Brazil. Video. Ecommerce. Politics. Gapminder.org - For a fact based world view. Understanding Luxury Brands and Social Media. Samir Balwani is an emerging technology strategist at Morpheus Media, a firm specializing in Social Marketing, SEM, and SEO. You can follow him on Twitter @samirbalwani and get his newsletter. One of the biggest misconceptions by brand managers is that the web is not a luxury market.
The truth is that people are spending more money online and it's a place luxury brands must build a presence. However, most have a nagging fear of ruining their brand reputation. So, how can luxury brands engage in social media? The Luxury Market Online Before we answer the previous question, let's define the luxury market. "...within the scope of socio-psychology as a result of its connection to a culture, state of being and lifestyle, whether it is personal or collective. So, brands with scarce products and high prices must find a way to find consumers online. In November 2007, eMarketer published a report titled "Affluent Internet Users: How the Rich Live Online. " Problems With Luxury Brands Online 1. Report: Twitter still 'missed opportunity' for Fortune.
A new report from global public relations firm Weber Shandwick has found that when it comes to Fortune 100 companies, they just don't get Twitter...not yet anyway. According to the study (PDF), which looked at how the world's 100 top companies used Twitter between late August and early September, the companies have a grand total of 540 Twitter accounts owned by just 73 companies; 27 firms don't participate in the microblogging tool/social network. Some 76 percent of those 540 accounts weren't "updated often" and 52 percent were not actively engaged, as measured by the accounts' use of hash tags, links, references, and retweets. Weber Shandwick contends that in order for a company to be successful on Twitter, it needs to engage users through five basic activities: listening to followers, participating in conversations, updating accounts frequently, replying to questions, and retweeting useful messages.
Weber Shandwick also offered a word of caution. Gen Y Holds Tight to E-Mail and Texting. Newspapers may be reporting on the demise of e-mail, and some research indicates that young people are turning more toward social networking than more traditional online communication, but college students still see e-mail as a critical medium for messages. More than one-quarter of college students told the Participatory Marketing Network and Pace University’s Lubin School of Business’ IDM Lab that e-mail was the activity they were least likely to give up for a week—far ahead of the 9% who said they couldn’t live without social networks.
“These results may be surprising to some, but not if you consider the role email continues to play in the day-to-day lives of Gen Y,” said Michael Della Penna, PMN co-founder and executive chairman, in a statement. “As long as email remains the collection point for social networking updates, including alerts around new followers, discussion updates and friend requests, it will remain a powerful force in marketing and our lives.” Previous Article. Americans Want Brands that Inform. The top characteristic US consumers want from brands they like is to improve their knowledge—and the least desirable one is for a brand to “only be visible in store”—according to the “Global Web Index” from Lightspeed Research. Helping consumers keep up to date on topics that were important to them was also key, followed by being entertaining, becoming part of a daily routine, and informing consumers about the product and the company.
Consumers were relatively uninterested in brands that tried to act like their friends. Unsurprisingly in a difficult economy, consumers said the most relevant thing a brand could do for them was offer discounts. That topped various social and creative efforts such as online communities and brand-created video or TV programs. Word-of-mouth was the No. 1 purchase driver according to the surveyed consumers. Face-to-face recommendations had significantly more weight with respondents than TV ads, advice from online friends, e-mails or Websites.
Bigger Banners, Richer Media. According to Eyeblaster’s “Global Benchmark Report 2009,” increasing ad size is not necessarily the best way to boost performance. The company found that for banner ads, where size is the main component of ad visibility, bigger is generally better. But rich media ads such as expandable banners and floating ads saw improved results from different creative, rather than larger size. Rich media ads, according to the report, “have more ‘dimensions’ than two—pixels are augmented by flash, video and expansions that catches the users’ attention. Therefore in Rich Media, size portrays only a part of the performance picture.” Video, for example, improved performance significantly for most rich media ads, by 71% overall. Eyeblaster found that expandable strips had the highest interaction rate of any rich media format, followed by expandable banners.
User interactions with advertisements varied widely across industries, as well. Keep up on the latest digital trends. Factors Behind eMarketer’s Revised Online Ad Forecast - eMarkete. eMarketer has revised its US online ad spending forecast downward, predicting 2009 spending of $22.8 billion. Online ad spending for the first half of the year decreased by 5.3%, according to reported results from the Interactive Advertising Bureau and PricewaterhouseCoopers, eMarketer’s benchmark. Indications—such as relatively strong Q3 results from Google—suggest an increase in search spending. Even in down years, second-half growth is stronger. eMarketer predicts a smaller second-half 2009 decrease of 2.9%, which will mean a decline of 2.9% for the year.
(Note that 52% of 2009 spending will occur in the second half of the year.) Moderate growth will pick up again in 2010 and 2011, with spending projected to rise 5.9% and 6.6%, respectively. 2012 will see double-digit growth, due to the presidential election and economic stabilization, but slightly lower rates of increase will resume in 2013. Overall, many major advertisers are still looking for a way into online advertising. Understanding Consumer Preferences.
Multichannel campaigns will find greater success when marketers are aware of consumer preferences and behaviors. That finding, from a Forrester Consulting study commissioned by ExactTarget, should not come as a surprise. But marketers may be ignoring its implications. Just 32% of marketing decision-makers surveyed in July 2009 said they knew how their customers behaved across channels, and only 37% were aware of consumers’ channel preferences. In June, ExactTarget found in its “2009 Channel Preferences Survey” that Americans’ opinions about permission marketing were changing. Respondents’ preference for e-mail and text messaging was greater than the year before, and direct mail was losing ground fast. Now, consumers choose e-mail at a rate of three-to-one over any other channel for marketing communications. But permission is key. In spite of Web users’ increased use of social networks for written communication, they were not very open to receiving marketing messages through such sites.
Online Spending Passes TV in UK. Online ad spending has been fortunate in the economic downturn—recession-resistant due to its high level of accountability, Internet ad revenue growth has remained positive as spending in all other media dropped. In the UK, the effect has been so dramatic that online took the biggest slice of advertising revenues in the first half of 2009.
Research from the Internet Advertising Bureau UK (IAB UK), PricewaterhouseCoopers (PwC) and the World Advertising Research Centre (WARC) put online revenues at 23.5% of the total from January to June, 1.6 percentage points ahead of TV. This makes the UK the first major economy to see online spending overtake television. “Internet advertising has beaten all expectations to achieve growth in the most challenging market conditions,” said Guy Phillipson, chief executive of the IAB UK, in a statement. “Online display has performed notably well against its peers in TV, print and radio despite more than £1.5 billion being wiped off the advertising industry.” Behavioral Targeting Misses Mark. Despite the concerns of some consumers and privacy advocates, marketers have defended behavioral targeting on the basis that Internet users would prefer to look at relevant advertisements and offers. But a study from researchers at the Annenberg School for Communication, University of California Berkeley School of Law and the Annenberg Public Policy Center reports just the opposite.
“Contrary to what many marketers claim, most adult Americans (66%) do not want marketers to tailor advertisements to their interests,” according to the paper. “Moreover, when Americans are informed of three common ways that marketers gather data about people in order to tailor ads, even higher percentages— between 73% and 86%—say they would not want such advertising.” Respondents showed somewhat more interest in receiving personalized discounts and news, but still, less than one-half of Americans wanted any tailored Web content at all. Several earlier studies reached different conclusions. Social Radar: Apple, Microsoft Are Top Social-Media Kingpins - A. Women Rule the Social Web. ...at least according to an infographic by Information is Beautiful. The stats, compiled by Brian Solis from Google Ad Planner data, show that equal numbers of men and women use sites like LinkedIn, DeviantArt and YouTube.
When it comes to sites like Flickr, Facebook, Twitter, FriendFeed, MySpace and Bebo, however, women outnumber men. In fact, there's only one major holdout for men on the social web: social news site Digg, where 64% of users are male. That the Digg population is largely male should come as no surprise, but what about the other stats? Are women just more social in general, or is there some other explanation? [Image Credit: lisibo] Online Measurement: 16% of the Web Clicking Display Ads - Advert. Social Site Users Depend on Their Networks. Social networking is one of the most important activities—online and offline—among US social network users, based on results of Beresford Research’s “Use of Online Social Networks” white paper. Among online activities, only e-mail was more popular than social networking. Chatting and even Web browsing ranked lower. When asked to compare online social networking with several offline activities, social network users only found going out with friends more important.
That put social networking ahead of real-life activities such as playing games, reading, watching TV and playing sports. Beresford reported that posting photos was the top social networking activity, with 81% of respondents taking part, followed by responding to the posts of others and posting their own thoughts or activities. One-quarter linked to a company, product or service on a social network, and, notably, 38% reported clicking on paid advertisements.
Users put great trust in their social networks. Ad Dollars Flood to Social Nets. The Nielsen Company reports Internet users increased the time they spent on social networks by a substantial margin in August 2009. The sites took up 17% of all time spent on the Web in August, up from just 6% the prior year. Meanwhile, advertising spending on the top social networking and blogging sites more than doubled, jumping from $49 million in August 2008 to about $108 million in August 2009. “In the past, advertisers had significant concerns with social media advertising,” said Jon Gibs, vice president, media and agency insights, Nielsen’s online division. “The considerable increases we’ve seen in ad spending over the past year suggest that many of these concerns have subsided or been addressed.” The entertainment industry led the charge, with 812% year-over-year growth in social network ad spending. Keep up on the latest digital trends.
Learn more about an eMarketer Total Access subscription, today. Check out today’s other article, “Online’s Slice of Ad Spending Grows Worldwide.” Online’s Slice of Ad Spending Grows Worldwide. Online ad spending forecasts from GroupM put digital spending at 17% of total US ad spending in 2010, up from 15.4% this year and 13.9% in 2008. The “Interaction 2009” report predicts 4% growth in US online ad spending in 2009, to $22.77 billion. Growth will ramp up to 7% next year. Worldwide, online spending is expected to climb 9% in 2009, returning to double-digit growth in 2010.
The rise in worldwide spending to $58.17 billion this year will mean online takes 13.2% of total ad dollars. GroupM predicts that share will increase to 14.6% in 2010. According to the report, spending increases on search and mobile, along with the declining spending in traditional media, are fueling the gains online. GroupM found Internet spending outperformed all other media channels during the recession. “Search is a critical component of paid media, but a tipping point has been reached,” said Rob Norman, CEO of GroupM Interaction.
Mr. Keep up on the latest digital trends. Online Helps Marketers Do More with Less. The harsh reality of marketing in a recession: Three-quarters of marketers had their budgets cut this year, and two-thirds were expected to drive more sales with an equal or lesser budget, according to the “2009 ANA/MMA Marketing Accountability Survey” from the Association of National Advertisers and Marketing Management Analytics. The No. 1 strategy for marketers who wanted to improve effectiveness without spending more, according to the June 2009 poll, was shifting from traditional to digital media. More than one-half of respondents also reported shifting spending away from brand-building initiatives, and 38% were putting more spending into lower-cost media. Almost four in 10 respondents reported that senior management considered marketing “an expense,” but more saw marketing costs as investments in their brand.
Although many respondents expect their budget for 2010 to increase (36%), accountability efforts are here to stay. Keep up on the latest digital trends. The Web Analytics Headache. To prove the success of their campaigns, marketers need analytics. But many report frustration with understanding and using the Web analytics tools necessary to prove their success to management, according to “The Web Analytics War Reader Survey” by Unica. The biggest challenge for marketers was integrating Web analytics with other marketing solutions, cited by 46% of respondents. Verifying the accuracy of data was a problem for 41% of marketers, while 32% reported trouble with analytics that were not comprehensive and 29% complained of budgets that were too small. What makes analytics accuracy hard to verify? An inability to drill down into the data bothered 42% of respondents. While difficulty using analytics tools frustrates many marketers, they also recognize the need for more resources and expertise.
Keep up on the latest digital trends. Check out today’s other article, “Women More Cautious About Spending.” Social Media Measurement Lags Adoption. Demographics of Facebook Growth. Are Women Really Ignoring Social Network Marketing? Media Dollars Shift to Digital in Downturn. Measuring the Business Effects of Web 2.0.
Executives and Social Media. Display Campaigns Boost Search Effectiveness. Internet Radio Revs Up. Social Network Marketing Expands Sphere. Digital Screens Energize Outdoor Media.