The Luxury Letter Blog

Adcision’s 2009 Predictions
December 9, 2008, 2:44 pm
Filed under: Uncategorized

by Hibben Silvo, Editor

2009 is going to be big on two things: unknowns and opportunities. 2008 has been a challenging year and 2009 is upon us with plenty of question marks and furrowed brows. To help with this, the best course of action is to develop solid educated guesses, better known as predictions. To get the ball rolling Adcision Luxury Media, a luxury oriented online advertising agency and publisher representation firm, and the publishers of this e-newsletter, have developed our own. We hope that these encourage our readers to think outside the box and help to provide encouragement in these difficult economic times.

Adcision has asked several industry experts to weigh in on our predictions including: Melissa Vigo (Sapient), Amanda Ross (Vivre), Michael Keaveny (Razorfish), Adam Broitman (Crayon), Meryl Macune (Estee Lauder Companies), Rebecca Matt (Morpheus Media). Read their reactions to our bold predictions below and leave your own 2-cents:

1. 2009 is the year for Online Luxury Advertising: Despite an overall decrease in online display advertising, luxury brands/services will fare better than other markets. With loyal clientele and 56% of millionaires preferring to shop on a retailer’s website, luxury online advertising will endure (Shopping Secrets of American Millionaires, Media post).

2. Old School Online Advertising Meets New School Online Advertising: Social media, Web 2.0, and viral marketing campaigns will partner with traditional display advertising for more effective and well rounded campaigns

3. Obama will inspire more than just political change: The success of Obama’s use of online promotion will inspire those not already participating in online advertising to jump on the bandwagon and those already running campaigns to increase their online budgets

4. Beauty isn’t just skin deep: A new emphasis will be placed on the creative and being creative. Simple display advertising will no longer be enough; campaigns must be both attractive, eye catching and well planned from placement, to creative to how the entire campaign comes together

We asked people in the industry to offer their opinions on our predictions based on their own personal experience and got some great responses. Below are a few of their insights:

1. Do you agree/disagree with these predictions? Which ones in particular?

Adam Broitman, Director of Strategy at Crayon and Author of A Media Circus

“There are generally two types of luxury shoppers (at a very high level)—the undeniably affluent and the aspirational. It is hard to say if luxury marketers will see significant growth online, as the category may experience a drop in spending by the aspirational segment. With that in mind, there is no doubt that spending in this segment will grow, as it should follow internet adoption trends—which is led (to a large degree) by those individuals with above average means. “

“I have every confidence that all marketers will be much more aware of the impact of social media in 2009. My prediction is that, by the end of 2009 most marketers will have dipped their toes in the water, and will have learned a few lessons:

· Social Media is not a strategy unto itself—it is a part of a 360 holistic, integrated strategy
· Content leads to conversation—if you don’t give people something to talk about, they will not talk
· Social web strategy needs to be distributed—you can’t just place a banner on Facebook, or build social elements to your site. You need to do both; all in the name of an overarching strategy

Ultimately all media is social. By mid 2010, social media will be an integral part of all marketing campaigns (including traditional marketing) for all seasoned marketers.”

Melissa Vigo, Associate Media Director at Sapient
“I would have to agree with all of the predictions stated above. I highly agree with the prediction of “beauty isn’t just skin deep.” It’s all about the “first impression” when you see an ad. If it interests a consumer and they can relate to it, then they’ll interact with your brand. “

Amanda Ross, Senior Online Marketing Manager for Vivre
“I agree with all of the statements…with the economy, etc, businesses will need to turn to the more cost effective media of the online channel, as well as really begin to penetrate the mobile and smartphone marketing space. Furthermore, working in the online space for over 6 years now, I agree with the new school advertising model as taking precedence, as the internet has become an oversaturated commodity and people are hungry for innovation, personalization, and intelligent communication.”

Susan Adams, President of Fractional Sales Solutions
“I agree that online advertising will be the new way to reach the affluent. As people acquire wealth, they have less time for everything. The super affluent have personal assistants, private jets…all designed to give them more time and make their lives easier. That’s why they use the Internet. It’s easy and it’s anonymous. They can gather information without ever talking to a sales person.”

Meryl Macune, Executive Director of Online Marketing and New Media for Estee Lauder
“I agree with point one in that luxury brands will continue to utilize the internet to further engage consumers by being able to truly target this customer in more niche, upper end, luxury sites.
I also agree as the Internet and other alternative digital platforms become a more integral part of users lives, brands will look to integrate all elements of a campaign via Internet and offline traditional media such as print. Lastly, agree that brands have to think beyond the simple display advertising to give a consumer a reason to engage with your brand.”

Cal Simmons, Founder and CEO of Adcision Luxury Media
“Although there is an overall downward trend in advertising, the flexibility and targeting that online advertising can allow luxury brands leads me to agree that they will fare better than other forms of advertising. It will no longer be enough to simply have only display ads. Campaigns will be planned to include display, sponsorship opportunities, blogging, and other ‘outside the box’ advertising. One must cover all their bases and reach in multiple directions to be truly successful.”

Michael Keaveny, Media Supervisor at Razorfish
In reference to #3 – “Yes, the Obama campaign’s success with online promotion will help to re-affirm the space for some, and legitimize its value for others. Social media, especially Facebook, may have opened eyes and proven itself the most as a result.”
In reference to #4 – “Yes, it is increasingly difficult to stand out with digital display advertising. Just being there is not enough. The channel is getting more crowded and consumers are utilizing a more fragmented mix of properties.”

Anonymous, Media Planner
In reference to #2 – “Disagree – When it comes to luxury audiences, I’m not sure if any advertisers have figured out exactly how their audience is using social networking and UGC. Our audience is a lot different than the usual Facebook/Myspace crowd. So it becomes twice as hard to come up with a sound program that integrates the new Web with old media.”
In reference to #3 – “Disagree – I think advertisers look at Obama’s campaign in a vacuum. It occurred with a much broader audience and with different objectives. Most political pundits point to a wide variety of reasons why Obama won (i.e. the economy, Bush’s low ratings), and I don’t think anyone gives the online marketing the credit it deserves.”
In reference to #4 – “Agree – This should and always be the case. But it gets harder as new technology enables new types of advertising. Hopefully luxury advertisers are willing to take a chance with their creative and utilize these new technologies, but that remains to be seen.”

Rebecca Matt, Senior Account Strategist for Morpheus Media

“I definitely agree with all of these predictions. I particularly agree with number 1 as I think there has been a lot of research to support the fact that despite a downturned economy, luxury shoppers are still shopping. While they may not be spending AS much, they are still spending. Additionally, the research I have seen has shown that not only are these people still shopping but if the brands that they love increase their advertising in a downturned economy their consumers not only remain loyal but that brand is much more likely to have an increase in profits after the recession.”

Tanya Ryno, Publisher of Lift Magazine
“I agree … Luxury brands can re-create a similar online scenario online as in the offline world. They can communicate the brand messages through high-end creative emails, online ads and page sponsorships and build a luxurious virtual presence through a website or micro site. This is what sets them apart offline, they are able to create an experience … it’s not so much the product as it is the experience that makes the luxury brand luxury and I believe online is perfect way for them to extend their brand.”

Matt Simrell, Director of Business Development at US Connoisseur, Inc.
“I agree that online ad spending will gain in dollars. Print will still, as always get the lion’s share of luxe ad dollars. I think that the shift in budgets from print and other “traditional” media to online interactive campaigns will be logical in the minds of those who are directing the funds. This is because it is “instant gratification” in terms of tracking. This makes answering the age-old question “is it working?” much easier to answer.”

2. What changes are your client’s making when planning 2009 campaigns?

Melissa Vigo, Associate Media Director at Sapient

“I’ve been seeing more of a shift in media dollars going towards online marketing and away from traditional media methods. There are a lot of talks around web 2.0 especially for brand awareness focused clients. Employing a viral strategy allows advertisers to get a greater bang out of their marketing dollars. A lot of our clients are also testing targeting technologies such as behavioral and re-targeting.”

Michael Keaveny, Media Supervisor at Razorfish
“In our challenging economic environment, clients are more than ever are looking to spend their budgets wisely. There is a greater emphasis on efficiency, and we are expecting a lot from publishers. Our assumption is that they can be increasingly accommodating during these times.”

Susan Adams, President of Fractional Sales Solutions
“Many are changing the demographics they market and sell to. The Millionaire Next Door is not buying right now, so if that’s your target group, you need to move up to a different demographic.”

Cal Simmons, Founder and CEO of Adcision Luxury Media
“Both targeting and innovative sponsorship opportunities have been popular, efficient and budget friendly options for many of our advertisers. Many advertisers are looking for new markets and publishers that are perfectly targeted to their demographics and offer both traditional display advertising and outside the box opportunities. Others, such as Estee Lauder, have purchased ‘skins,’ sponsored advertorials, and roadblock campaigns to make the most of their online advertising budget.”

Rebecca Matt, Senior Account Strategist for Morpheus Media

“I think what we are seeing with our client’s is that while with some there is still a willingness to try new things, we are really sticking to the tried and true publishers. So we are still advertising but really focusing on what we already know works.”

3. Do you have any predictions of your own?

Adam Broitman, Director of Strategy at Crayon and Author of A Media Circus
“A recent article in the LA Times spoke about the role of intimacy in luxury marketing. Given that the luxury market is small, marketers have always needed to cater to the needs of as many individuals as possible. That has never been more true than it is today. Luxury shoppers are still buying, but they will be more selective—those marketers that know how to build relationships will win the game.”

Melissa Vigo, Associate Media Director at Sapient
“Mobile Marketing – Will play a bigger/better role in 2009, whether if it’s reaching a consumer through SMS marketing or mobile web ads. Mobile ads tend to have higher click through rates making it a great opportunity to reach consumers on the go..
Targeting Technologies – There is such a variety of targeting technologies available to advertisers such as behavioral, re-targeting, content targeting and others. Advertisers need to understand their target audience and what their online media habits/behaviors are.”

Michael Keaveny, Media Supervisor at Razorfish

“In the long term, sites that cater to luxury brands will be increasingly challenged to offer more large creative sizes without being interruptive to the user. Things have come a long way, but this will be necessary to compete better against print for share of luxury advertising budgets.“

Susan Adams, President of Fractional Sales Solutions
“I think those companies that do target marketing to the affluent will be much more successful. To simply keep thinking, ‘they have money and can afford what we sell’ isn’t a sound strategy. The affluent are a complex group and if you understand their buying motivations, you’ll be much more successful in a tough economy.”

Cal Simmons, Founder and CEO of Adcision Luxury Media
“Tightened advertising budgets will inspire a major luxury brand to jump out ahead of the crowd with an innovative, provocative campaign fully utilizing the interactive nature of online advertising. This will create huge buzz. We don’t know who it will be, but we do know that more and more luxury brands are embracing online and looking for creative ways to tie in social media and engage their clients in a broader conversation.”

Anonymous, Media Planner
“I think display advertising will continue to slump, as it becomes harder to prove its worth against more proven methods like search. Just like TV, users are also becoming immune to display advertising and unless sites find a more unique way to engage users with advertisers, CTR’s will continue to fall.”

Rebecca Matt, Senior Account Strategist for Morpheus Media
“I think with Obama in office we will see in upswing in our Economy. I also think that just as a wave of the future and with the increase of phones like the iPhone, that more people will spend their advertising dollars online. Print will never go away, it just won’t, but I think we will see less of it. I think that people are starting to realize what great things you can do online and how trackable and accountable you are for it. It really is a better bang for your buck.”

Tanya Ryno, Publisher of Lift Magazine
“The sensorial customer experience that is created in a store will be re-created and controlled on the website: thanks to the visual and sound experience, the usability, customer service and customization, will make the Internet a success for luxury brands. I don’t know how they’ll do it, but I imagine that ads will become much more interactive. Example: You may be able to have an online chat with someone about a product immediately by clicking on part of an ad … you you may be able to purchase directly from an ad … I’m not really sure, but it will be cool whatever it is!”

Matt Simrell, Director of Business Development at US Connoisseur, Inc.
“My prediction is that luxe spending in online and interactive will increase substantially over 2009. I think that it will be a learning experience for all. I have the feeling that this online advertising will “spurt” more talk and activity than actual sales dollars as a result. You must realize who your target customers are, and where to find them.”