It’s tricky enough for marketers to reach consumers of any sort when a bad economy and a technological revolution happen at the same time, as is the case now. But it’s that much trickier for upscale brands to connect with affluent consumers, given the arcane folkways and media habits of the highly varied people inhabiting that category. In the age of Facebook, how are the affluent using new media, and how should upmarket brands target this audience in those venues? Some recent studies offer guidance as brands seek answers to such questions.
Despite a habit of sequestering themselves in gated communities, the affluent have not been shy about joining the social-networking crowd. In a small-scale poll last fall by SEI Wealth Network among individuals with investible assets of more than $5 million, 70 percent said they use social-media sites, including 17 percent who do so daily.
A broader survey this year by the American Affluence Research Center (AARC), conducted among the wealthiest 10 percent of U.S. households, also found widespread usage of social media. Half of those surveyed for the report participate in one or more forms of social media, including 40 percent who are on Facebook and 29 percent on LinkedIn.
As you’d expect, younger affluents are especially likely to be engaged with social media: Among the AARC’s survey respondents, 57 percent of those under 50 are on Facebook, as are 23 percent of those 60 and older. And affluent women are more apt than their male counterparts to be Facebookers (49 percent vs. 33 percent). Perhaps reflecting the age skew of the very wealthy, respondents with a net worth of $6 million-plus are less likely to be on Facebook than those in the $1.5 million to 5.99 million category (24 percent vs. 37 percent). And both of these cohorts are less likely to be on Facebook than those with a net worth of $800,000 to 1.49 million (47 percent).
The affluent also have plenty of gadgets, in addition to computers, with which to access social media. Thirty percent have an iPhone, 28 percent have a BlackBerry, and 13 percent have some other kind of smartphone. Twenty-two percent have an iPad or another tablet. Affluent owners of tablets have an above-average propensity for engaging with social media, and 57 percent of such respondents reported using Facebook.
When the affluent do get involved with social media, some of this socializing involves brands: Among AARC respondents who use social media, 26 percent said they “receive regular communications from a manufacturer or retailer to which they subscribe to receive product and related information,” says the report, with Facebook accounting for about two-thirds of these people.
Of course, this leaves a majority of the survey’s affluent consumers declining to engage with brands in this way. “It appears that large numbers of the affluent have not found compelling reasons for opting in to receive regular communications from retailers or brands,” Ron Kurtz, president of the AARC, told CMO.com. “That is the challenge that retailers and brands must overcome if they are to develop a good following through social media among the affluent.”
Curb Your Enthusiasm
There’s also the danger that upscale brands might be more enthused than their target audiences are about communicating via social media--or, at least, more indiscriminate. According to Kurtz, “The brands’ social-media management and their social-media agencies are at risk of communicating too often and sending information of limited interest to their audience, which is not totally homogeneous and has diverse interests and reasons for linking to the brand via social media.”
Even when a brand has accumulated a zillion Facebook fans, this doesn’t necessarily mean it is capitalizing shrewdly on the marketing potential of social media. That’s the key insight in a report issued last month by L2, a think tank that focuses on digital marketing. Titled “Prestige 100: Facebook IQ,” the report looked at how well 100 prominent luxury brands are doing at employing Facebook to connect with their target audiences.
“Although many prestige brands maintain a monocular focus on the size of their Facebook community, they have failed to embrace the authentic two-way communication and marketing activation required to monetize the platform,” stated the report, which was created in tandem with Buddy Media. Thus, while BMW, Clinique, and Johnnie Walker were among the upscale brands rated “genius” for their use of Facebook as a two-way medium, famous brands like Rolls-Royce, Givenchy and Rolex landed in the report’s “feeble” category.
Do the not-so-genius brands simply fail to grasp the nature of social media and their proper role in it? “Luxury brands today understand the importance of creating social communities and are making visible investments in their Facebook pages, and many are doing a great job at finding that balance between growth and engagement,” said Daniella Caplan, an associate at L2 and lead researcher on the Facebook IQ report, in an interview with CMO.com. “What we are seeing in many cases, though, is not a reluctance to engage, but rather a hesitancy to open up the discussion to a wider audience. These brands post content that they, themselves, find engaging without truly engaging with their fans. This strategy typically turns social-media properties into additional, albeit sizeable, broadcast-media channels rather than genuine social-media communities.”
Even among prestige brands that are good about at responding to fan posts, just four--L’Occitane, Kiehl’s, Korbel and Vacheron Constantin--responded to as many as 50 percent of them during the period of the study.
What's holding brands back?
In the teacher’s comment that accompanied a middling grade for Giorgio Armani, the report said the brand “needs to exchange control for higher fan engagement.” While hoping to connect with affluent consumers, are prestige brands often held back from full use of social media by fear of losing control of their image in an environment where everyone can have his or her say?
“Their apprehension is understandable,” Caplan says. “These brands have invested precious resources in creating an aura of scarcity and exclusivity, and they fear the potential impact this mass reach might have on their brand equity.”
She also emphasizes, though, that they must not let such anxiety deprive them of the advantages that social media present. “It’s a defining moment for all businesses, but I think the conversation needs to move away from apprehension and toward understanding how best to leverage trends that are only going to increase in influence. There are so many opportunities to showcase the brands’ beauty and artistry, and the inevitability of a social and digital presence should be far less scary than your competitors leaving you behind.”
Anyhow, it’s not as though one can sidestep the issue of image control by avoiding social media or treating it as a nonsocial medium. Caplan points to “the risk of being absent from the conversations and content sharing pertaining to your brand.”
“We’ve followed some very savvy users on Twitter and Facebook, such as on the Patek Philippe non-official Facebook page, who have singlehandedly taken on a brand persona in the absence of an official brand presence--some of them garnering huge followers and fans,” she says. “Brands that are active on these channels have the opportunity to guide and participate in these activities and protect their brand equity.” If brands bide their time until they feel more comfortable with social media, this entails a financial risk of its own. Rates for cost-per-click ads on Facebook already have climbed 40 percent in the past 12 months, Caplan notes, and “fan-acquisition costs are only going to increase.”
Remarking that “Facebook is not an island,” the report also stresses the importance of integrating a brand’s social-media activity with its broader marketing efforts: “The strongest Facebook campaigns are integrated across platforms and online media.” Many brands that target affluent consumers (including about half of those in this study) fail to provide a link to Facebook from their own corporate Web sites. “Links to Facebook in print media and other campaigns and at point of purchase are rarer still,” the report adds. Just 20 percent “regularly link to e-commerce in their wall posts.”
It’s not as though traditional media has ceased to play an important role in affluents’ overall media usage. Indeed, the well-to-do are conspicuous among today’s dwindling number of loyalists for print. Confirmation of this emerged clearly in a recent survey by the Affluence Collaborative, a research initiative of New York-based AgencySacks, which specializes in advertising aimed at the affluent market.
Among respondents in the general population, 26 percent said they’d spent less time this year than last reading print magazines, while 10 percent said they’d spent more time doing so. Among respondents with household income of $500,000-plus, by contrast, the “more time” cohort outnumbered the “less time” group by 32 percent to 22 percent. Similarly, just 8 percent of the general population reported spending more time this year than last in reading print newspapers, and 25 percent reported spending less time in doing so. But among the $500,000-plusers, “more” outscored “less” by 31 percent to 25 percent.
“The wealthy are huge devourers of media, in general, whether it be newspaper or print or online,” sais Julie Sacks, a partner in AgencySacks, in an interview with CMO.com. “What we’re finding is that the wealthy are leading the way in dual readership, so they’re reading print, and they’re reading online. We see print readership continuing to decline as consumers see the benefits of online--the fact that it’s portable, it’s interactive--all those good things. But as of right now, it’s still pretty healthy.”
This does not mean, however, that the affluent are unselective in their reading. “We feel from our findings that the wealthy are probably reading fewer publications but reading more of each. They’re more targeted in what they choose to read.” In any event, affluents’ fidelity to older media is much less in evidence when it comes to TV. Among the survey’s general population, 39 percent reported watching at least 21 hours of TV per week. Among the $500,000-plusers, just 22 percent said the same, as did 19 percent of those in the $200,000 to 500,000 bracket.
Even where print is concerned, affluent consumers’ attachment is more to the content they get rather than to print, per se. Thus, Sacks foresees them adopting the online versions of their favorite publications as these become readily available. “They are migrating, absolutely,” Sacks says, “but they’re using everything right now.” Mobile devices are part of this, and her agency’s research has shown the $500,000-plus income cohort leading the way in this regard. When asked to cite the ways they usually access the online editions of newspapers they read, 43 percent cited a smartphone or PDA, and 29 percent cited a tablet. In other words, even where old media is concerned, new technologies are important to the affluent.
This engagement with technology underscores the importance for luxury-goods marketers of meeting their target audience in varied venues, even if it’s tricky to integrate efforts across a multitude of channels. As L2’s Caplan puts it, “In general--and this is not exclusive to luxury brands--the mass array of marketing platforms can be perplexing, regardless of resources. Brands are struggling to translate their existing assets, as well as to create new capabilities that are unique to these digital platforms. There is nonetheless a window of opportunity now for experimentation. The key to success here will be looking at these platforms as complementary rather than as mutually exclusive.”