Online ads better than TV at promoting luxury goods

An increasing number of luxury goods purchases are being made on the back of online advertising, according to research carried out by the Internet Advertising Bureau and design magazine Wallpaper.

The joint research project found that 72% of consumers who purchased premium luxury goods did so as a result of seeing an internet ad. The finding suggests online advertising is as effective as other media in terms of promoting luxury goods.

The report also discovered that 70% of people who purchased premium luxury goods did so after seeing advertising in a magazine, while 62% did so after watching a TV ad.

The research further found that consumers will carry out research into luxury goods online, regardless of whether they then go on to make that purchase over the internet.

The research consisted of an online questionnaire sent to 1,007 respondents, which enquired about consumers' attitudes towards luxury goods and services, purchasing habits and attitudes toward such advertising. All respondents had a salary exceeding £40,000 a year and were in the socio-economic group A or B.

When asked how they sought information on luxury products, 75% said they go to the internet first, while 72% said they referred to the internet before making a luxury or premium purchase.

Sorcha Proctor, research manager at the IAB, said the research confirmed that luxury brands must consider online as a key part of their marketing strategies.

She added: "Until now, despite a great fascination with this group, there' been limited research and information into the attitudes and online habits of luxury consumers."

However, Simon Davis, managing director at Walker Media, which handles the accounts for luxury brands Mandarin Oriental and Barclays Wealth, remained sceptical about the effect of online ads on luxury goods sales. "Luxury brands advertise in an extremely controlled and consistent way and tend to be religious about that," he said.

"Any attempt to extrapolate years and layers of advertising effect from a new wave of display online advertising would be difficult and I would be surprised if you could show cause and effect there."

LUXURY GOODS AND ONLINE

- Premium luxury consumers spend more hours a week online (25.4 hours) than watching television (13.2 hours)

- Respondents made the majority of their luxury purchases online rather than in shops or by direct mail

- There are about 5.9 million regular luxury consumers in the UK, of which 17% are "premium" consumers

- The internet and word of mouth are the most important factors when researching luxury goods purchases.

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