In my last blog post, I talked about how the marketing and media environment is blossoming with ways to reach out to top five percent of affluent consumers and business leaders. Since I last wrote, the tides have turned a bit.
I recently learned that Halogen Media Group, an online media partner, has broadened their business model from an online luxury advertising network to a prestige online communication network. Halogen’s newly launched website states, “Our mission is to help prestige brands leverage…their audiences to create brand consideration and preference.” Sounds like a subtle nuance but in fact it’s a huge paradigm shift for Halogen.
Many luxury brands have recognized that one way to increase business significantly is to create products that embrace consumers at a more accessible price point. Halogen”s VP of Sales, Lance Goler, said that, “Apple, W Hotels and Coach are perfect examples of prestige brands.” What these brands have in common is that unlike traditional luxury brands, they command a desirable price point and are created for the masses rather than exclusively for the most affluent of consumers. Halogen’s future target seems to include the 10 percent market with household incomes in excess of $150K.
Interestingly, when considering higher rate earners, the percentages drop substantially. Recent reports have indicated that only two percent of the population earns in excess of $250K and only 0.9 percent earns over $350K. Furthermore, only 6.9 percent of the population has assets over $1 million, while only 0.9 percent (or 980,000 Americans) have assets valued in excess of $5 million. Indeed, the luxury market is a very small slice of America.
So, what does a luxury marketing professional take away from this?
Halogen’s realization that this luxury audience wasn’t online in significant enough numbers to warrant a business model exclusively dedicated to serve it was an important admission. Though there are a strong media outlets and marketing partners that effectively target ultra high net worth individuals, these audiences and lists are small, ranging from 500 to as large as 100,000. No one source has the list of all 980,000 Americans with assets in excess of $5 million.
As stated in my earlier post, the media environment is fractured. It is a mistake to presume that brand awareness among the ultra affluent can be achieved with limited engagement in media or venues. While luxury targeted communication venues have real merit and should be utilized, they are designed, for the most part, to only reach a small high net worth audience during leisure time. Equally valuable to recognize is that the majority of high net worth individuals are over the age of 40 and still turn to powerful established media like The Wall Street Journal, The New York Times and Robb Report (whether print or online). With large loyal audiences and strategic, consistent ad placement, luxury brands are going to be well served, over time.