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Luxury fashion brands like Gucci and Louis Vuitton — traditionally
big magazine advertisers — are starting to shift more and more ad
dollars to digital channels, according to The Wall Street Journal.
Globally,
the luxury industry spent over $1 billion on digital ads in 2016, a 63%
increase since 2013, while spending on magazines declined 8% over the
same period, per Zenith.
As ad spending on print continues to
decline, magazines viewed luxury fashion as one the last dependable
categories for ad revenue, but it seems the tides are shifting as
digital becomes the main way people consume content. Here are a few
more observations: |
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| Print
still represents the majority of ad spend for high-end luxury brands.
High-end luxury goods companies selling watches, jewelry and couture
fashion spent 73% of budgets on print ads in 2016, and Zenith expects
that to decline modestly to 72% this year. However, the more accessible
"broad luxury" category, which includes cars, cosmetics, and perfumes,
already spend 30% of budgets on digital channels, and that's set to
increase steadily over the next few years. |
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| Brands
save money with social media exposure. Luxury brands not only reach
mass audiences more cheaply on digital versus print, they can also
spread brand messages organically through social media accounts.
Marketing firm Tribe Dynamics created a metric called "Earned Media
Value," (EMV) which estimates how much brands save through organic
social media posts. The average EMV for the top 10 luxury brands, in
terms of amount saved, was $33 million in March 2017, 33% increase over
last year. |
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| Publishers
have an opportunity to create more fashion-oriented content to
capitalize on the shift. Although brands can certainly save money by
pushing organic posts, they can also capitalize on other
fashion-oriented blogs. This means that publishers have an opportunity
to create more fashion content in the form of online editorials and
videos as ad dollars shift to online channels. |
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| Topic-specific
sites surface better on social media and support
revenue-diversification. Social media sites benefit category-specific
sites over general interest ones. In addition, fashion-oriented digital
properties create an e-commerce opportunity for ad-dependent publishers. |
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| Consumers continue to increase
their time spent consuming digital media, while advertisers continue to
increase their ad budgets into digital channels. |
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