Zenith’s Luxury Advertising Expenditure Forecasts 2018, an annual survey recently published, shows several interesting trends. Here are some of the survey’s highlights.
Shifting to Digital Ads
The survey, which examines expenditure on luxury advertising in 23 key luxury markets and focuses on luxury advertising, together with the sub-categories of luxury automobiles, fragrances & beauty, fashion & accessories, watches & jewelry and luxury hospitality, found that luxury advertising “is rapidly shifting towards digital media, led by luxury hospitality brands”.
50% of luxury hospitality advertising will be digital this year, up from 47% in 2017. Across all luxury brands, 33% of advertising will be digital this year, up from 30% in 2017. Zenith forecasts that luxury automobile brands will spend 39% of their ad budgets on digital advertising in 2018, followed by watches & jewelry brands (28%), fragrances & beauty (27%) and fashion & accessories (13%).
According to Zenith, “digital advertising is now responsible for almost all the growth in luxury ad spend”. By 2019, Zenith said, digital advertising will account for 35% of total luxury ad spend. The company expects total luxury ad spend to rise 2.4% in 2018 and 2.8% in 2019.
Ad Spend by Jewelry and Watches
The survey divides luxury goods into two types – high luxury (watches & jewelry and fashion & accessories) and broad luxury (luxury automobiles, fragrances & beauty and luxury hospitality). According to Zenith, high luxury brands “advertise in prestigious media with limited reach” and spent 57% of their budgets on magazine advertising in 2017. In 2019, the survey expects 55% of high luxury ad spend to go to magazines.
The largest market for luxury advertising is the US, followed by China. Luxury brands spent $5.2 billion on advertising in the US in 2017, and $2.1 billion in China. These two markets accounted for 61% of luxury adspend across the 23 markets included in the report that year.
