Hello.

Goals

To help inform the advertising strategy for a luxury brand, understand how much luxury brands are spending on marketing compared to brands overall, and get details on where/how the money is being spent.

Early Findings

  • Luxury brands spend 33% of their marketing budget on digital while overall brands spend 42% of their marketing budget on digital. The areas where luxury brands are spending digitally include social media promotions, internet ads, influencer ads, and branded content.
  • In 2018, brands spent 11.2% of revenue on marketing.
  • In 2016, Gucci spent 11% of their revenue on advertising which is about the same as the 2018 average. LVMH spent 12% of revenues on advertising in 2018, which was only exceeded by Chanel.
  • Statista broke down the marketing spend of luxury brands for 2017 and found that 31.6% of the budget was spent on TV, and 22.9% was spent on print media. The next three largest categories were display, search, and outdoor. In case the data is not accessible on the website, a screenshot is included here.
  • The report “State of Luxury 2018: The Insider View” is behind a paywall but would likely have many useful insights. Information that was accessible without paying includes that the largest number of luxury brands will use some of their advertising budget on social media advertising and promotion; and about half as many brands plan on allocating advertising resources to print media as compared to social media.
  • Although luxury brands were expected to increase advertising spend by 2.4% in 2018 and 2.8% in 2019, this is below the 4.2% and 3.6% increases expected across all categories.
  • Although high luxury brands are shifting some of their marketing budgets to digital, they still spend more than 50% of their advertising dollars on magazine ads. Meanwhile, broad luxury categories spent more on TV advertising.
  • Chanel was named the most influential luxury brand on social media. Part of this is the result of choosing influencers carefully to ensure they portray the "aspirational lifestyle" that Chanel promotes.

Proposed next steps:

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