It includes over 40% of Europe’s online consumers, yet the premium market has long occupied a blind spot on the advertising radar – even for those brands that depend upon it. ‘A Cut Above the Rest’, one of the first studies to focus on premium consumers, reveals clear distinctions between the luxury and premium markets and demonstrates that premium brands need to move beyond traditional advertising strategies if they are to engage premium consumers effectively.
The groundbreaking Microsoft Advertising study, which includes detailed quantitative research from seven European markets, debunks the myth that the luxury and premium markets are interchangeable. With an average household income of under €39,000, premium consumers are not ‘affluent’ in traditional terms. They economise in areas that are less important in order to pay 20% to 50% more than mid-market prices for their favourite premium brands and products, and they do so on the basis of the improved performance that they expect premium purchases to deliver. This balance of rational and emotional drivers is a key behavioural characteristic of the premium market, distinguishing it from luxury consumers, who respond to brands’ emotional appeal, and mid-market consumers driven by price.
The findings are hugely significant for advertisers, who may have missed up to 55% of the actual premium market through relying on traditional demographic targeting. The study suggests that alternative techniques such as online behavioural targeting could dramatically increase exposure to premium consumers.
In order to drive premium market purchases, premium brand advertisers should focus on establishing tangible benefits for their products and reassuring premium consumers about the value that they represent. A holistic marketing strategy is essential, as several channels play overlapping roles at different stages of the purchase journey: display advertising and word of mouth can be equally important in driving awareness; online searches, forums and editorial reviews play a vital role in providing information, with networks of friends essential in providing reassurance about the value of premium purchases.
Digital media have a key role to play in reaching premium consumers, delivering integrated messages for different stages of the consideration process. Online display advertising and search advertising are fundamental to driving awareness and providing information, while advertisers should use the full range of social media available online to engage premium consumers and provide the reassurance they demand. Windows Live Messenger and Windows Live Hotmail are two of the most popular channels for consumers seeking opinions from friends and contacts.
Click here to download Beware the Great Ignored, our Whitepaper on the premium market, as a PDF.
