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Social Media Not There Yet As An Advertising Platform For Luxury Goods

Source: https://intelligence.businessinsider.com/welcome

Social media advertising is less effective than traditional media for driving sales of luxury goods and services among wealthier U.S. consumers, according to the Shullman Research Center

Seventy percent of respondents with a household income of $75,000 or greater said they planned to purchase a luxury good or service this year as a result of seeing a social media ad. Magazines had more influence on this income bracket, with 79% of respondents saying print ads would lead them to splurge on a purchase.

But, as income increases, declining proportions of consumers say social media influences will drive their luxury purchases: 40% of consumers with a household income of $250,000, and only 34% of consumers who bring home $500,000 or more. 

The wealthiest consumers say they are most influenced by newspaper and radio ads. 

Why is traditional media more effective than new media? It’s likely due to two related factors:

  1. The highest median income per member of household was among people between the ages of 54 and 64, according to the U.S. Census. But analytics company Pingdom found that people ages 55 to 64 represented just 6% of total social media users in 2012
  2. As such, when brands target young users on social media, they are not necessarily finding the consumers with the deepest pockets, and may be missing opportunities to communicate with relevant older audiences. 

As time goes on, and older and wealthier demographics grow more accustomed to social media, these numbers may shift. For now, social media lags traditional media as a platform for luxury brands.  

Download this chart and data in Excel. 

BII social ad luxury

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Monday, June 24th, 2013 news No Comments

Traditional ads are like homeless marketing – at best you’ve got a glance to get your message across

by: Aoife city womanchile

by: Aoife city womanchile

Homeless marketing – they hold up a sign and hope that passersby will look down, read the sign, then stop, take out their wallet, take some money out, and give it to them.  What’s the probability of that happening?  What are the chances they will even get a glance?  Same thing happens with TV ads, print ads, radio ads, and all forms of traditional push ads.  Where is the value exchange? There is none.

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Tuesday, October 6th, 2009 digital No Comments

The generalization that TV ads are more “helpful” than internet ads is simply false and irresponsible

In the following study published by Harris Interactive and Adweek Media, they show a chart which seemingly shows that TV ads are “most helpful” in making a purchase decision. If you were give the following list of choices —  TV ads, newspaper ads, search engine ads, radio ads, banner ads, and none — and asked to select which was most helpful to your purchase decision; which would you choose? And would you choose that because it was more familiar to you (e.g. TV), seen more frequently, etc. Or is it that banner ads are generally known to be ignored (eye tracking studies show that most users know not to look at the top and right sides of a web page, knowing that banner ads typcially go there).

for new products
where the missing link is simply awareness
TV is very effective
in driving an initial burst of sales
starting pt is zero sales
so if you make people aware
some will buy
11:04 PM in the case of new products
online ads are not great
but you have to break online ads into 2 types
banner ads (push) versus search ads (pull)
search ads are not useful here
because it is a new product and people
wont know to search for it
11:05 PM banner ads may work
because they are for awareness
and they are displayed on pages where people are looking at content
but compared to TV advertising
people have accepted ads as part of the “price” of TV
on the contrary
people have always expected itnernet content to be free
and they have devloped habits to
11:06 PM avoid lokoing at top of page and right side
so banner ads are pretty damn bad at
generating awareness
because people simply dont look
so of the 3
tv ads, banner ads and search ads
tv ads are better in the case of new products where the missing link is awareness
11:07 PM when you get to more established products
the balance changes
the missing link is not awareness
the missing links are further down the funnel
e.g. consideration
modern consumers need more info
they dont just trust an advertiser
and TV ads give them too little info to be useful
11:08 PM banner ads are still ignored just as much as before
but search ads become more important
by looking at what people are searching for
yu know what part of the purch funnel they are at
and what missing link they are trying to solve
so in summary
11:09 PM making the generalization that TV ads are more effective than internet ads is simply false and irresponsible; we must take into account dozens more parameters that impact purchase
decisions


Source: http://www.marketingcharts.com/television/tv-ads-most-helpful-web-banners-most-ignored-9645/


More than one-third of Americans (37%) say that TV ads are most helpful to them in making a purchase decision, while nearly half say they ignore internet banner ads, according to (pdf) a poll from AdWeekMedia and Harris Interactive.

In terms of the helpfulness of ads in other media, newspapers rank second behind TV, with 17% reporting that newspaper ads are most helpful, while 14% say the same about internet search-engine ads:

harris-poll-adweek-media-most-helpful-ads-june-2009.jpg

At the other end of the spectrum, Radio ads (3%) and internet banner ads (1%) are not considered helpful by many people. The poll found also that more than one fourth (28%) of Americans say that none of these types of advertisements are helpful to them in the purchase-decision-making process.

Not surprisingly, the types of ads Americans find helpful vary by age and, slightly, by region:

  • 50% of people ages 18-34 find TV ads most helpful.
  • 31% of those ages 55+ say newspaper ads are most helpful.
  • 40% of Southerners find TV ads most helpful, while only one-third (33%) of Midwesterners feel the same.

Banner Ads Most Ignored
Almost half of Americans (46%) say they ignore internet banner ads, according to the study. Much further down the list of ignored items are internet search engine ads (17% of people ignore), television ads (13%), radio ads (9%), and newspaper ads (6%):

harris-poll-adweek-media-most-helpful-ads-june-20091.jpg

One in ten Americans (9%) say they do not ignore any of these types of ads.

Age and regional differences:

  • 50% of those ages 35-44 and 51% of Midwesterners say they ignore Internet banner ads compared with 43% of 18-34 year olds as well as Easterners and Southerners.
  • 20% of Americans 18-34 years old (20%) say they ignore Internet search engine ads while 20% of those ages 55+ ignore TV ads.

Harris Interactive suggestes that these findings are important because, despite online video and the ability to use a DVR to shift live programming, TV ads remain most helpful to consumers. Conversely, while an internet strategy is essential for a comprehensive ad campaign, banner ads are only considered helpful by a few and are ignored the most, the polling fiirm said.

About the survey: The AdweekMedia/The Harris Poll was conducted online in the US from June 4-8, 2009 among 2,521 adults (ages 18+). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.


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Tuesday, July 28th, 2009 digital No Comments

The new role of the digital agency

The new digital landscape and modern consumers are dramatically different

The new “digital landscape” is dramatically different from the environment into which TV, print, and radio ads were launched no more than two decades ago. Even today’s Web 2.0 environment is different than the Web 1.0 environment of a decade ago. As the Internet led to the more facile accumulation and dissemination of information and as social networks brought even mainstream consumers online, the power of consumers has increased significantly relative to advertisers. For example, they will search for information when they want it and ignore all other forms of interruption media pushed at them. They will look for independent and objective reviews of products or services and distrust brand messages put out by advertisers touting their own virtues. And they will rely on the actions of the community to help them filter and prioritize the best “stuff” from the ocean of available content.

Audience fragmentation caused by the proliferation of niche cable channels (e.g. the fly fishing channel) and abundant online video channels means that “mass media” is not so

“mass” any more — there are no longer massive audiences tuned into a single television

program at the same time. “Media” is now two-way or many-to-many — i.e. consumers tend to talk amongst themselves. But many advertisers and their agencies still rely heavily on one-way tactics – pushing a carefully crafted message out at target customers.


Globalization, information proliferation, and socialization have irreversibly changed industries

Other macro forces are also re-shaping the industries, in particular the advertising, marketing, and communications industries.

Globalization means that, for example, coding can be outsourced to India, graphic design to Australia, or television production to Asia, all at a fraction of the cost of “in-house” resources. The wide availability of tools like online photo editing tools (picnic.com), video editing sites (motionbox.com), and even high-end 3D and special effects software (Blender.org) — all of which are open source and free — fuel the perception that such digital capabilities and services should be lower cost, if not free. These trends mean that agencies whose revenues were derived from these services are facing constant downward pricing pressure.

The proliferation of information has also irreversibly changed the perceptions, behaviors, and habits of consumers. The abundance of information online conditions users to search for information and form their own opinions through research. They also expect more detailed information than can be typically delivered through TV, print, or radio ads — e.g. they want to see the product brochure online, do price comparison shopping across dozens of retailers, and read peer and expert reviews before buying. And they will do the above on their own time (e.g. planning a family cruise vacation at 1 am when the kids are asleep), which destroys the concept of targeting using day-part or show content.

The socialization of consumers online means that the conversations that used to happen among a few people around the watercooler are now happening online for all to see. The collective complaints or praises of products and services now become inputs to many other users doing research online before their next purchase. Furthermore not only is the spread of information much faster online, but the impact could also be dramatically larger —  for example, 1) by the end of opening weekend, hundreds of user reviews of a movie can immediately determine its fate — a mega hit or a “straight-to-DVD” movie, and 2) the action of a single person who found an unsavory clause in AT&T’s Wireless’ “fine print” and posted it online caused such a community uproar that AT&T made a public statement that it would be removed.


Traditional agencies rely on old business models (and other challenges for traditional agencies)

Despite the new landscape conditions of no more mass media and consumers doing their own research online, many advertisers are still doing traditional advertising. And many of their agencies are still relying on old business models (agency of record) and being paid for production. Creative ideas are still being given away for free during the pitch process; if the pitch is won the agency then gets to bill against production of assets. But freely available tools or production and abundant lower cost producers are causing clients to question costs.

Other challenges plague traditional agencies. All clients want to “go digital;” but digital is seen to be a “bolt on” capability among big agencies and smaller agencies are perceived to be more digitally savvy. Further, “clients find it hard to know how much digital stuff costs,” says Peter Cowie, Managing Partner of Oyster Catchers, a search consultancy based in London. “Many clients are using in house capability to save costs and retain control.” Cowie continues, “many clients are deeply insecure about digital marketing” partly because of its novelty, but also, practically because of the wide array of new disciplines, including for example, social networking, mobile, gaming, search, analytics, user interface, Flash, AJAX, e-commerce, online ad networks and media buying, etc.


The new digital agency plays the role of a strategic advisor and subject matter expert

So what is the role an agency can and should play in this new landscape? We believe, the role of a strategic advisor to calm clients’ insecurities and ensure a cogent and smooth incorporation of digital. Smaller agencies that grew up in digital may not have the expertise in traditional disciplines nor a global footprint and enough staff to handle large global clients. However, large traditional agencies, with a few key changes to business model, organizational structure, and internal processes will be able to guide clients through the shift towards digital, by changing the marketing mix and ensuring that all channels are integrated, working together, and reinforcing to each other.

These changes may include 1) managing a network of independent specialists (who serve on SWAT teams for client projects) instead of in-house FTEs, to account for the wide variety of new skills and disciplines 2) shifting away from the business model of being paid for production to being paid for managing a network of geographically disperse low-cost providers, and 3) providing thought leadership as subject matter expert in digital disciplines, strategies, and tactics.

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Wednesday, October 29th, 2008 digital No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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