Despite lagging behind the wider advertising market, luxury goods manufacturers are starting to take a leaf out of their peers’ book, and invest increasing amounts of their ad dollars in digital at the expense of offline channels, according to Zenith Optimedia.
The insights were revealed in the latest Luxury Advertising Expenditure Forecast published today (31 May), where the Publicis Groupe outfit forecast that digital will be the largest luxury advertising medium in 2017, overtaking print and TV, accounting for 32.1 per cent of total spend by such brands.
“Digital advertising is by far the biggest contributor to the growth in luxury advertising, growing consistently at double‐digit rates,” reads the report. “We expect digital media ad spend by luxury advertisers to increase by $837m between 2015 and 2017.”
By comparison, the same period will see luxury brands increase their media spend on television, radio and cinema will increase by a total of $26m collectively. Meanwhile, outdoor will shrink by $10m; and print will shrink by $150m.
By 2017, print will account for 28.6 per cent of total luxury ad spend, down from 31.9 per cent in 2015. TV’s market‐share will also decline over the same period, from 32.7 per cent in 2015 to 30.7 per cent in 2017.
However, despite all this, print will remain the most important medium for ‘high luxury’ advertisers Despite its decline in market‐share, print remains particularly important to luxury advertisers, specifically those in the fashion and accessories and watches and jewellery sub‐categories.
For instance, in 2015, fashion and accessories advertisers spent 83 per cent of their budgets in print, and watches and jewellery advertisers spent 60 per cent. Print titles – especially glossy magazines – provide high‐quality, immersive yet relaxed reading experiences, a particularly suitable environment for luxury advertisers wishing to showcase their brand values, according to Zenith.
The report also highlights how luxury advertising is growing less rapidly than the wider advertising market as a whole. Across its top 18 markets, luxury advertising grew 1.9 per cent in 2015 (compared to 4.1 per cent of the wider market).
“We forecast this underperformance to continue, with luxury advertising growing 3.0 per cent in 2016 compared to 4.5 per cent growth across all categories,” reads the report.