April 2012 saw the purchase of the photo sharing service by Facebook for $1 billion, a scant 18 months since Kevin Systrom and Mike Krieger launched the service from a drafty office in San Francisco.

December saw the debacle surrounding its updated terms of service, which granted it the right to sell users’ photos without notification or compensation. The resulting uproar led to a hurried retraction but not before a proportion of users had jumped ship to rival services.

By March, the service had recovered to the extent of announcing they’d hit the milestone of 100 million monthly users for the first time, a number which put them within striking distance of higher profile social networks like Twitter (200 million active users) and Google+ (340 million)

And this month saw the launch of their new photo tagging feature – a move they hope will grow the services’ popularity amongst people and brands.

That’s not to say that Instagram isn’t a well used service amongst brands – it is, certainly amongst blue chip brands. 59% of Interbrand’s top 100 brands are signed up to the service and that includes a number of leading luxury brands.

Burberry’s account, which mixes aspirational product photography with images of London - to reinforce its British heritage – has over 800,000 followers. Tiffany & Co, a brand who’s breathtaking images have no need of Instagram’s famous filters, have over 500,000 followers as have Gucci, whose popularity derives less from their own images and more from the pictures their followers share using the #gucci hashtag.

Why is Instagram such an attractive environment for these premium and luxury brands? 3 reasons. 

Firstly, there’s the audience – although the app is now available on Android, it started its life on iPhones and iPads, and most of its users are still iOS based.  Apple devices are a great filter for premium and luxury brands as their owners are likely to have more money in their pockets.  But the audience isn’t just affluent, it’s young and affluent. Instagram’s usage is impressive amongst the 18 and 29a and 30 to 39s - a reason why fashion brands have been the ones most likely to grasp the opportunity it presents. And, of course, those that create and share great image content are likely to have the heightened sense of the aesthetic to which the craftsmanship of luxury brands appeals.

Secondly, there’s the nature of the content – photos – the natural currency for luxury brands who have beautiful things to showcase.

Thirdly, there’s the potential that Instagram presents for high quality user-generated content that can be shared across other social networks – with the creator’s consent, of course.  An image literate community are more likely to generate the sort of content that premium and luxury brands will want to showcase across other networks.

And the recently announced photo tagging feature has the potential to both broaden and deepen the relationships between premium brands and their consumers on Instagram.  Users will be able to tag their photos with the @ handles of their friends as well as the @ handles of brands.  Tagged photos will form the basis of a new ‘Photos of You’ section on a user’s or brand’s profile page, although users and brands will be able to decide if the tagged photo is displayed or not. 

Not only will this new feature help to virally grow brands followings, as users’ followers see them tagging the brands in their images, it also creates a natural and easily accessible stream of user-generated content that will automatically showcase on each brand’s profile. Previously, brands had to hope users employed easily indenfiable hashtags when posting pictures of their products and manually search for that hastagged content.  Now that content will come to the brand automatically, and probably with greater frequency.

That’s the present – and its enticing enough for luxury brands – but the future is interesting too.  As each user tags their photos, Instagram will build up a broader picture of their brand preferences and interests.  With the launch of geotagging and photo maps last year, Instagram is already building up a picture of their geographical movements and the places of meaning to them.  Each new initiative helps to to build a better picture of who users are, and what advertising might appeal to them.  It’s an inevitable step – Facebook will want payback on their $1 billion investment, after all – and one that became all the more likely after the abortive move to make Instagram a user-generated Corbis back in December. And with the average Instagram user following less accounts than the average Twitter user, the extra content that advertising provides, if well targeted, could be more welcome.

The last 12 months may have been interesting for Instagram but the next 12 months could prove to be more interesting still for the luxury brands who seize the opportunity.

Before we delve into the research and its findings, it’s worth sharing a few caveats upfront.  Firstly, Cogent’s research was carried out in assocation with Linkedin, so it’s not entirely independent.  Secondly, it’s based on US affluents rather than those in the UK – although in our experience UK affluents have more in common with their US counterparts than with their European ones, so the insights are still useful. Finally, most of the research is centred on the financial services industry – although if we use financial services as a proxy for considered luxury purchases, then the findings can still be revealing.

When it comes to usage, the study confirms that US ‘mass affluents’ are highly engaged in social media – 90% had used some form of social media in the past 12 months, with 72% using Facebook, 50% using Linkedin and 27% using Twitter. This backs up research in the UK from Ofcom which finds higher sociodemographic groups more likely to be active social media users.

As you’d expect, the study’s audience was found to be highly likely to use social media for professional purposes. However, the research found that they weren’t just using social media for making business connections, but were highly engaged with companies as well – 44% had engaged with financial companies on social media, 31% had read content from those companies on social media, 30% had followed or liked those companies and 23% had reviewed those companies’ multimedia content.

Nearly 40% of the study’s respondents had turned to social media for financial education or research, whether that be learning about financial trends, companies or products (i.e. discovery), or seeking advice or further information to evaluate what they’d learnt (i.e. consideration).   Nearly 2 in 3 of those who had used social media for both purposes had taken action – whether that be opening or closing an account, or purchasing a new product.

In terms of their expectations of financial institutions on social media, 3 key requirements emerged – social media as an enabler for enhanced customer service, as a means of providing timely updates such as market commentary and product performance, and as means of providing relevant content such as new information on products and services. In terms of the most appropriate social media channel to deliver this information, Linkedin was found to be the most trusted social source for financial information.

For us, there a 2 take outs from this research. Firstly, social media has primarily been seen as being most influential in lower involvement, less complex purchases.  This research suggests that, if approached in the right way, it can be play a role in more complex and considered purchases if used in the right way. Here the emphasis is not on discounts or on entertainment, but on creating high quality and relevant content to take consumers through the purchase funnel from discovery to consideration, delivering excellent customer service and providing relevant information post purchase.

Secondly, where the purchase is linked to the professional life of the purchasers – and we’re thinking not just financial products here but tech products such as mobile phones, laptops and tablets, business travel and even business fashion and accessories – then Linkedin clearly has potential due to its professional credibility. And it’s a network that’s often neglected too.

Some luxury brands – particularly those which are more complex and involved purchases – have concluded that social media is not for them. More research is needed but this study, if not conclusive, at least suggests that a re-think is in order.

The full whitepaper ‘Influencing the Mass Affluent:  Building Relationships on Social Media’ can be read here.

In a nutshell, programmatic trading allows for the automated buying of ad inventory via ad exchanges.  Publishers load their inventory into one side of the exchange and buyers, be they clients or their agencies, buy that ad inventory at the other end.  The transactions between buyers and sellers occur automatically depending on the parameters set by both parties. 

The beauty of programmatic trading is that it’s both efficient and effective for advertisers. It’s efficient in that advertisers are buying audiences rather than space. Those audiences can be based on their own data, such as the behaviour of the visitors to their site, on 3rd party data provided by the ad exchange (such as geodemographics or interests derived from browsing behaviour) or, more usually, a combination of the 2.  Hence, the advertiser can avoid the wastage of irrelevant impressions associated with the traditional approach – a particular problem for premium brands.  Efficiencies have also resulted from the explosion in online ad inventory that programmatic trading has driven, forcing down the overall price of online ad inventory.

The effectiveness derives from its performance based nature.  Advertisers can measure the actions their activity is creating and bids for inventory can be changed in real time (known as Real Time Bidding or RTB). Also, creative can be tested on the fly and optimised to that which is delivering the best results. 

At its best, programmatic buying can deliver the marketing nirvana of the right ad, with the right message, delivered to the right consumer, in the right context and bought at the right price.

Programmatic trading’s heartland is the world of remarketing and retargeting – targeting existing customers or prospects with relevant ads designed to move them through the final stages of the purchase funnel.  But more premium inventory is coming available which is tempting advertisers to divert brand,rather than just direct response, budgets to programmatic activity.  And with closed premium networks becoming available, and ‘brand safe’ technology negating the risk of online ads appearing in inappropriate environments, luxury brands are increasingly investing in programmatic too.

So programmatic trading has been a boon for advertisers.  Its no wonder that, according to IDC research, it’s forecast to grow from 17% of UK display ad sales to 30% in 2016. At Cream, we’ve found the programmatic activity can outperform generic PPC in some instances.  So wouldn’t it be a natural progression for advertisers to want to buy their offline media programmatically? Of course, and it looks like that’s the way things are heading.

Vistar Media has already launched an ad exchange for buying and selling digital outdoor space in the US.  Advertisers can logon to a website and select where they want their ads to run and for how long, then set their maximum bid and the space is bought automatically. Of course, some of the aspects of programmatic trading online are missing from this model – such as the performance-based nature and the audience targeting but that will come too.  With the advent of Route in the UK, it’s quite possible for advertisers to buy outdoor space based on very specific audience requirements. And with facial recognition increasingly being built into digital outdoor, advertisers will be able to understand the basic demographics of those viewing their ads and their dwell time so there can be a performance metric too.

Programmatic buying has also been introduced to radio in the US. Los Angeles-based Triton Digital has recently built an ad exchange that allows advertisers to automate the buying of online and mobile-audio radio ads. It has sold some inventory for media companies such as CBS Radio, which streams content on the web from many of their local stations.

But the big questions is, will programmatic buying ever come to TV? With the budgets spent in this arena and the ‘blunt cudgel’ like targeting on offer, programmatic buying seems to offer an opportunty to drive real efficiencies for advertisers.  And with initiatives such as Sky AdSmart, which allows targeting to individual households based on their demographics (a process called addressable TV advertising), specific programmatic audience targeting becomes a real possibility. Of course, TV stations will need to ‘play ball’, but if the pressure comes from advertisers, they’ll have to. 

Our view is that it’s inevitable that programmatic buying will extend to all aspects of offline media because advertisers will demand it, although it won’t completely replace the traditional segmented approach.  Advertisers will still want the re-assurance of ads that appear in the places and at the times they’ve specified and many brands will still see the appeal of targeting broad audiences.

But as programmatic buying spreads, so the onus shifts more to the brand marketer who will need to become literate in both its pros and its cons.  On the latter front, take its performance based nature – an advantage only if you’re measuring the right actions. And programmatic needs to be continually benchmarked against other techniques to keep it ‘honest’.  If marketers fail to grasp these realities, then this new form of buying will fail to deliver on its promise.

Although the shut down of so high profile a title came as a surprise, a look at More’s recent circulation figures made the reasons easy to understand. The July to December ABCs revealed a 40% fall in weekly circulation to plunge the magazine below 100,000 for the first time, and this despite a an reader research-led revamp last Summer involving a move away from celebrity-focused editorial.

Magazine publishers are still struggling to find lucrative alternatives to print circulation and advertising revenues. Audiences are moving online and, with so many alternatives for advertisers in this environment, publishers are struggling to replace offline revenues with online ones. Bauer clearly decided the prospects for future ad revenues weren’t good, online or offline, so ‘More’ had to go.

Different publishers are approaching this core challenge in different ways.

For example, whilst Bauer is selectively trimming its magazine portfolio, they’re also selectively expanding in other areas.  Their acquisition of Planet Rock in February, a loss making radio station previously owned by millionaire and rock music fan Malcolm Bluemel, reflects their view that radio in general is a growth media and that guitar music in particular is a fast growing genre.  Further radio acquisitions may follow – Bauer is believed to have held talks to buy the loss making Absolute Radio.

Bauer may be shifting the balance of power of their media portfolio in reaction to the changing media habits of consumers but IPC have taken a different approach. Their response has been to align their commercial offering more closely with the needs of advertisers in the hope that more attractive formats will help to boost flagging advertising revenues across their existing portfolio.

The owner of Marie Claire, Look and InStyle has launched a new advertising position across all its titles – Inspired Conversations. The aim is to connect advertisers more closely with IPC’s editorial content – a shift towards ‘native marketing’ we predicted earlier this year – and to offer a more holistic solution to their advertisers challenges across their magazine portfolio.

Take IPC’s new ad product Amplify, launched earlier this month. Amplify  involves the advertiser taking over a section of an IPC title’s site relevant to the campaign. This advertising unit features both the advertiser’s creative and IPC’s editorial content. Consumers who interact with the advertiser’s creative are driven to the advertiser’s chosen site, and those that interact with the editorial content are driven back to the section of the IPC brand’s website that is sponsored by the advertiser. So far, so good, but that’s not all.  Using RadiumOne’s data-driven advertising platform, IPC can analyse who’s interacting with the advertiser’s content and how they’re interacting with it to identify a relevant audience with purchase intent.  The advertiser-sponsored content is then served (or amplified) to other audiences who fit this profile across IPCs range of sites.

IPC has also launched Social Catalyst, a venture which will use PeerIndex’s network of over 150,000 key influencers to generate genuine word of mouth for advertisers across Facebook, Twitter, LinkedIn and Quora, in addition to other blogs and websites.

And more advertising innovations will follow – 2 new advertising initiatives are to be announced in the coming weeks and further research is being undertaken with advertising partners into how consumers engage with brands, content and advertising across all platforms.

Trimming your portfolio and trying to extract more value from your existing portfolio are 2 strategies you’d expect in a sector in decline, but surely launching new titles is counter-intuitive?  Well, that’s exactly what challenger brand Shortlist Media are doing.

However, it’s new title – Never Underdressed – will be digital only.  The fashion title, which is being pitched against market leaders such as Elle, Vogue and Marie Claire, will launch next month on desktops, tablets and smartphones only.

Of course the content will be key to its success but Shortlist are also banking on a range of ‘innovative and immersive new advertising formats that extend across desktop, tablet and mobile and allow brands to deliver…high impact campaigns across all platforms simultaneously.’ They’ve certainly appointed a team to deliver digital advertising innovation  with the project being headed by Carrie Tyler, the former digital director of Elle, as editor, and Lucy Alexander, the ex-digital ad director of Elle, as publisher. It will be interesting to see if a ‘mobile first’ product can cut through the clutter in the women’s magazine world and deliver a solution to advertisers markedly better than those titles adapted to the mobile environment.

Which strategy will succeed? Perhaps all of them.  Some titles are clearly past their sell-by date, publishers need to offer ad formats that are less interruptive in line with general trends in advertising, and the lower costs of distribution of digital only products will make easier to launch challenger titles. And publishers need to try new things – otherwise their influence over consumers and their share of advertising revenues will continue to fall.

First, back in January, they acquired and launched Vine – a ’micro’ format video creation, sharing and discovery service integrated with Twitter and other social networks like Facebook.  Brands have leapt enthusiastically on the bandwagon – over 30,000 have taken up the creative challenge of Vine’s 6 second format.  Consumers have loved it too, with new genres being created such as the video postcard sent from abroad.

Last week, Twitter launched another service – #music – an app designed to help users to discover emerging and popular artists using the activity of Twitter users as a guide.

How does it work?  In the words of Stephen Phillips, the founder of We are Hunted (the social music discovery service purchased by Twitter recently), “If you’re interested in the songs that have been tweeted by the artists and people you follow on Twitter, you can navigate to #NowPlaying to view and listen to those songs.  Or if you want to listen to music from the artists Wiz Khalifa follows, you can search for his name using the search icon in the top right corner. Then tap one of the artists you’re interested in.”

#music is integrated with iTunes, Spotify and Rdio, so users can play previews of tracks and purchase them via iTunes, and they can integrate their Spotify or Rdio accounts to share their own music and play the full version of tracks they discover using the app.

A music discovery app makes perfect sense for Twitter – music is the subject of so many conversations on the network, music celebrities are the most followed (8/10 of the most popular on Twitter) and #nowplaying is amongst the most popular hashtags. But where’s the payback in terms of advertising revenues for all that investment?  Twitter won’t be able to serve any advertising between tracks because previewing and streaming is happening via 3rd party partners (i.e. iTunes, Spotify and Rdio).   There’s an interest for brands beyond the music industry in what their followers are listening to – either to start social conversations, to source ‘band’ ambassadors or to inform other aspects of their creative strategy, but we’re not sure this information, or deeper insight, could ever form the basis of a premium service that brands would be prepared to pay for. 

Perhaps they will try to build an ad-product into the app – Vevo, myspace, and Spotify all have healthy display ad products – and they;ll no doubt be thinking about testing it. But we believe their long term aim is much more interesting.

That aim becomes clearer when looked at in the context of a third initiative launched earlier this month - targeting promoted tweets by keyword.

You can already focus your advertising activity on Twitter based on a user’s location, mobile device and/or interests. Now you can also target on what they’re tweeting. And you can combine that targeting with the other filters already available (location etc) to make your activity super targeted.

Many commentators are getting very excited about this new product, labelling it as true ‘intent’ marketing.  They argue that Twitter could even steal a march on Google as Twitter users may reveal an intent that advertisers can capitalise on before that user gets to the search stage. Some advertisers have already trialed the product and the results seem to be encouraging – camera brand GoPro saw close to 2 million impressions and engagement rates reaching 11% on tweets promoted with the new feature – much higher than Twitter’s standard engagement rates which are an impressive 1-3%. It’s all part of the long march towards truly personalised marketing, surely?

It’s certainly exciting but we’d add some provisos.  Can a keyword or phrase, taken out of context, really be used to predict intent?  In Google or Bing they can because we know people are searching for something – but if we’re eavesdropping on only part of the conversation, are we going to intervene in an intelligent way?  And how will Twitter users react to a service which can serve ads based on their conversations?  Perhaps they’ll take it in their stride because Twitter is a public forum. Perhaps they’ll even begin to ’shout out’ for relevant promoted tweets, using Twitter as some form of search engine.  Or perhaps they’ll find it intrusive? Advertisers will need to carefully consider these points with their agencies before committing.

And the rationale behind #music and Vine?  Well, both initiatives share the aim to make people use the service more often and for longer.  The longer they’re using it, and the more information they share, the more ads Twitter can serve to them and more targeted those ads can be. Someone sharing Vine postcards often is a frequent traveller – a great target for airlines, hotels and travel companies.

Specifically with Vine, we not only have a vehicle for easy creation and sharing of video content for consumers, but also a vehicle for creating cheap and relevant ads for brands. Segmented social, micro TV advertising, delivered on the fly, so to speak.

So we’re sure we’ll see Twitter innovating further before the year is out to further their aim of making Twitter the first social network logged onto each morning. And we expect Twitter’s advertising revenues to continue to grow too (they’re predicted to double this year) as advertisers pay increasing attention to possibilities that Twitter’s full range of advertising products present.

How far they grow is the question for Twitter, though.  They have a huge challenge in how to introduce more and more promoted tweets or ad messages without upsetting users. Twitter’s simplicity is a double edged sword - it’s clearly a huge selling point but if enough consumers were upset with increasing ad presence the next ‘Twitter’ (whatever that looks like) may not be far behind.

So how significant a phemomenon is it?  In  short, it’s big.  Depending on which study you chose, around 75-85% of us are using other devices while watching the TV. However, the majority of us are engaged in unrelated tasks – mostly emailing.

This begs the question, ‘Is the second screen of benefit to advertisers or is it merely distracting people from the beautiful TV ads that brands have created?’  We’d argue that it’s a benefit, and here’s why.

Firstly, distracted TV viewing is hardly new.  It’s just the book, magazine or newspaper being read, or the conversation being had at the same time as TV is increasingly being replaced by activity on a smartphone, tablet or laptop. Some consumers may be distracted from viewing ads, but the likelihood is that they’re no more distracted than they were in the past.

The second point is that the advertiser has more opportunity to influence what the consumer is doing on their second screen than they would have had on traditional ‘distraction’ activity.  Second screening is an opportunity for brands to increase engagement with those seeing their ads.

Thirdly, studies do demonstrate that significant proportions of TV viewers are carrying out activities directly related to what they’re viewing on TV. Somewhere between 1/3 and 1/2 are searching for additional information about the show they’re watching, about 1/5 are chatting about it on Facebook or Twitter and somewhere between 27% and 44% are searching for products spotted in a show or an ad.

And finally, second screen interaction with a brand has a positive impact on brand metrics – a study conducted by Nielsen for mobile video firm
AdColony found that TV plus mobile exposure (smartphone or tablet) improved brand recall by 69% and purchase intent by 72%.

So now we’ve established the second screen is a major opportunity for advertisers, how should they capitalise on that opportunity?  Let’s begin with TV advertisers (although the second screen has big potential for non-advertisers too).

The key place to start is getting the basics right. If you advertise on TV, people are going to be researching your product on their tablet, mobile or laptop during that ad and immediately after.  You need to make sure you’re capitalising on that instantaneous demand. Simple steps such as upweighting search spend, particularly mobile search spend, and sponsoring terms related to the ad should be your first port of call.  You might also ’sync’ other aspects of your digital campaign to take advantage of second screen activity – for example, social advertising on Facebook and/or Twitter would help reinforce your message amongst those social networking whilst they’re viewing.

The campaign hashtag is another simple and logical step. It creates a hub for conversations about the ad and your brand on Twitter – conversations which your brand could and should participate in to shape and leverage. And more can be done with it too.  In 2012, Audi ran a spot during the Super Bowl in which a group of young vampires partying outdoors at night was incinerated by an Audi’s daylight-simulating LED headlights .  The hashtag #SoLongVampires was used on Twitter, but not just on Twitter - viewers who entered the hashtag into Google were treated to an ad for Audi’s “Vampire Party” on Facebook.

Incorporating mobile specific response mechanisms makes sense as it makes it easier for viewers to find out more about your brand.  Waitrose have used augmented reality app Blippar to help viewers access ad related content – in the case of their recent Christmas campaign, a cake decorating tutorial by Delia Smith and an interview with Heston Blumenthal.  Perhaps better suited to this purpose is audio recognition app Shazam, which is being used increasingly to help viewers to take the next step to further engagement with ITV advertisers. And marketers shouldn’t forget the humble SMS short code which may not be as sophisticated as some of the newer ‘kids on the block’, but is more ‘mass’ than any AR or audio watermarking app (we all text.)

The next step, in terms of creativity and investment, is to create or sponsor specific second screen content.  It’s one that blue chip brands are increasingly taking to extend the brand experience beyond the ad and to interweave their content with the viewing experience.

For example, Coca-Cola created ‘Polar Bowl’ to accompany last year’s Super Bowl, extending it’s animated polar bear ads on to the second screen, so viewers could ‘watch’ the bears react to the game in real time. In 2011, Honda’s animated Jazz hatchback ad enabled viewers who downloaded the related iPhone  to “capture” on-screen characters, by physically swiping their phone at the ad, and interact  with them —for example, making them dance by singing into an iPhone’s microphone. And this time last year, a trailer for the Ridley Scott film Prometheus rewarded viewers who had used its hashtag #areyouseeingthis by featuring some of those tweets in its next commercial.

But leveraging the second screen phenomenon isn’t just for TV advertisers.  If brands are creating category-related searches as a result of their TV activity, there’s no reason why rivals can’t benefit by increasing their own digital spend for the duration of the campaign. And if TV shows are creating conversations around topics related to the brand, then the brand should be particpating in those conversations and leveraging them to their advantage.  For example EA, the digital games company, has a strategy of leveraging football conversations to maximise it’s social buzz. It’s #86messi campaign, a giveaway launched off the back of Lionel Messi breaking the 40-year-old record for most goals in a year, reaped the brand more than 50,000 mentions on Twitter.

However, before you embark on any second screen activity which requires significant time or investment, there are 3 things you should be aware of. Firstly, is it your target market that will be interacting? For example, according to a recent study by Deloitte/GfK, discussing TV programmes via the second screen while watching them is something popular among the under 34s but pretty rare amongst the 55+s. The programme content may be ideal for your brand but if the audience are wrong, the time spent engaging in those conversations will be largey wasted.

Secondly, much second screening happens post viewing. Most want to watch the programme first and then go online to find out more about it and talk about it.  It might be best to time your activity as appropriate.

And finally, interacting with TV content in real time is still a niche pursuit – and remains a niche pursuit whatever the age of the viewer or their propensity to own a mobile device.  Most viewers still prefer to relax and watch rather than get involved – second screen apps developed by broadcasters have yet to take off.  Things will no doubt improve but it’s no coincidence that much second screen activity is centred around ‘blockbuster’ TV events like the SuperBowl or the Olympics where audiences are huge and even a small take up can be significant.

What does the future hold? Probably more 3rd party apps to connect TV viewers conveniently to advertising related content using technologies like audio watermarking. And, with the increased penetration of internet enabled TVs, second screen content will be increasingly integrated into the ‘first screen’ as viewers interact direct via their Smart TV. And we’d expect second screen content to get more sophisticated and engaging as advertisers continue to experiment and understand what works for their individual audiences.

However, there one thing future trend we’re sure about - second screening is something that’s here to stay. It can benefit all brands – be they TV advertisers or not. All they need is a coherent strategy and a proactive approach. You don’t need to engage in second screen activity – it may not be right for your brand for the reasons discussed – but you do need to appraise it as an opportunity or you may be missing a trick.

‘Content marketing is the art of communicating with your customers and prospects without selling…Instead of pitching your products or services, you are delivering information that makes your buyer more intelligent. The essence of this content strategy is the belief that if we, as businesses, deliver consistent, ongoing valuable information to buyers, they ultimately reward us with their business and loyalty.’

This extract, from the Content Marketing Institute, succinctly sums up the theoretical basis of content marketing.

With reference to Cialdini’s 7 laws of persuasion, content marketing plays on the ‘law of reciprocation’ – if brands give consumers something that they value (i.e. useful advice) then consumers feel the need return the favour (i.e. by making a purchase). Good content marketing works on other levels too – making a brand more likeable and approachable and presenting it as an authority – factors that further deepen the relationship with the consumer and make the brand even more persuasive.

Many premium brands are starting to wake up to the power of content marketing but one that saw its potential right from the start was Net-a-Porter.
Back in 2000 when Natalie Massenet founded the luxury fashion etailer, she envisaged it as “fashion magazine of the future,” offering consumers a seamless path from inspiration to purchase. Until recently, this vision took the shape of a layer of editorial that sat atop the product selection, providing buyers with a point of view on the current season. However, in the past couple of months, things have moved to a different level.

It all started in February of last year when Tess Macleod-Smith, who was Publishing Director for Esquire and Harpers Bazaar, was recruited to develop a new media and publishing division at Net a Porter. The aim was to use content to broaden the audience and to attract advertising revenues to complement Net a Porter’s core transactional revenues. Macleod-Smith’s Editor-in-Chief at Harpers Bazaar, Lucy Yeomans, followed soon after and the first fruits of the division were announced in February this year.

First came the launch of The Edit, a digital magazine distributed to 1.5 million Net a Porter customers every week. The themed editions demonstrated Yeomans’ editorial influence – rather than just focusing on new products on the site, Yeomans’ aim was to create something different. Her philosophy for The Edit, ‘ …it’s considered, it’s curated, it’s not reactive, it’s putting something together with a real point of view.’

Perhaps counter-intuitively for an online brand, The Edit’s launch was accompanied by Net a Porter’s first foray into print with the launch of The Collections Special. Featuring shoots by Paolo Roversi, David Bellamere and Liz Collins, the 104-page magazine showcased the spring collection whilst carrying advertising from the likes of Valentino, Gucci, Michael Kors and Alexander McQueen. It was distributed to 120,000 of Net a Porter’s top customers who had expressed an interest in print.

But the most ambitious project is yet to come. This Autumn will see the launch of a 300 page magazine, featuring content ranging from world class fashion shoots and style pages alongside features on beauty, travel, art, culture and politics. The new title will be available on newstands globally and via subscription, will be available 6 times a year and will feature APP technology to make it shoppable.

How should other premium brands react to Net a Porter’s content marketing approach? We think there are several lessons to be learnt.

Firstly, it’s about giving something of value to your customers, not just thinking about your own products. These initiatives feature editorial on brands that Net a Porter doesn’t feature and content that will entertain, inspire and inform their readers in other aspects of their lives beyond fashion. In addition, they will be open to advertisers who’s product doesn’t feature in Net a Porter’s tightly curated collections. As Yeomans explains, ‘ You can’t cover Asian influences without talking about Prada. You can’t do geometry without talking about [Louis] Vuitton. We have to make sure we are looking after the… [customer] first. Not everything will be shopable via Net-a-Porter, but we’ll make sure her path to buy those things is as easy as possible.’

It could be argued that it would be difficult to meet advertising revenue targets without opening up the opportunity to a broader stable of brands, but this approach also demonstrates a brand with confidence in its offering, and with its readers’ best interests at heart.

Secondly, it’s about knowing your customer. Yeoman’s can draw on the findings of Net a Porter’s 7,000 strong customer panel, each of which keeps a detailed diary. It’s difficult to pitch content correctly unless there’s a deep understanding of how your customer lives their life, what they want out of it and what other content they consumer and how.

Finally, it’s clear that if a pure online player is prepared to invest in print, then print remains a significant channel for luxury brands. Yeomans justification is simple, ‘ I really love print and I think there’s something incredibly luxurious about it…[but] for me, it goes back to the [customers]. They buy four or five magazines per month…’ Net a Porter need a print offering because their customers love to consume print.

Of course, one of the benefits of this approach to content marketing is the ability to build a deeper, direct relationship with their customers – a relationship which bypasses traditional publishers and potentially saves brands a hatful of marketing spend.

Publishers are alive to the threats and are working hard to add their own new revenue streams. Cosmo’s Shopping Genie app demonstrates the way things are likely to go, with magazine brands leveraging their role as trusted adviser to drive commercial revenues from purchases.

Publishers stepping into ecommerce. Retailers becoming publishers. Both parties seem set on a collision course. The next few years are going to be very interesting indeed…

Of course, the main driver is conversion. The more tailored the marketing message, the more relevant it is to the recipient and the more likely that recipient will purchase.  But for luxury brands, where so much of the service differentiation is about personalization, it seems consistent with overall proposition to offer a personalized marketing experience too.

And the good news is that customers want personalisation too and they’re prepared to surrender data in order to achieve it.

An Experian study found that half of British consumers would be willing to share data with companies for marketing purposes, albeit only if strict parameters were put in place governing such activity.

The Experian findings were backed up by a study conducted by Accenture which found that the majority of consumers in both the U.S. and UK were willing for retailers to use some of their personal data in order to present personalized products, services and offers.  73% of consumers in the Accenture survey said they’d prefer to do business with retailers who use personal information to make their shopping experience more relevant. However, 88% thought that companies should give them the flexibility to control how their personal information was being used to personalize their shopping experience.

It’s clear that shoppers are prepared to trade their data – either implicitly via tracking of their browser behaviour or explicitly by specific capturing of their preferences – in return for the convenience of only being served content and offers which are relevant for them.

So consumers are willing and marketers are willing – but how can you actually make personalization happen in your business in a meaningful and affordable way?  We’d like to share 3 examples.

Let’s start with advertising. For us, retargeting and remarketing stand out as the greatest opportunity for personalization.  Serving digital ads beyond your site to prospects who have abandoned your site prior to purchase, or to existing customers to encourage re-purchase, are both cost effective ways to increase site conversion.

It’s standard practice for those ads to be tailored by stage in the purchase funnel and site content consumed. If used intelligently and sensitively to the values of your brand, then retargeting and remarketing are great examples of using implicit data to personalize advertising.

But things can be taken to another level.  Add in your own transaction data, such as past purchase history, customer location and purchase channel and you have a tool for delivering highly relevant and powerful personalized advertising to drive past customers and prospects both into and through your purchase channel.

Now let’s look at a couple of examples that apply to the site experience. Of course, the more personalized this can be to the individual user, the more likely that user will dwell and purchase.

New tools are making site personalization ever more accessible for those brands who don’t have Amazon-like budgets.  For example, Qubit allows etailers to analyse their visitors site behaviours and then add personalized layers of content to improve visitor experience and maximise conversion without having to make costly updates to their sites. So, for example, tools like this would enable an etailer to present a ‘free international shipping’ banner for visitors from overseas IP addresses, hence increasing conversion amongst that prospect segment.

However, another approach is to put the personalization in the hands of the consumer rather than in the hands of the brand, as luxury fashion etailer Revolve has done. 

Their site has a tool which allows shoppers to build their own digital boutiques, curating a selection of their favourite products and designers on the site. ‘Boutique owners’ are not only 6 times more likely to convert than standard website visitors, they’re also willingly surrendering information that allows Revolve to serve them highly personalized marketing. In this case, shopper boutiques are used to inform an email marketing strategy that provides shoppers with more in-depth information about the products in their boutiques as well as new arrivals and must-have items from the designers they’ve featured.

Of course the balance always lies between the investment required to achieve personalization and the likely return from that investment. With premium and luxury brands, because of the margins involved, this relationship is more likely to be positive. It’s certainly an area we’d suggest you take a serious look at – if only because customer expectations are rising all the time.

Tablets have always interested us at Cream. We find them a particular good advertising vehicle for our premium and luxury clients for 2 reasons.

Firstly, there’s the ’self-filtered’ nature of the audience. According to YouGov, almost 30% of the UK population now own a tablet and 2/3s of those tablet owners are ABC1s. And, unlike many new technologies, there’s isn’t a strong  ’youth bias’ – 50% of tablet owners are 45+ – or a ‘male’ bias, as women are more likely to own tablets than men.

Secondly, there’s the nature of the advertising itself – delivered one-to-one on a high resolution, large format, vibrant colour screen with the opportunity for video and interactivity. In short, it’s the best digital vehicle for showcasing the ‘high production values’ of luxury brands and involving users in their stories.

So we’re always interested when new tablet advertising opportunities become available, and 2 we’ve heard about in the past week have certainly piqued our interest.

The first involves the social feed aggregator Flipboard. For those of you unfamiliar with it, Flipboard is a mobile app that aggregates a user’s feeds from a number of sources – be they Twitter, Facebook, Google Reader or publisher sites – and presents them in an attractive’ magazine’ format which users can ‘flip’ through. It’s particularly popular amongst iPad users.

The FT is about to launch its own content feed for Flipboard with video, blogs, ‘Life & Arts’ and other content being made available for free alongside content that is available to subscribers only (subscribers will be able to use their existing FT.com log-in to access premium content.) The FT are offering advertisers the opportunity to sponsor the content with static ads appearing within their content.

From a publisher perspective, this new distribution channel presents an opportunity to open up new revenue streams.  From an advertiser perspective, it potentially offers interesting new targeting opportunities.

How? Well, we talk to many clients who’s definition of their target market is an intersection between 2 publications – perhaps an ‘FT reader who also reads GQ‘. How better to target this hybrid reader than via an aggregator such as Flipboard where a user could be targeted according to the feeds they subscribe to? Want a GQ & FT reader? Just ask Flipboard to serve your advertising to users who subscribe to both those feeds.

This approach is one step on from what’s being offered at the moment, but it’s a natural progression. As is targeting via the nature of the content the user consumes.

The second opportunity is unique to Amazon’s Kindle Fire, which YouGov’s figures suggest was a more popular Christmas gift than either the iPad or iPad Mini.

When you switch on your Kindle Fire in the UK, you get special offers page which it’s possible for advertisers to sponsor. Users can opt out of this page, but opting out means opting out of special offers on books, magazines etc, so most prefer not to.

The opportunity to gain the attention of every Kindle Fire user in the UK is attractive in itself, but the potential targeting options make it even more enticing.

As it’s an Amazon device, the potential is there to target users based on their Amazon purchase history. OK, so your type of product may not be purchased on Amazon but that’s not necessarily important. What Amazon purchase behaviour can shed light on is the timing of gift purchases. How much more powerful would it be to target advertising to users when you know they’re in the ‘gifting’ market – when they’re preparing to purchase for a loved one’s birthday or when they’re in the market for purchasing Christmas gifts (be that early or late in the season?)

Of course, advertising isn’t just about audience and timing, it’s about involving creative as well, and we’d stress this importance when it comes to promotions via tablets.  We’ve found that creatives that leverage the full potential of the medium for showcasing high quality visuals and incorporating interactivity more than pay back the extra investment required to create them.

Combine high quality, involving creative, a relevant audience and optimum timing and you’ve got an equation that adds up to some highly effective advertising.  So  if you haven’t already, we’d recommend you take a dip into tablet advertising.  The results won’t disappoint and with new opportunities coming to market all the time, things will only get more rewarding.

There are certainly those out there who think it is. Take Marc Andressen, founder of Netscape and tech investor. His view:

“…Retail chains are a fundamentally implausible economic structure if there’s a viable alternative…Few can survive a decline of 20 to 30 percent in revenues. It just doesn’t make any sense for all this stuff to sit on shelves…I’d bet on the pure plays in ecommerce. Software eats retail.”

There’s plenty of evidence to back up his point of view.  Our own research shows us that those premium shoppers who mainly shop online is now greater than those that mainly shop on the high street.  And the increased usage of mobile devices and related growth of ’showrooming’ – checking out products offline before buying them online – is accelerating this trend. It’s not hard to see those 20-30% falls in retail volumes happening, leading to the ecommerce only world that Andressen predicts.

However, there’s more to shopping than transactions. The very fact that shoppers ’showroom’, rather than purchase purely online, means there’s value to a retail.  And shopping is a social activity too – time to share with friends or to gather with likeminded shoppers who share the love for a particular brand.

That’s why many premium and luxury brands are still investing heavily in retail. But things need to change in response to the ways consumers are changing. Here are some the trends we’re seeing from premium and luxury brands who are blazing a new trail in retail.

1. It’s Got to be About the Experience, Not Just the Transaction

Although marketers spend heavily in developing the user experience on their websites and other digital properties, it’s usually just appealing to one sense – the visual.  A shop gives the brand an opportunity to engage the shopper on so many more levels, to get them excited about the brand and its products, to get them talking to their friends about them.

Take Burberry’s flagship store – it’s a brand experience, not just a place to buy Burberry’s eponymous trenchcoat. Shoppers are treated to sporadic ‘weather’ events as digital thunderstorms break out, created with the help of a sophisticated sound system. When shoppers try an item on, the changing room mirrors spontaneously show images of the specific piece on the catwalk or on film. It’s a place where shoppers can immerse themselves in Burberry’s view of the world – their innovation, their taste, their ‘Britishness’ – not just a place to buy clothes.

Brands that use shops just for distribution will suffer – the web is a much more cost effective channel for this. Those that use it as an opportunity for consumers to sample their products, and their brands, will be those that thrive.

2. Use Staff Where They Can Add Value, Automate the Rest

Survey after survey shows that shoppers prefer face-to-face over any other form of customer service. If you want to leverage your retail presence to build loyalty and positive word of mouth, then you want to invest in the very best retail staff with the very best training. You want staff who are going to add value to the customer’s experience, not staff who are just order takers.

That’s going to cost money which means that retail brands are going to need to automate the activities where their staff are performing purely functional roles (and therefore, aren’t adding value.

The payment process is the prime opportunity, and more and more stores are introducing self-serve payment options.  For example, Aurora has introduced iPad checkouts to its stores so customers can select their items online after sampling them in-store, pay for them and arrange for either home or in-store delivery.

3. Add Value, Don’t Just Sell Stuff

When Ron Johnson designed the Apple Retail experience, he wanted to move technology retail from a selling concept to a value creation mindset.  In short, he wanted his staff to focus on making people’s lives better rather than just selling them things – recommending things that added value to their lives rather just than just filling their lives with clutter.

So he made sales staff non-commissioned and focused them on the customer needs, even if that meant recommending a product that Apple didn’t carry.

For premium and luxury brands looking to use retail spaces to build strong and long lasting relationships with consumers, this would seem like a sensible mantra to follow.  Too much selling takes the control away from the consumer and compromises the retail experience – driving them back to an experience where they’re more in control – online.

4. Give People Reasons to Come Back

Retail space is expensive to create and maintain, so it makes sense that brands should leverage that retail space as much as they can by encouraging shoppers to come back.

Apple has its ‘Genius Bar’ – encouraging customers to come back in for training and fixes when they’re having problems with their Apple products. Some fashion brands are expanding beyond the ‘two season” mentality – frequently updating ranges to give shoppers a reason to come back more often.  Burberry’s store has a built in stage and sound system to host concerts and other cultural events to bring customers into its Regent Street store.

The more face-to-face interaction a consumer has with a brand, the more that relationship will deepen. The more often they walk into a store, the more often they’ll buy.

5. Places for Co-Creation and Personalization

If a premium retail store is just offering an experience where people select off the shelf and buy, then the full potential of the environment is not being realized. Sophisticated shoppers are expecting ever more personalization, a need that the web struggles to fulfil.

Take a fashion environment.  Retail staff should be able to help shoppers select clothes that suit their colouring and body shape, and help them to create outfits which make them feel good about themselves.

Technology is helping this process to – with many stores, including M&S, employing virtual mirrors which allow shoppers to not only try on lots of different outfits virtually, but to accessorize those outfits with different make up looks and jewellery.  

6. Bringing Together the Best of Offline and Online

You’ve immersed the customer in the brand, and your highly trained staff have made personalized recommendations that are best for them. But how do you make sure you secure the transaction? By bringing the best of the online world to the offline world.

Stores can’t showcase a full product range, so give customers the opportunity to browse other styles and colours and order other sizes while they’re in store.  Don’t make customers queue at a till – they don’t have to queue online – do as Burberry do and give them an iPad to enter their payment details into while they relax on a sofa. Bring the convenience and choice of online to the offline environment – ‘blending’ the 2 channels together.

So is retail really doomed?  For premium products, where the equity of the brand is so key, and the price points encourage trial, we think not.  However, those that will thrive will be those who leverage retail to truly showcase their products and their brands not those who see if purely as a method of distribution.