Prestige is. priceless. Solutions for publishers. How to grow your audience and build revenue with luxury content. Monaco

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1 Solutions for publishers Prestige is 43,737411, priceless. How to grow your audience and build revenue with luxury content. Monaco

2 Indulge the audience. Luxury content remains immensely popular with all kinds of people, from the highest of high-networth individuals to anyone who enjoys vicariously experiencing the sights and sounds of ultra-highend travel, food, spirits, fashion and cars. Because luxury content is such a reliable draw, it is highly desired by advertisers of all kinds. This is why it creates important opportunities for publishers, broadcasters and media companies to attract bigger audiences and higher revenue. Luxury content is also hard to get right. Audiences crave depth, breadth and, most critically, authenticity. Advertisers willing to spend significant sums bring very high expectations. This white paper provides a quick overview of the market for luxury content and how publishers can deliver the kinds of content audiences and advertisers most want to see. Why luxury sells. How the market works. Using licensed content Planning to succeed. 2

3 Why luxury sells. Luxury content occupies a unique position in the media landscape. Unlike news, it is not driven by current events or late-breaking updates. Unlike technology or politics or health, it is not immediately relevant to the average person s life experience. What luxury content activates is a powerful mix of aspiration, desire and escapism. This is why it resonates so strongly across so many demographic groups, from up-and-coming professionals to seasoned executives and everyone in between and why it compels them to keep reading, watching and clicking. There are two big audiences we serve, says the editor of a luxury-oriented digital magazine. One is those for whom luxury goods are attainable. They want to know what to buy, where to travel and what the latest trends are. The second and much larger group includes those who are looking for an escape. Spending time looking at exotic destinations and beautiful clothing fulfills that need. In fact, the editor notes that the more inaccessible the content, the better it tends to perform. A list of the 10 best restaurants in Berlin will perform adequately. But a photo gallery about the most remote areas of Mongolia will do better. Because the audience is less likely to visit the latter locale, the content itself becomes the audience s only chance to experience it. Regardless of how realistic the car or watch or bottle of single malt scotch might be to purchase in real life, content that delves into luxury goods and experiences is very easy to consume, enjoy and share. And, according to the editor, those who enjoy luxury content tend to spend more time with it than they might with other kinds of content. While readers can digest the essence of a news story in a headline and a few bullet points, they prefer to look at every single photo in the slide show about a custom-built super-yacht. This may also be why the appetite for luxury content has kept growing in recent years despite market volatility and fluctuations in the global economy. Luxury content itself is very diverse. The typical categories that appeal to luxury-minded consumers include travel, food, spirits, fashion, cars and the If you can show that you reach a particular demographic audience, that is very attractive to luxury advertisers, especially in digital catchall of lifestyle. Popular formats include reviews, travelogues, explainers, top 10 service pieces and in-depth features. This content can be presented in a variety of formats, including digital video, print and photography, which can be experienced through digital, social and conventional media channels. Publishers seeking to take advantage of luxury content face no shortage of possibilities to explore. Another factor working in publishers favor is the power of analytics. Across digital platforms, analytics are making it easier for publishers to quantify the audience they have to offer to advertisers. One of the most sought-after groups, for example, is affluent men between the ages of 25 and 44 who engage with content. (In other words, a group that is more likely to purchase luxury goods.) If you can show that you reach a particular demographic audience, that is very attractive to luxury advertisers, especially in digital, said a publisher who specializes in digital business news. This opens opportunities for additional advertising. Because while brands want to advertise near luxury content, they also want to buy ads where those same readers go on your site. If you can show that the audience moves from luxury to stories about finance, they will buy ads there, too. In other words, luxury content has the potential to pay off for publishers in ways that other types of content can t. To understand the scope of the opportunity, however, publishers need to know the basic dynamics of the marketplace. 3

4 How the market works. The luxury goods market can be broken down into two major categories. Personal luxury goods, such as spirits, fashion, cosmetics, fragrances, watches, jewelry, luggage and handbags, represent a $250 billion market. Luxury automobiles are an even larger market at $390 billion.1 The global advertising market for all goods and services, including luxury, is expected to reach approximately $544 billion by the end of 2015 and is growing at a rate of 4.4% per year,2 which is in line with the growth rate of the luxury market. While it is difficult to say what percentage of these dollars are spent on luxury goods, clearly luxury brands devote significant resources to reach their most desired audiences. In a recent study, 83% of luxury marketers agreed that it is worth paying premium cost-per-thousand-impressions (CPMs) for sites that reach luxury consumers.3 The automotive industry offers additional insight. According to the 39th annual Advertising Ratios and Budgets report, released in June 2015 by research company Schonfeld & Associates, the top advertising category is automobiles, with an annual spend of more than $44 billion.4 Top brands will each spend more than $2 billion on advertising in Many of these own luxury brands, such as Bentley (Volkswagen), Lincoln (Ford), Infiniti (Nissan), Acura (Honda) and Lexus (Toyota). Where is all of this money being spent? More and more, luxury goods are shifting to digital platforms. According to Bloomberg Intelligence research, luxury brands are engaging more consumers through websites, mobile apps and social media platforms than ever before as they strive to broaden customer outreach and boost sales. Overall, Internet ads account for 27% of ad spending, with online advertising expected to rise 17% in 2015 to about $145 billion. For the sake of comparison, TV is still the number one platform, making up 38% of ad sales, but is growing at a much slower rate just 1.8% for 2015 while more traditional print media are shrinking. The move to digital makes sense for luxury goods, given that more than 75% of luxury purchases are influenced by digital and that 95% of luxury consumers have smartphones and 80% use social media at least once a month.5 According to Bloomberg Intelligence research, luxury brands are engaging more consumers through websites, mobile apps and social media platforms than ever before as they strive to broaden customer outreach and boost sales. 4

5 However, it is not just luxury brands that are lining up to buy ad space near luxury content. Brands that aspire to a luxury image but require a mass audience, such as those in spirits and beauty, advertise heavily in luxury media. The same can be said of lifestyle brands, such as Apple, that are looking to maintain a certain elite status in consumers minds. The point is that publishers that offer luxury content will have many options to consider when it comes to monetization. One final nuance publishers should be aware of is that luxury brands have traditionally maintained a very close relationship with editorial teams. Luxury advertisers come from a world where, for example, if you advertise in a top-tier fashion magazine, you could be sure your dress would be featured prominently in the magazine, said the editor. Or if you re paying for a very expensive front-end ad, you could expect to see your product on the cover. Luxury brands feel comfortable exerting pressure on editorial. Even if this tendency is waning in an era when advertisers have many more ways to get exactly what they want, publishers can expect that luxury brands will expect a strong return on their advertising investment. This is where the strategic placement of licensed content can help. The lap of luxury The luxury goods marketplace occupies a unique space in the media landscape at the intersection of wealth, aspiration and escapism. The luxury market Food Spirits Fashion Cars Travel From Bloomberg research, based on Zenith Optimedia data adage.com/article/btob/global-ad-spending-average-4-2-year/ According to McKinsey estimates from June s Business of Luxury Summit in Monte Carlo 5

6 Using licensed content. Luxury brands and other brands seeking to tap into luxury-driven consumers are unlikely to buy advertising from publishers that do not feature luxury content prominently and consistently. This creates a challenge for publishers and others entering the luxury space. The path of least resistance is taking up many of these brands on their invitations to all-expenses-paid junkets to review products. This approach, unfortunately, compromises the two must-haves for compelling luxury content: trustworthiness and authenticity. Taking advantage of junket opportunities results in homogenized coverage that does not stand out and may raise questions in the audience s mind about the author s objectivity. If you rely on trips arranged by travel companies or local travel agencies, you re going to wind up with stories that sound very similar to those on other sites, the digital publisher said. It hurts your credibility. If you are someone who is passionate about food, you re not going to trust a restaurant review written by someone who has been paid by the restaurant to write it. Licensing highquality objective content is a way to make your luxury content distinctive. Of course, the other option is to cover luxury firsthand, or doing it the hard way, according to the publisher. What this means is that the editorial team has unmatched expertise in all the niches of the industry. This team must take the time and effort to wear the clothes and drive the cars and visit the exotic locales, without direct assistance from brands, on a global scale. The budget for providing this kind of broad, deep and authoritative coverage, however, is likely out of reach for all but the largest organizations. Licensing offers a way to take advantage of high-quality content in a much more cost-effective way. It s very easy to publish a bunch of pretty pictures, the digital editor said. Much of the content out there is aggregated. Ultimately, if you have an activated audience, what really matters is authority and trustworthiness. Licensing content with that authoritative voice makes sense. Licensed content includes much more than high-quality photos. Any kind of content that luxury coverage requires can be licensed from providers like Bloomberg. Choices include digital video, print journalism, photography and market data. Licensing a mix of luxury content makes it easier to address the needs of different kinds of people in different places, said the editor. If you want to reach a broad swath, and luxury brands do, multiple platforms are important. Some will visit websites more often during the week, but less often on the weekend. Some are using apps in the morning and evening as they commute. Multiple content platforms give you more ways to accommodate them. Making the right choices can be difficult for publishers making their first push into the luxury space. While licensed content provides a strong foundation, lasting success requires a cohesive strategy. Acquire trusted content: For publishers seeking to amplify and extend luxury coverage with high-quality licensed content, the Bloomberg Content Service offers a comprehensive source for luxury-themed videos, photos and articles about what s new, what s trending and what tastemakers are saying. Look to Bloomberg for a trusted, authoritative voice and substantial coverage of the topics consumers care about most. 6

7 Planning to succeed. For newcomers to luxury content, putting together the right strategy can seem daunting. But with a few simple steps, publishers can place their organizations on a path to success. The most important of these, according to the digital editor, is knowing your audience. The main thing to figure out is who your audience is and what they need today, he said. You can help them grow and change over time, but you have to be aware of where they are right now. Luxury thrives on recommendations and sharing on social media. If you re not publishing content that your audience is passionate about, they will not share it. You have to start the conversation in the right way so they can keep it going. To share luxury content with as many potential viewers as possible, publishers should consider digital-first content a top priority. Content created specifically for digital platforms is the easiest to consume. Short digital videos lend themselves to sharing across the publisher s site, partner sites, third-party sites like YouTube and a variety of social media channels. High-quality photos of luxury goods tend to do very well on Twitter and Instagram. The more pathways publishers create, the easier it will be for the audience to find what they are looking for and pass it around. Content bundles offer another way to widen the scope of social sharing. By combining digital video with articles and photos, including both original and licensed content, publishers can create a luxury package that can be syndicated through other publishers looking to complement their own content expertise in other categories. Search engine optimization (SEO) is the final step publishers need to complete to make sure luxury content finds its way to the consumers who are most likely to engage with it. SEO involves tailoring content so that it gets listed earlier and more frequently in search engine results. According to the global head of marketing and sales operations at a major media company, content volume is the top factor that affects SEO. The more content publishers produce, the easier it is to ensure high rankings, she said. More content means search engines are crawling more of your pages. Adding volume is the number one thing any publisher can do to make sure they are driving as much traffic as possible to the site. Publishers can also attain relevance by providing long tail content, or evergreen articles that are comprehensive enough and updated often enough to become a top result returned for a specific topic, category or search term. This tactic is particularly relevant for the luxury category. Publishers can specialize in one aspect of the category, such as watches or sportscars, and accumulate as much content around this topic as possible to improve search results. Some basic SEO steps that pertain to digital video include embedding links to the original site in the video s description box, adding select targeted keywords to the description and taking full advantage of closed captioning. Essentially, the more ways search engine bots have to gauge the relevancy of the video, the better results publishers will see. Licensing in style: Bloomberg provides the tools that publishers, broadcasters and media companies need to make an impact with luxury content, including photos, digital video and journalism. Trust Bloomberg to deliver emerging trends in luxury and behind-the-scenes coverage of brands, products and major events. 7

8 Solutions for publishers The data included in these materials are for illustrative purposes only Bloomberg L.P. All rights reserved Get started today. With the right provider, licensing luxury content can help publishers attract a larger audience and grow advertising revenue. The Bloomberg Content Service licenses high-quality video, articles and photos covering all aspects of luxury goods. To learn more, visit About the Bloomberg Content Service. Bloomberg Content Service is a leading provider of global business and finance video, news, photos and data for more than 1,000 media outlets in 60+ countries.