How To Do Digital Luxury

Alex Charlton, director, Essential Research and Beth Uyenco, director of research, Microsoft Digital Advertising Solutions argue, in this exclusive blog article, that luxury consumers are ready for marketing 2.0 and explores how luxury brands can establish a credible presence online.

“For consumer brands the internet has become a given; a pillar of brand strategy. Brands have found a way to harness digital media and emerged leaner, more dynamic and with greater relevance to a vast new audience. Luxury brands however have been more reticent to meet the web head-on.

The inherent contradiction between the ubiquitous accessibility of brands in the online world and the fiercely protected exclusivity at the heart of luxury consumer goods has to date remained an unresolved mismatch. The sensory interactive experience of the Jaguar XF’s digital launch and Chanel’s recent video campaign featuring Keira Knightley as the iconic Coco Chanel are notable exceptions to widespread apprehension of digital by luxury marques, however our recent global research identifies significant risk-managed opportunity for luxury brand positioning and engagement in the digital world.

Consumer confidence takes more battering: GfK Index

UK consumer confidence has fallen as more depressing stories of economic gloom circulate and companies produce less-than-thrilling financial results. It echoes US consumer confidence, which has also dropped to the levels of 2003, just before the Iraq invasion. The GfK Consumer Confidence Index reveals that expectations in the UK for the next 12 months have hit the figure of  -38, twenty points lower than this point last year. The score has not been this low since 1992.

The climate for major purchases (homes, cars and all other big ticket items) has also worsened, spelling bad news for brands. It has dropped to -24, a level of depression not seen since 1990, when it was -25.

Last month, we looked at consumer confidence figures in more depth in our April 2008 to see how people felt about the economy in various countries, particularly the US and UK. We also chatted to Andy Thwaites, insight director at GfK Financial, which produces the stats for the European Commission.

Below, you can read an exclusive extract of our chat with Andy last month (be warned that the figures will now of course be surpassed by those newer ones mentioned above):

LG turn Scarlet with new ‘film’ marketing promotion?

Tomorrow night, the Brand Strategy team are off to the launch of the new Scarlet TV series, billed as the “new David Nutter project” and boasting a fabulous red-carpet launch reception event. While we’re obviously dusting off our sequined dresses and high heels for the bash, we hear a rumour on the grapevine (or CNN, call it what you will) that the whole shebang may be an elaborate ruse for LG electronics’ new range of TVs. In fact, the company itself admits it outright on its own website, so the secret is out. Are those sneaky marketing types trying to pull the wool over our journalistic eyes?

We’ll let you know how the launch in the UK turns out……..!!!! It seems like LG are keen to do something really interesting with its marketing and the scheme has certainly got some consumers talking about it online so it has clearly achieved some of its aims already……..

****UPDATE*****

So, we went along to the Scarlet TV launch and as expected, it was a very snazzy affair although many guests seemed somewhat confused about the concept – was it really a TV series? Oh, just a TV? Riiiiiiight…..

Sky has helpfully taken some showbiz snaps of the occasion which got a good turnout of minor celebrities including comedian Noel Fielding and singer Sophie Ellis-Bextor.

An interesting marketing concept no doubt, but what are your views? Do you think LG’s wordplay on the idea of a ‘TV series’ – literally a series of TVs – worked? It was certainly more interesting than most product launches and certainly got the brand a great deal of PR. But strategically savvy? You tell us.

Starbucks isn’t singing about Hear Music anymore?

We hear on the grapevine (oh, ok through the newsletter CMU Daily) that Starbucks may be cutting down on its music efforts. With the economy in a pitiful state and the brand confessing that its next results are likely to be lower than previously expected, it appears that non-core activities may be sidelined.

CMU reports:

“Ah, you see, coffee companies may be occasionally interesting in dabbling in
music, but when their share price takes a tumble all energies return to
getting that milk frothed, and the record label gets sidelined. Starbucks
has announced it is downsizing its entertainment division, and is
transferring its record label, Hear Music, over to its partner in the
venture, US independent the Concord Music Group.

The coffee chain has been dabbling in music for a while now, recognising
that coffee drinking consumers may be persuaded to buy carefully selected
and mainly classic artist CDs while getting their morning cappuccino. They
stepped up their music ambitions last year by launching Hear Music as a
fully fledged record label, and grabbed the headlines by reaching a deal
with Paul McCartney and releasing his album ‘Memory Almost Full’.

But with the coffee conglom going through a tricky time financially, they
announced yesterday that they were handing most of their music operations
over to Concord, while the company’s entertainment boss Ken Lombard will
leave the firm. They will still dabble in entertainment projects, though
they will be more digitally focused, shown by the decision to put their
entertainment department under Chief Technology Officer Chris Bruzzo.

It’s not clear whether the Concord managed Hear Music will still be able to
use the Starbucks café network as a distribution platform for selling CDs
and promoting downloads from artists signed to the label – that being at the
core of the whole venture presumably they will. Though Starbucks are known
to keen to do more book based promotions moving forward, presumably
recognising that customers may be persuaded to buy carefully selected books
while getting their morning cappuccino.”

*******

Is this the right step for Starbucks? Is this the time for the brand to be focusing on its coffee business rather than nice-to-have extras? Or should the company stick to its plans to build the brand into a lifestyle proposition rather than just a coffee-house chain? Let us know your views.

Latest in beauty: tryvertising for cynical women consumers

In this month’s Brand Strategy magazine – out next week – we look at Unilever’s Dove brand with its global brand head Alessandro Manfredi and examine how the company is attempting to balance its ‘real beauty’ message with remaining aspirational in an industry where Kate Moss is held up as perfection. The brand is constantly examining how to balance responsible messages about reality with the truth that women want to look like supermodels.

So we thought we would draw your attention to a new service, Latest in Beauty, which aims to attract the same type of cynical consumers who no longer believe beauty claims but still want to spend cash to look their best. The service’s marketing material asks: “How are beauty companies supposed to engage in a dialogue with these savvy and sceptical consumers who on the one hand want to know about beauty, but on the other hand are refusing to be influenced by advertising methods which they have come to think of as intrusive and patronising?

Latest in Beauty is a ‘tryvertising’ service that aims to do some sampling with female consumers in the beauty market. The website gets women to sign up and answer a list of questions about their appearance, needs and preferences to determine their beauty profile. They are able to browse the site for products matching their profile, read new product reviews and then pick a few samples every month to try at home. Upon returning to the site, users are asked some questions about their experience of the product, then view a page with special offers relating to the product and the brand.

‘Tryvertising’ has been a big marketing trends over the past few years. Although the more cynical of us might suggest it isn’t really a new trend – just good old fashioned ’sampling’ with more access to wider audience thanks to the internet – it really works in some product areas. Do you think this one will be a success?

In the spirit of all things new media, we notice that Latest in Beauty has a Facebook profile too.

Online video soap operas: Mindshare information

Brand Strategy’s May issue has just gone to press and subscribers should look out for an article by Jo Roberts (should be live next week on our website; we’ll link to it then) all about whether branded entertainment really works.

We wanted to draw your attention to this because one of the areas it looks at is ‘web dramas’ such as Bebo’s Sofia’s Diary. We just received some really interesting information from Mindshare about how consumers feel about advertisers appearing in these online soap operas.

The Mindshare study had two key findings:

1. Interactivity isn’t for everyone. Some people are keen simply to passively watch content and don’t want to interact with it.

2. Product placement is preferred to ‘pre-roll’ ads if it is done at the ‘right level’.

Other notable findings were:

• 59% of adults now view online video each month;
• Older viewers are more likely to accept pre-rolls as they have grown up with traditional ads but younger views are more likely to “go and do something else while it played”.
• People feel that the ratio of ads to content is much higher in online series, although it is almost identical to normal TV (webisodes: 85% content/15% ads while terrestrial TV: 87% content/13% ads).

What do you think about online soap operas? Do YOU watch them? Let us know!

TV Dinners

A neat white ramekin hosts the smiling face of a cat and cunningly disguises a mini-fish pie: tomatoes for eyes, basil leaves for ears and some whispy chives to represent whiskers! Annabel Karmel, who created the above concept as part of her “Eat Fussy” range, is bringing a wider audience to her highly successful child nutrition brand through the launch of a digital channel.

Tapping into the lucrative babies and young children’s market, Annabel Karmel has built a brand around a range of baby and child recipe books that sit high up in the cookery charts. There are also food and kitchen equipment ranges with retailers including Sainsbury’s, Mothercare and Boots and now there is a dedicated digital TV channel, AKTV, produced in association with Ground Up Media and funded by advertising.

Richard Jukes, managing director of Ground Up Media comments: “Aiming at a mass niche audience, she is your expert best friend and through this vehicle guides you through the subject area of cooking for your child at a time when you might be the most confused in your life.”

Read more about branded entertainment in next month’s Brand Strategy magazine. Does it work? Will this be a success? Let us know what you think.

Virtual Reach

Brand Strategy attended a roundtable event hosted by consultancy Rivers Run Red and Linden Lab, owners of the Second Life virtual world, to discuss the virtual workspace and how brands are incorporating the technology into their business processes.

Philip Rosedale, CEO of Linden Lab commented on what he sees as the natural progression of technology products into the business sphere; “New technologies first go through a playful phase and then you get activity around education and business.”

Companies discussing their trialling of the capabilities of Second Life included Unilever and BT. Both companies are interested in using the space to bridge worlds and facilitate new ways of working. It also has possible applications for knowledge aggregation from different parts of the business and can help to cut down on unnecessary travel by using it as an alternative to real world meetings. Crucially, for a new generation of employees who grew up on video-gaming, the virtual space provides a sphere of reference they connect with.

Poll The People – social networking for the list lover

Those who are a fan of lists will enjoy the concept of new social networking site: Poll The People. The aim of this site is to encourage people to share their favourite albums, films and books through top five lists. Users can create a profile and put forward their top fives with the choices counting towards the sites’ Global Polls. The Polls can be searched by genre, and linked to the affiliate partner of the site, Amazon. People with similar or the same lists will be able to make friends with like-minded people through the site’s ‘List Like Mine’ section. The strategy for the site going forward is that this information can be used to drive cd, book and dvd sales with “Poll The People Top 50 Rated” retail stickers used to promote people’s favourites.

The Brand Strategy team love a good list so we’ve put our heads together to share our favourite books, films and albums.

Ruth Mortimer’s (BS editor) top five albums:

Screamadelica – Primal Scream
Back to Black – Amy Winehouse
Revolver – The Beatles
Blue Lines – Massive Attack
Puro Escandalo – Crooked Stilo

Maeve Hosea’s (BS features editor) top five books:

Anna Karenina – Leo Tolstoy
American Pastoral – Philip Roth
The Country Under My Skin – Gioconda Belli
One Hundred Years Of Solitude – Gabriel Garcia Marquez
Blindness – Jose Saramago

Jo Roberts’ (BS features writer) top five films:

The Goonies (1985) Director, Richard Donner
Leon (1994) Luc Besson
I’m Not There (2008) Director Todd Haynes
Falling Down (1993) Director Joel Schumacher
Little Miss Sunshine (2006) Jonathan Dayton and Valerie Faris

Check out the site – it goes live at the end of April: www.pollthepeople.com

Magic Ingredients

Brand Strategy recently attended branding specialist Dragon’s Healthy Balance seminar which looked at the challenges the continually shifting health agenda present to brands.

No longer simple, healthy food is now a multi-dimentional concept argues Dragon’s head of consumer brand Kate Waddell. “Some of the wealth of advice going out to consumers includes the concepts of ‘you are what you eat’; ‘eat filling food over fattening’ and ‘drink plenty of water’”. What is not in doubt is that health is going more mainstream this year.

She outlines the buzz areas in healthy foods going forward, categorising them as the following:

1. Healthy Appetite – A positive take on snacking: we see examples of foods/drinks containing ingredients to reduce sugar cravings, increase metabolism and burn fat. Satiety and weight control products are hot trends.

2. Braniac Food – Products with ingredients that make brave claims including boosting memory and cognitive function. These brands often use pharmacy cues in their language.

3. Fighting Fit – Ingredients including pro-biotics claim to do things like lower cholesterol and blood pressure.

4. Alive and Pure – Typically using a lot of ‘story’ in the packaging, the idea here is that the product is made from untampered raw ingredients. There is a notion that the nutrients are still live and working better than processed ones.

5. Calcium Fortification – Often a forgotten hero of health for the consumer, the key for food brands is to disguise the taste as the New Zealand brand Calci-Yum successfully does.

6. Miracle Foods – Here superfoods go to the next level with brands concentrating on the holistic health benefits and the targeted effects. Examples include the super-powered antioxidants of the acai berry and the fat burning capacity of svetol.

7. Luxury Healthy – This new breed of natural argues that there is no longer a need to be worthy. Healthy food is becoming more aspirational and this is demonstrated in the way it looks and tastes. The packaging of these products add to the aspirational look and feel of consumers’ homes.

8. Safe Pleasure – 20 percent of the population in the UK believe they have a food allergy. There is significant space for foods that offer all the taste of established products but are allergy safe.

9. Rise of Soy – This ingredient is packed with health credentials. In 2007, 85 new products with soy in them were launched in Europe alone.

10. Future Beautiful – Foods that allow people to look more beautiful without going under the knife. Examples include Kaiku’s Aloe Vera product concentrating on internal wellbeing and external beauty and the Youth Trip brand which claims to give anti-aging protection from the inside.