Would you believe that many premium brands’ advertising efforts are failing to engage up to half of potential customers?
Unlike expensive luxury brands, products in the premium category are increasingly within the grasp of the ordinary person. A BMW 3 Series is a classier purchase than a Ford, but isn’t completely unattainable for most people, like a Bentley, for example, might be. It’s ‘one better than the norm, but still affordable.’ This, according to fascinating new research from Microsoft Advertising, is the definition of the ‘premium’ category and is an area where many brands are falling short in terms of how they target and engage with potential customers.
This is largely due to the fact that there’s an assumption that it is primarily affluent people who buy premium. But think about the teenager who works in a restaurant to save up for a pair of Jimmy Choos for example. She’s heard from her friends how cool the styles are, but also wants to make sure she gets value for money as she’s not ‘affluent’ by any stretch of the imagination and wants to feel like the extra spend is worth every penny.
In fact, our research launched across Europe today shows that under half of online consumers buying premium products are actually affluent. Only one in four premium consumers boast a pre-tax household income of €50,000 or more.
This means that advertisers who rely on demographics to hit this group are missing a huge group of people who aren’t affluent, but buy premium -- the Great Ignored. Our research examines the Great Ignored and uncovers that while they’re demographically diverse, their behaviour is homogenous.
Their most salient characteristic: they love data. 63% indicate that they make the time and have the inclination to investigate the product categories that interest them, and this plays a big role in their purchasing decisions. A lot of this harvesting of information takes place online. They also place a lot of emphasis on the importance of word of mouth recommendations, unlike luxury purchases based on emotion and desire, premium consumers want to make sure they are getting ‘value’ from any purchase. Excitingly, social media is a key part of this.
Our study entitled ‘Defining the Premium Consumer in a Digital World’ does a terrific job of explaining all of this, and provides practical recommendations for how marketers operating in the premium category can adapt their strategies to reach this elusive audience.
It also explains how Microsoft is working with some of the world’s biggest brands to find, educate and attract the Great Ignored through all parts of their online purchasing journey.
Download the PDF (2.84 MB) of the Premium Consumer Research Report now!
Nick - Research Manager, EMEA Microsoft Advertising