Luxury Brand’s challenge: Digital Advertising

Luxury Brand’s challenge: Digital Advertising

The advertising of the luxury sector is making the move to digital media, and this is reflected in the investment of the brands. 33% of the advertising of luxury brands has been digital this year, taking into account an increase of 7% compared to 2017.

According to the Luxury Advertising Expenditure Forecasts 2018, published by Zenith, hospitality is at the top of the ranking and its advertising investment is already 50%. It is precisely the clients of the luxury hotel trade who carry out most of their searches through the network.

This report analyzes advertising investment, using historical data and future forecasts in 23 relevant markets for the luxury sector. Zenith’s forecasts that luxury car brands will spend 39%, watches and jewelry 28%, fragrances and beauty 27% and fashion and accessories13%. The largest advertising markets in the sector are the US and China, the most advanced for advertisers. It is expected that in 2019 68% of digital investment will be achieved. This growth is driving eCommerce, through platforms such as Alibaba’


However, luxury brands have lagged behind when it comes to implementing digital advertising in their communication plans. In fact, advertisers of all categories invested 39% of their budgets in digital advertising in 2017, 9% more than the luxury sector. This difference will continue in 2019, and an investment of 42% of the advertisers of general categories is expected, as opposed to 33% of luxury.

There is a certain skepticism regarding the digital environment, caused by the limitation of advertising formats, with an improper quality for brands in this category. However, the new advertising formats, private marketplaces and deals have contributed to the luxury sector finding more suitable contexts. Younger consumers value experiences more than material luxury, so advertisers struggle to adapt to their preferences.