This is an article from CMO.com about social media and the affluent market (http://www.cmo.com/targeting/upmarket-brands-need-get-down-marketing-affluents).
Date: July 21, 2011
Author: Mark Dolliver, Contributing Writer, CMO.com
It’s tricky enough for marketers to reach consumers of any sort when a bad economy and a technological revolution happen at the same time, as is the case now. But it’s that much trickier for upscale brands to connect with affluent consumers, given the arcane folkways and media habits of the highly varied people inhabiting that category. In the age of Facebook, how are the affluent using new media, and how should upmarket brands target this audience in those venues? Some recent studies offer guidance as brands seek answers to such questions.
Despite a habit of sequestering themselves in gated communities, the affluent have not been shy about joining the social-networking crowd. In a small-scale poll last fall by SEI Wealth Network among individuals with investible assets of more than $5 million, 70 percent said they use social-media sites, including 17 percent who do so daily.
A broader survey this year by the American Affluence Research Center (AARC), conducted among the wealthiest 10 percent of U.S. households, also found widespread usage of social media. Half of those surveyed for the report participate in one or more forms of social media, including 40 percent who are on Facebook and 29 percent on LinkedIn.
As you’d expect, younger affluents are especially likely to be engaged with social media: Among the AARC’s survey respondents, 57 percent of those under 50 are on Facebook, as are 23 percent of those 60 and older. And affluent women are more apt than their male counterparts to be Facebookers (49 percent vs. 33 percent). Perhaps reflecting the age skew of the very wealthy, respondents with a net worth of $6 million-plus are less likely to be on Facebook than those in the $1.5 million to 5.99 million category (24 percent vs. 37 percent). And both of these cohorts are less likely to be on Facebook than those with a net worth of $800,000 to 1.49 million (47 percent).
The affluent also have plenty of gadgets, in addition to computers, with which to access social media. Thirty percent have an iPhone, 28 percent have a BlackBerry, and 13 percent have some other kind of smartphone. Twenty-two percent have an iPad or another tablet. Affluent owners of tablets have an above-average propensity for engaging with social media, and 57 percent of such respondents reported using Facebook.
When the affluent do get involved with social media, some of this socializing involves brands: Among AARC respondents who use social media, 26 percent said they “receive regular communications from a manufacturer or retailer to which they subscribe to receive product and related information,†says the report, with Facebook accounting for about two-thirds of these people.
Of course, this leaves a majority of the survey’s affluent consumers declining to engage with brands in this way. “It appears that large numbers of the affluent have not found compelling reasons for opting in to receive regular communications from retailers or brands,†Ron Kurtz, president of the AARC, told CMO.com. “That is the challenge that retailers and brands must overcome if they are to develop a good following through social media among the affluent.â€
Curb Your Enthusiasm
There’s also the danger that upscale brands might be more enthused than their target audiences are about communicating via social media–or, at least, more indiscriminate. According to Kurtz, “The brands’ social-media management and their social-media agencies are at risk of communicating too often and sending information of limited interest to their audience, which is not totally homogeneous and has diverse interests and reasons for linking to the brand via social media.â€
Even when a brand has accumulated a zillion Facebook fans, this doesn’t necessarily mean it is capitalizing shrewdly on the marketing potential of social media. That’s the key insight in a report issued last month by L2, a think tank that focuses on digital marketing. Titled “Prestige 100: Facebook IQ,†the report looked at how well 100 prominent luxury brands are doing at employing Facebook to connect with their target audiences.
“Although many prestige brands maintain a monocular focus on the size of their Facebook community, they have failed to embrace the authentic two-way communication and marketing activation required to monetize the platform,†stated the report, which was created in tandem with Buddy Media. Thus, while BMW, Clinique, and Johnnie Walker were among the upscale brands rated “genius†for their use of Facebook as a two-way medium, famous brands like Rolls-Royce, Givenchy and Rolex landed in the report’s “feeble†category.
Do the not-so-genius brands simply fail to grasp the nature of social media and their proper role in it? “Luxury brands today understand the importance of creating social communities and are making visible investments in their Facebook pages, and many are doing a great job at finding that balance between growth and engagement,†said Daniella Caplan, an associate at L2 and lead researcher on the Facebook IQ report, in an interview with CMO.com. “What we are seeing in many cases, though, is not a reluctance to engage, but rather a hesitancy to open up the discussion to a wider audience. These brands post content that they, themselves, find engaging without truly engaging with their fans. This strategy typically turns social-media properties into additional, albeit sizeable, broadcast-media channels rather than genuine social-media communities.â€
Even among prestige brands that are good about at responding to fan posts, just four–L’Occitane, Kiehl’s, Korbel and Vacheron Constantin–responded to as many as 50 percent of them during the period of the study.