Luxury Ad Dollars Moving From TV to Online Video

August 27, 2012

martinimedia-shift-luxury-ad-dollars-tv-online-video-august2012.pngLuxury brands plan to ramp up spending on online video and rich media at the expense of traditional media (e.g., magazine and TV ads), per findings [pdf] from an August 2012 study by Martini Media, in partnership with Digiday. Some 14% of agency respondents described the amount of money their luxury clients will shift from TV to online video advertising in the coming year as “material.”

Another 43% plan to shift some luxury advertising dollars from TV to online video, while 35% reported they will experiment with online video.

Luxury Brands Lag Mainstream In Digital Spending

While agency executives estimate that 37% of mass marketers’ branding dollars are spent in digital marketing, they estimate only 31% of luxury marketers’ budgets are spent on digital, as data from “Engaging The Affluent Online: How Luxury Brands Are Leveraging Digital Marketing To Connect With Customers” reveals. Still, 43% of survey respondents report that their luxury clients are moving into digital advertising more rapidly than are mass market brands, and another third of agencies believe those brands are moving into digital at the same pace.

77% of the luxury advertisers themselves anticipate growth in digital spending in 2012. 48% forecast growth of 10% or more, while 18% anticipate growth of 20% or more. A general shift in marketing dollars from traditional to digital media has been well documented recently.

Video, Mobile Lead Digital Growth

When asked how they anticipate leveraging digital formats, 69% of agency respondents expect their clients to increase spending on video, and 68% expect them to increase spending on mobile. Another 48% expect to ramp up spending on social media ads, followed by rich media (45%), search (29%), standard display (18%), and connected TV/IPTV (10%).

Digital Said More Effective Than TV In Driving Online Sales

85% of advertisers and agencies perceive digital advertising to be more effective than TV for driving online sales, although a survey from ExactTarget, released in April 2012 found that online consumers were far more likely to say that TV ads (53%) had driven them to a purchase in the prior 12 months than any other type of ad. (The report did not specify how that purchase was made.)

Meanwhile, among the Martini Media respondents, 44% believe digital to be more effective than TV in driving traffic to brick-and-mortar stores. 35% find digital advertising more effective than TV at building brand favorability, although just 18% believe digital is more effective for building awareness.

7 in 10 luxury marketers believe that high-impact digital ad units can “break through” as much as print or TV ads. 55% agree that sound, sight and motion are necessary to showcase luxury items, and 72% agree that standard online banner ads do not do their products justice.

Other Findings:

  • 83% of luxury marketers agree that it is worth paying premium cost-per-thousand-impressions (CPMs) for specific sites to reach luxury consumers.
  • 87% of marketers believe luxury consumers visit a variety of sites related to their passion areas, and that they can reach those consumers through an ad network.

About The Data: Martini Media surveyed Digiday readers over a six-week period in July and August 2012, as well as Martini Media prospects and clients. Close to 400 digital marketing professionals responded, 345 of whom had luxury brand or client experience.

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