on customers with higher spending power.”
Making sure you understand your audience, making sure the content you put out there is highly creative and engaging, and making sure you’re using the right channels that they are interacting on are just some of the key things brands need to think about. But most important of all, having a very laser focus on how to direct all these efforts towards the specific person you want to target can make the difference between a marketing loss or a worthwhile investment.
If you want to learn more about how to maximise the opportunity of speaking to your clients in the most engaging and cost-effective way, do get in touch with DLG’s experts.
Senior Editor, Luxury Society
Limei Hoang is a senior editor at Luxury Society, based in Geneva. She was formerly an associate editor at the Business of Fashion in London. Previously, Limei spent six years at Reuters as a journalist, and she has also written for the BBC, The Independent, and New Statesman.
DIGITAL
Attention Recession Has Never Been Higher. What Can Brands Do?
Luxury brands face more competition than ever before in the digital marketing space.
Credit : Photo by Wendy Wei from Pexels.
At a time when the digital landscape is extremely fragmented and the attention of consumers is even more so, it has become even more important to connect the challenges the luxury industry faces with the solutions needed to address them. We speak to some of the industry’s leading marketing and technology experts about how to find the best path forward.
In an age where having more seems to be better, we are often bombarded through any means of communication that brands can reach us. Newsletters. Daily. Alerts. Hourly.
Social media ads, every few posts on your feed unless you can help it.
We know that there has never been a more competitive time than now to capture the attention of consumers. Yet, what we fail to ask or figure out is how consumers actually want to be communicated with.
It’s not for lack of trying. Global advertising spend is expected to reach $833 billion this year, a year-on-year increase of 5 percent, though Magna, a media investment and intelligence company, did have to revise this down by 1.5 percent due to the uncertain macroeconomic climate. In its latest winter update, Magna also noted that digital advertising sales will grow by 8 percent to reach $557 billion, with digital video expected to be the fastest-growing ad format rising by 11 percent, followed by Search at +10 percent and Social recovering slightly +7 percent.
Now more than ever, brands are reaching out with search ads, video ads, social ads, live streams, collaborations with influencers, collaborations with other brands, and experimenting with short and long-form videos. The list goes on. However, organic reach is eroding according to a 2022 Social Media Industry Benchmark Report from RivalIQ which found that engagement rates on Facebook, Instagram, and Twitter demonstrate social media’s shift towards a pay-to-play space.
“The time that people spend in front of screens is reaching a plateau post-covid,” said Eloïse Bonder, Senior Search Performance Manager at DLG. “As a result, it’s becoming more and more difficult to get their attention as brands have to ensure they make an impact amongst the abundance of advertising messages that audiences are exposed to.”
“The era of attention recession is becoming more competitive,” she added. “There are an increasing number of obstacles for brands to navigate and getting their messaging and timing right is really the key to success.”
The Attention Recession Era
As uncertainty over the current global macroeconomic climate pushes brands to focus more on audiences with higher purchasing power, and GDPR and other privacy laws make customer targeting more complicated for companies and their brands, this results in a higher cost of acquisition. Basically, you have to pay more to get someone’s attention. And this is especially true for HNWIs. Brands already pay more for their attention compared to other audiences, and this rising cost to engage with them is something to consider in 2023.
“It’s becoming harder and harder because the typical consumer is no longer who they used to be,” said Philippe Maurer, Industry Director, Luxury at Teads, the world’s leading video advertising marketplace. “Prospects are all over the place and it’s not always easy to choose the right gateway and messaging to touch all these different profiles.”
And trying to figure out the best marketing plan, whilst navigating the extremely fragmented digital landscape, has never been a one-size fits all approach. But there are ways to ensure that the choices that you do make as a brand are the most effective in reaching your customer, in the way that most resonates with them.
“There are lots of necessary criteria for a campaign or product launch to be successful,” said Bonder. “One of the most recent best practices that we have seen is with Lotus and the launch of their new Eletre car. The variety of assets that they created for the launch was really impressive. The ads were not only focused on brand building and brand desirability but also tailored for performance marketing, meaning that they leveraged the data they had so that they focused specifically on the customers they wanted to target.”
Credit: Courtesy.
Creative Is Critical
Creative is also critical to ensuring your success with customers. You need to maximise the effectiveness of your media by creating compelling content and precise targeting. You also need to adapt what audiences engage with for the short attention span. Meaning if you use the data you have on your customers to personalise your content and adapt it for the audience with which you hope to engage with, this will be key.
“What most people don’t realise is that data can help you create more relevant content,” said Aude Degrassat, International Creative Director at DLG. “You only get one second to make a good impression. The creative should be visually striking and memorable to capture the audience’s attention while keeping brand consistency. Brands should aim to start high and keep their pace quick.”
“Creatives make 2/3 of the media effectiveness,” added Maurer. “It’s therefore extremely important for brands to adapt their creatives according to their campaign KPIs. Length, formats, and engagement are aspects that should always be questioned. It’s also important for brands to remember that nowadays, ad tech platforms give you room to A/B test your creatives while you run your campaign since you can let the AI automatically push the formats that deliver the best performances according to your KPIs.”
The Right Targeting And Attribution
And the last point to consider is that data is everything. It’s one thing to collect data from your customer, but another to understand it and use it to activate your clients through the customer journey. Because beyond what happens online, it’s also equally important to measure your impact beyond the last click and assess the impact from online to offline through Media Mix Attribution.
“The key for luxury brands is to start taking a little distance from the importance of the environment they want to advertise in and have a much stronger focus on the use of data,” said Maurer. “Understanding the demo or the interest segments which are the most responsive to their advertising and building their data is key for any luxury brand to keep moving forward.”
“More and more luxury brands are entering the data game and this will help them be more surgical when it comes to attracting all these different prospects,” he added.
“Messaging, tone of voice, content, and design should be made relevant to your target audience and the product in order to effectively engage them,” said Degrassat. “Interactive ads tend to increase audience engagement, which in turn increases brand recall. When you have a clear call-to-action, communicating what the viewer should do next, for instance, buy, visit a store or website, or watch more videos, it encourages your audience to take action.”
In sum, in order to maximise what you are saying, how you are saying it, and to whom you are saying it, in order to achieve the highest (sales and engagement from customers), there are a number of things you need to consider about that journey.
“We still see many brands creating personas based on gut feelings rather than data,” said Bonder. “This often leads to a misconception of their own audience and ultimately slows down their ROI.”
“Privacy regulations are getting stronger which limit the possibility to do layering targeting and unfortunately, many brands are still behind when it comes to creating “look-a-like” audiences based on CRM data, which has been proven to be more effective than layer targeting, which allows companies to narrow their focus on customers with higher spending power.”
Making sure you understand your audience, making sure the content you put out there is highly creative and engaging, and making sure you’re using the right channels that they are interacting on are just some of the key things brands need to think about. But most important of all, having a very laser focus on how to direct all these efforts towards the specific person you want to target can make the difference between a marketing loss or a worthwhile investment.
If you want to learn more about how to maximise the opportunity of speaking to your clients in the most engaging and cost-effective way, do get in touch with DLG’s experts.
Senior Editor, Luxury Society
Limei Hoang is a senior editor at Luxury Society, based in Geneva. She was formerly an associate editor at the Business of Fashion in London. Previously, Limei spent six years at Reuters as a journalist, and she has also written for the BBC, The Independent, and New Statesman.
