It was conducted last year by Ipsos Mendolsohn in association with the Interactive Advertising Bureau and concerned the use of and attitudes towards digital media by affluent consumers. In this case, ‘affluents’ were defined as those with household incomes over $100,000 (the top 20% of earners).  And although the study was conducted exclusively in the US, we believe thay many parallels would be found amongst UK affluents.

The findings concurred with our own experience but conflicted with many of the myths that circulate about affluent consumers, namely: 

1. Affluent Consumers are More Difficult to Reach than their Less Affluent Counterparts

 This is certainly true of traditional media channels such as TV and radio – in both cases the research found that affluents spent just half of the time consuming TV and radio content than the general US population did – but not of digital media, where it was found that affluent consumers were easier to reach. 

The reasons? They’re more likely to use the internet (98% vs. 79% of the general US population), spend more time online (26.2 hrs per week vs 21.7 hrs per week) and are more likely to own digital devices such as smartphones and tablets when compared to the general population. 

In fact, 79% of them agreed that their lives had become ‘intertwined with technology’.

 2. Affluents Don’t Like Online Advertising 

In fact, affluents were more likely to understand and support (57% vs. 53%) the ad-funded content model than the rest of the US population, realising that publishers needed advertising to support their online activities. 

3. They’re Too Busy to Consume Advertising 

Not true, at least according to this research.  88% had recalled seeing a digital ad compared to 85% of the general US population. And the number of ads they recalled seeing was higher too – 21 in 7 days vs. 20 for the general population. And because of the higher penetration of smartphones, they were more likely to have been exposed to mobile advertising (42% vs. 39% for the general population). 

4. They May See Online Advertising, But They’re Not as Likely to Respond to It 

Wrong again.  Affluents were more likely to become a fan on a social networking site after seeing online advertising, more likely to make purchases (both online and offline) and more likely to share information via email, Twitter or Facebook etc. 

5. Affluents are Less Likely to Share Information About Themselves Online

In fact, the research found US affluents were happier to share information about themselves (32% vs 26% of the general US population) in order to get a better customized online experience. 

In the UK too, affluent consumers are more likely to be online, will spend more of their time online and will access the internet via a wider range of digital devices than their less affluent counterparts. Given this, the reticence of premium and luxury brands to engage deeply in digital channels becomes all the more puzzling. 

In truth, they should be innovating at the sharp end of digital media and many of the successful brands, such as Burberry, are doing exactly that.

‘While digital continues to dominate, many of Europe’s niche fashion brands remain absent online.’

That’s the rather damning verdict of Professor Scott Galloway and his team at L2, a thinktank for digital innovation based at NYU Stern, after they turned their Digital IQ lens on to the world of niche fashion in Europe.

Digital IQ is a weighted scoring system to assess the digital competence of luxury brands. Brands are rated in 4 categories – their site (40% of the final IQ rating), their digital marketing (search, display and email marketing, 30% of the rating) and their social media (15%) and mobile marketing efforts (15%).

Brands are then ranked into 5 categories based on their IQ score – from Genius (140+) and Gifted (110-139) to Challenged (70-89) and Feeble (<70).

The reason for Galloway’s damning verdict on the sector?  Well, no brand was able to claim ‘Genius’ status and only 10 of the 46 analysed were rated as ‘Gifted’. By contrast, 32 were rated as either ‘Challenged’ or ‘Feeble’.

Most niche fashion brands were found to underperform on a range of metrics:

- 1/3 were still not selling online.

- less than 1/2 were participating in paid search, with only 43% purchasing their own brand terms on Google.

- their adoption of the 3 big social media platforms lagged well behind the global fashion players and even those that had adopted them often had rudimentary presences. For example, only 23% of the Facebook pages had a custom landing page.

- only 1/3 offered any sort of mobile experience, with 18% of brands in the sample having a mobile site and 17% offering an application. Even for those that did have mobile sites, less than 30% offered a m-commerce option or a store locator.

But it wasn’t all doom and gloom.

Both Vivienne Westwood and Superdry were praised for their Facebook presences – with Superdry in particular held up as a shining example of what can be achieved with regionally focused pages. In addition, both Aubade and Lancel were praised for achieving both significant followings and high levels of engagement on Facebook.

Stella McCartney were commended for their successful twitter persona with close to 200,000 followers (as at October 2011 – well ahead of their nearest rival JP Gaultier at 18,000) and for their interactive iPad app.

And the crown for most gifted niche fashion brand was scooped by Agent Provocateur, which won praise for the quality of their site experience, particularly their personalisation options, their social media integration across channels and the quality and popularity of their YouTube channel. In addition, Agent Provocateur was one of only 2 brands in the sample to offer both a mobile site and an application.

Galloway’s contention is that Digital IQ directly relates to shareholder value, and hence luxury brands that fail to embrace it are doing their shareholders a disservice. Given that the consumers of luxury are more likely to consume digital media, and are more likely to consume that media via a range of channels including mobile, he’s got a point.

Digital innovation is one area where the niche brands can genuinely compete with the global fashion players, unlike traditional media where the winner will always be the brand with the deepest pockets. And examples from the US such as Kate Spade, Tory Burch and Oscar de la Renta show that it can be done. European niche fashion brands need to grasp the digital ‘nettle’ if they’re going to thrive in the competitive world of 21st century fashion.

To download the Digital IQ Index for European Niche Fashion, click here.

It happens pretty regularly these days – a new social service is trumpeted across the marketing media as the next big thing.  Most fizzle, or remain mired in only a small niche of users.  But every now and again, one comes along that has real potential, and Pinterest falls into that category. 

So what is it exactly? 

In marketing speak, it’s a visual curation tool. In plain English, it’s a service which allows its users to create virtual mood or pinboards and share them with others. 

The first hurdle to overcome for interested users is that it’s an invitation only service at present. Once users have been invited by an existing user and are signed up, they can share photos that they find online (or create themselves) by ‘pinning’ them (much like a ‘Like’ on Facebook or a +1 on Google.) As long as they’ve downloaded the toolbar, users can ‘pin’ images and videos from any website and the picture will appear on their Pinterest board. Once ‘pinned’, items can be used to create a number of themed ‘boards’, and followers of that user can ‘re-pin’ items to their own boards. Users can also share their boards on other social networks such as Twitter and Facebook. 

How is it used?  Well, at present in any function where a mood board is a useful tool – so by designers collecting and demonstrating ideas for schemes, by fashionistas creating looks, by families sharing tips like recipes and useful products, by brides-to-be collecting ideas for their weddings etc. 

And why is it attracting so much attention?  Well for 2 reasons. 

Firstly, between September and December last year, Pinterest grew from 1.68m unique users to 7.21m – an increase of 369%.  Other reports suggest that up to 5m people are logging in per day and spending an average of 14 mins on the site. Whatever the exact figures, everyone agrees it’s growing rapidly. 

The other aspect of Pinterest that’s really capturing the attention of brands is the amount of referral traffic Pinterest is generating.  Figures from the Shareaholic survey for January ‘12 found Pinterest just behind Twitter in referrals, having driven 3.6% of referral traffic in the month compared to Twitter’s 3.61%. That puts Pinterest ahead of services with significantly bigger followings like Google+ and LinkedIn, hence making it a platform with potential to create real user engagement and drive real business. 

Opportunities abound for brands on this platform, as long as they think creatively and don’t use it merely as another mini website.  Fashion and beauty brands might create boards to demonstrate different looks, or might use the platform to showcase the looks that their customers have created. Or boards might be created around different customer groups or occasions – party frocks, summer wedding etc. Pinterest also allows users to add prices and link back to ecommerce sites. 

Pinterest also has potential for competitions – such as Lands Ends’ ‘Pin It to Win It’ – and for crowdsourcing, like asking followers to create boards of their favourite clothes, or to photograph themselves in their favourite outfits and pin them. 

But any brand that is interested in participating needs to understand the demographics of Pinterest users initially.

At present, it’s heavily female dominated (80/20), with a bias towards lower incomes (most are in the $25-$75K category) and families – so fashion, jewellery and beauty brands with accessible offerings will see the potential. We’ve seen no figures yet on the UK following and it would be fair to say Pinterest is primarily a US phenomena – although trends have a habit of spreading rapidly across the Atlantic.  And even the top brands on the platform only number a few thousand followers, albeit numbers are growing fast and those followers seem to be highly engaged as the referral traffic demonstrates. 

So Pinterest is not for every premium and luxury brand, and some of the oportunities that Pinterest allows brands – such as to create themed pages – could be easily transplanted to brands’ ecommerce sites where they will probably have greater impact. 

But it’s certainly one to keep a close eye on and – if the demographic appeals and you can secure an invitation – to have a dabble with.  For brands with highly visual products and with creativity at their core, it could be a highly effective platform for promotion.

Consultants Logan Tod & Co.’s 6th Annual Online Future Shopping Index found that tablets had come from nowhere in the past 12 months to rival smartphones for online purchasing.

Their survey, conducted at the end of last month, found that 14% of their respondents had used an iPad or other tablet device to make a purchase for Christmas 2011, compared with 15% who had used a smartphone – this despite much lower penetration of tablet devices. Their prediction was that 2012 would see online sales from tablets at least equal those of smartphones.

However, tablet users aren’t just more likely to use their device for online shopping, they spend more when they do too.

Recent analysis by Adobe of 16.2 billion visits to 150 online retailers found that tablet user spent an average of $123, 54% more than smartphone shoppers ($80 average) and 21% higher than PC users ($102). Conversion of tablets users to puchase was found to be almost 3 times higher than smartphone users (2.3% vs. 0.8%), in part explaining the increased usage found by Logan Tod despite the much lower penetration.

As smartphones become  more affordable and their adoption approaches ‘mass’ levels (penetration in the UK is nearing 60%), their ownership becomes less a sign of affluence. However, tablet owners, because of the luxury nature of the device in terms of price and utility, are more likely to be earning above the average and may represent a better focus for the efforts of premium and luxury marketers.

The problem for those who have already constructed their mobile site with smartphone owners in mind is that tablet owners appear to approach the shopping experience in a more relaxed mode than those shopping on smartphones.  Hence, the limited text and smaller images and graphics which appeal to smartphone owners grappling with small screens and overloaded 3G networks are not going to appeal to tablet users whose devices have the ability to showcase high quality images and are likely to be hooked up to the wifi at home.

As with all mobile conundrums, the best starting place for a solution for your brand is your own site metrics and an understanding of how many mobile users are visiting your site, what devices they’re using and what they’re trying to do.  But these surveys would suggest that your optimum e-commerce strategy may need 3 strands (PC, smartphone and tablet) rather than 2.

With the new apps, offered by the likes of travel review site TripAdvisor, the recipe network Foodily and film review site Rotten Tomatoes - people will be able to personalise their timelines dependent on their interests.  And once the user has loaded the app and decided what they’re going to share with who, their timelines will automatically be updated with their activity in that app in real time.

The potential rewards for brands are obvious. As apps are used, they create a constant stream of viral marketing messages that appear in friends newsfeeds and tickers.  Spotify’s music app is a prime example – one of Facebook’s original timeline partners, the music streaming site has netted an estimated 7m new subscribers since its launch. And Facebook announced with the release of these new apps that the door is now open for any brand to develop and submit their own app.

Even if brands don’t create their own apps, there may well be benefits to using existing apps for marketing purposes if they have an established Facebook audience.  Private galleries might share, or encourage visitors to share, their collections on art sharing app Artfinder,  food brands might create and share their own recipes on Foodily etc.

In addition to this development, Facebook has also announced the rollout of a new form of advertising – Featured Stories.  Featured Stories will work in the same way as Sponsored Stories – the ads will only appear to those people who’s Facebook friends have interacted with the advertiser.  But Featured Stories will appear, clearly flagged, in the friends’ newsfeeds rather than in one of the advertisng slots on the right hand side of the screen.

Featured Stories will be carefully rationed, at least at first, to one per newsfeed per day but it will be interesting to see what impact they have on click thru rates.  Featured Stories also open up the possibility of advertising to Facebook’s growing market of mobile users, although mobile users won’t be included in the initial roll out.

Firstly, the integration of personalized search results with public search results was announced with the introduction of Google’s ‘Search Plus Your World.’ Then, last week, Google CEO Larry Page announced that Google+, launched just 7 months ago, had already reached 90m users.

So are Google, Twitter et al on the wane and should marketer’s be switching their focus to Google+?  There are plenty of reasons to justify such a view. But first, let’s look at how Google has integrated personalized results from Google+ into its search results.

With the roll out of  ’Search Plus Your World’, users who are logged into Google will not only see the ‘public’ search results from people they don’t know, but relevant content – posts, videos and photos – that has been made public or shared with them by their Google+ connections.  Those results will be clearly flagged as personal and can be switched off at any time using a simple toggle.

In addition, for those signed in, Google+ profiles will be part of the search query box. So those looking for people will find their search box populated with people with the same/similar names from their Google+ network or similar people who they might be interested in following.

Finally, when conducting searches, signed in Google users will find Google+ people profiles and pages related to that particular search delivered alongside their search results. These results may appear irrespective of whether the searcher is signed into Google, although if they are,  those profiles can be added to their Google+ network directly from the search results page without needing to switch to Google+ first.

 These 3 changes make a social network a 10th the size of Facebook leap in importance, and here’s why.

The benefits of creating a Google+ page, growing its following and creating search optimised content that others share  suddenly becomes more important for brands because of the integration with that great business driver for premium and luxury brands – search.

The more Google+ followers a brand has, the more likely that brand’s content is going to be shared and the more likely that content will appear in the personalised searches of those followers and their connections, driving more traffic to the brand’s site. And the more content that brand creates on its area of specialism and shares with its followers, the more likely it  makes it that the brand’s Google+ profile will appear in the recommended people and pages profiles within a Google search – increasing its Google+ following and its potential network of sharers and their connections.

An active and popular Google+ presence has the potential to become a key plank of search strategy. And as search is a more proven business driver for premium and luxury brands than social media, there is potentially a more direct link between social media activity and commercial returns than has been proven to date on Facebook or Twitter.

So should brands be prioritising Google+ at the expense of their Facebook and Twitter profiles?  Not yet, and that’s for 2 key reasons.

Firstly, marketers need to be where their consumers are and at present their consumers are much more likely to be on Facebook and (to a much lesser extent) on Twitter. The success of these new ideas depends very much on how consumers react to personalized search and whether enough are attracted by the benefits to create Google+ accounts and use them as their primary profile for connecting and sharing.  Google+ is growing fast but a proportion of its 90m users will have signed up because they’re using other Google services such as gmail rather than because their aiming to use it as their primary social network.

Secondly, this may be part of a game Google is playing with Facebook to increase its access to Facebook social graph data to enhance it’s own search results. Or indeed Google may be forced to integrate more of Facebook’s and Twitter’s social graph results into its search by antitrust legislators concerned at the extent to which Google is promoting its own product.  If Facebook is happy to supply more of its data to Google to fuel social search results, and Google is happy to integrate that data, then the reasoning for a Google + presence becomes less strong.

Our advice wouldn’t be to ‘wait and see’, however.  As we’ve advised in the past, we think brands should be setting up Google+ brand pages and beginning to post content optimised for search, even if re-purposed from existing Facebook and or Twitter posts. They should also integrate Google sharing buttons on their sites if they haven’t already.

Then, they need to watch their follower stats and natural search traffic carefully and use that as a guide to how Google+ is impacting their business. If Google+ does take off as a result of these new developments, it’s going to pay off most handsomely for those brands that aren’t playing catch up.

But before we discuss their recommendations, it’s worth introducing you to 2 specific measurement concepts which MediaMind has pioneeered. 

The first is dwell rate, which describes the proportion of impressions that have engaged with a rich media ad – be that by touch, interaction or click.  The second is dwell time, that being defined as the duration of the dwell, in seconds, for users who engaged.

MediaMind has found dwell rate and dwell time to be more indicative of the impact of an ad than the traditional metric of CTR as much of the user activity in reaction to an online ad occurs ‘post impression’.  MediaMind’s own studies have found that users who were exposed to campaigns with high dwell were 3 times more likely to search for a brand related keyword as compared to those who were exposed to campaigns with low dwell.

In addition, campaigns with high dwells boosted advertisers’ site traffic by 69% on average and improved page views and time spent on the site.

So armed with dwell rate and dwell time as our primary measures of ad impact, let’s look at MediaMind’s 7 recommendations:

1. Use Video

Using video ad formats increases dwell rate by 22% because the movement of the video attracts the user’s eye away from the largely ’static’ content of the publisher’s page.  And because video allows the user to stay with the ad for longer, video ads also enjoy an 11% higher dwell time.

2. Initiate Your Video Automatically

If the movement of a video ad draws the eye, then it makes sense for this movement to begin automatically when the user hits the page rather than being user-initiated.  Auto initiated ads enjoy higher dwell rates and CTRs than their user-initiated counterparts.

3. Match the Ad with Site Creative

Contextual relevance is key – MediaMind’s study found that ads surrounded by relevant content saw sharp increases in performance. Not only is content a powerful indicator of intent, people are more likely to spend more time consuming specialist content, and are therefore more likely to notice and engage with ads.

4. Use Richer, More Visible Ad Formats

As a rule of thumb,MediaMind found that the richer the format, the higher the level of engagement (although this isn’t always the case – at Cream we’ve sometimes found that static campaigns can outperform flash campaigns).

Homepage takeovers, expandable banners, peelback banners and video extensions were found to increase the average dwell duration. Commercial breaks, floating ads and overlays commanded high attention from users and therefore resulted in higher dwell rates (albeit combined with lower dwell durations).

5. Use Synched Ads

Synching ads involves taking 2 different placements and creating one unified experience, and it’s an experience which creates impact without being too intrusive like some other rich media formats.  Both dwell rate and CTR were observed to increase, even when compared to running 2 different regular ads on the same page.

6. Take Advantage of Dynamic Creative Optimisation

This process involves the ad server combining different creative concepts with different copy treatments and serving the ad that delivers the greatest level of interaction from users – be that clicks, conversions, dwells or a combination of those actions.

Effectively, clients don’t have to make a call on which creative they believe will be the most effective as the ad server discovers that via trial and error and then focuses on the most effective execution.

Unsurprisingly, dyamically created campaigns saw a 6% increase in dwell rate and a 10% increase in dwell time.

7. Integrate Exchanges into your Media Buy

Incorporating ad exchanges into campaigns was found to boost return on investment and lower cost per conversion.

To help marketers digest these 7 practices, MediaMind have produced an infographic which we’ve included below.

The full report, which includes benchmarks for ad performance by region and country, can be downloaded here.

We’ll let you digest them for yourself but we thought we’d pick out some of the highlights for you:

Facebook

 - B2C Facebook results are 30% above average on Sundays – but most brands only post Monday to Friday.

 - 77% of Facebook users said they interact with brands primarily through reading posts and updates, 17% by sharing experiences and news stories with others and 13% post updates about brands they like – a good benchmark for your own Facebook engagement levels.

 - 95% of Facebook wall posts are not answered by brands – brands aren’t leveraging one of the key assets of Facebook, the ability to have conversations with their customers.

 - 56% of consumers said they are more likely to recommend a brand to a friend after becoming a fan on Facebook – a commercial justification for brands to be participating in social media.

 - The 2 primary reasons brands are ‘liked’ are because the user is a customer (58%) or because they want to receive discounts and promotions (57%).

Twitter

 - 34%  of marketers have generated leads using Twitter and 20% have closed deals using Twitter – although it would be interesting to see sector specific figures.

 - Twitter updates that include verbs have a 2% higher shareability than the average tweet.

 - 40% of Twitter users don’t tweet, they just ‘listen’ – so many of those followers who look ‘inactive’ are probably ‘active’ after all.

Other

 - More people globally own mobile phones than toothbrushes!

EpiServer’s research of over 1,000 UK consumers found that 59% owned a smartphone and 18% owned a tablet device (NB This seems high – Ofcom reported 2% penetation at end Q1 2011). 73% of the sample had accessed a mobile website and 33% had made a purchase using a mobile site.  2/3s had used a mobile app and just over 1/4 had used an app to make a purchase.

In contrast, in a parallel survey of marketers commissioned by EpiServer, only 20% reported their company had a mobile optimised website in place and only 18% had an app, with 26% expecting to launch a mobile site in 2012 and 10% to launch a new mobile app.

The problem for marketers is that customers are demanding high standards in these new channels – 64% would give a mobile website an average of 3 chances before moving on. Common problems reported were site speed, navigation problems,  difficulties logging in and missing functionality.

The picture is further complicated for marketers given the increasing influence of the tablet computer in mobile commerce.

Research for Logan, Tod and Co found that tablets were almost as used as smartphones when it came to online purchases this Christmas.  14% of their sample had purchased using a tablet computer vs. 15% who had purchased using their smartphone (up from 7% in 2010) with tablet purchases expected to at least equal those undertaken on smartphones in 2o12.

And tablet owners browse in a more ‘laid back’ way then their task-oriented smartphone counterparts – rasing the spectre that marketers would be best advised to create not one mobile experience, but two.

So how should marketers, facing the ‘perfect storm’ of ever diversifying channels and shrinking or static budgets, react?

Firstly, they should try not to be galvanised into inappropriate reaction by headline stats. 

The top line stats presented by EpiServer certainly show that mobile browsing is growing at a rapid pace but there’s little information on the scope of that browsing – for example, a high proportion of it will be people accessing their social networking profiles on Facebook or Twitter.

And impressive as the mobile commerce figures are, most of those purchases will be low value.  People may be willing to purchase commodity items such as tickets and groceries on their mobiles, but whether they’re ready to buy premium fashion or holidays on them in significant volumes just yet is another question.

Marketers need to go back to their own web metrics to understand precisely how consumers on mobiles are using their sites and which devices they’re using. Only then can they ensure they invest in a solution which is going to deliver the most satisfaction for their customers and the best return for their marketing investment.

EpiServer summarised their key findings in an Infographic (see below).

It’s the perennial online advertising conundrum for premium and luxury marketers – hand-pick the environment for your brand’s advertising or opt for an RoI driven, but blind, approach. 

Both arguments have their merits but as demands on marketers grow to deliver demonstrable results, the lure of performance-driven advertising becomes ever more irrisistable. 

So 2 pieces of research from AOL and the AOP released last week make for interesting reading. 

AOL’s study, which quizzed 1,200 consumers and was conducted in association with GfK NOP Media, found that environment was key in delivering the best engagement levels. Almost 1/3 (29%) of their respondents  said they would feel more positive about a brand if it was advertised on a site they trusted.  And once users felt they could trust a site, they were more likely to respond to advertising and buy the products advertised. 

AOL’s research found 4 factors crucial in building trust amongst users – good quality information, emotional attachment, prominent user involvement and modernity. Websites that ticked these 4 boxes were more likely to be visited regularly, to enjoy higher levels of participation and sharing and to be more fertile environments for advertisers.

The study by the AOP,  with a sample of 2,000 users and conducted in association with ComScore, shed greater light on which sites were more likely to be trusted and which weren’t. 

Their research found that 62% of users were more likely to trust advertising on original content sites – classified by them as the sites of UK newspapers, UK commercial TV and radio, UK magazines and trade or business publications. 52% were found to ‘trust’ advertising on portals (e.g. MSN, Yahoo) and just 32% trusted advertising on social networks. 

In addition, 41% of the respondents said advertising on original content sites was more relevant to them and of high quality, compared with just 19% on portals and 18% on social networks. Where trust in an online environment could be demonstrated, site visits to the advertiser’s brand site was increased by 37% on original content sites. 

Of course, advertising performance is not just based on trust in the environment – AOL’s study also underlined the importance of relevancy to site content and quality of the advertising itself – but trust clearly plays a key part, and probably more so for premium-priced products. 

The problem with taking a purely RoI based approach to online advertising is that decisions can be taken based on only part of the picture.  As we’ve discussed before, a great part of the relevance of online ads is the impact they have post impression on brand preference and favourability – factors which can result in ‘post impression’ visits to the advertiser’s website and factors which will be overlooked by taking a pure CTR or CPC based approach.

Of course, part of the RoI calculation is based on investment, and costs are higher in known online environments then when bought blind, but these 2 studies would suggest that brands should be hand-picking their online environments based on their authority and relevance, just as they do in the offline world.