LONDON — While financial services and telecommunications companies have been quick to adopt programmatic media — which targets digital ads to consumers in real time, based on their online activity — luxury e–commerce firms have been “relatively behind the curve.”
That’s according to Paul Rostkowski, president of Varick Media Management, which specializes in programmatic media. “The luxury brands are beginning to come into this space now, but there’s a lot of room for them to continue to improve and use new technologies,” he said.
Rather than being targeted in a blanket fashion, consumers now “want to be reached on their terms,” he said. “We’ve moved away from monologue advertising. Today, it’s a two-way dialogue that goes on…you have to speak to [the consumer] in the content forms they want to be spoken to, and on the types of devices they want to be spoken to on.”
The device that’s key, according to Rostkowski, is mobile. “In North America, in the holiday season of 2014, half of all e-commerce browsing activity occurred on mobile devices and one-third of all purchasing activity occurred on a mobile device,” he said. “It’s just exploding from there — by 2020, about 80 percent of the world will have a smartphone.”
According to a study conducted by Rostkowski’s firm, Apple devices make up the lion’s share of purchasing via mobile channels. “Apple devices generally [belong to] higher-income individuals,” Rostkowksi said. Blackberry devices also made up a proportion of sales, which Rostkowski said represent users in “finance, law and government.” He noted the lack of Android activity in the study, which the firm conducted in the U.S. and Europe. In Asia, Rostkowski noted, Android devices would account for a higher proportion of online purchasing.
Social media is also a powerful tool, especially for luxury brands, with Rostkowski arguing that the channel has “democratized” the way that consumers interact with luxury brands.
“In Manhattan, if you walk down Fifth Avenue…that’s the height of luxury retail in Manhattan,” he said. “Every one of those stores has a very large man standing outside in a very black suit…some people might not feel comfortable going in there. But social media gives people the ability to speak to these brands on a one on one basis,” he said. “It gives luxury the ability to expand their consumer set.”
Rostkowski noted that middle-income customers are “four times” more likely to engage with a brand on social media than those of higher incomes.
For those firms looking to capture the attention of consumers with programmatic media, timing is key, said Rostkowski. “Users today are very characteristic of popping from Web site to Web site — they’ll start an engagement on that retail site and drop out of it just as quickly,” he said. Programmatic media, he said, can allow companies to target consumers online quickly to drive them back to a purchase. “You’ve got to understand when…they’ve been to your Web site, and how soon are they going to come back to repurchase,” he said. “If you’re selling an air ticket, it’s really critical that you reach them in a certain period of time.”
“Recency is one of the most important factors when you’re targeting consumers online,” he concluded.