• by Jack Loechner , Staff Writer @mp_research, May 12, 2017

According to Zenith, presented by the Marketing Charts staff in its latest forecast, after contracting by a marginal 0.5% last year, luxury ad spending across 23 key markets is set for growth this year and next. The US, China and Japan will provide 80% of the coming growth, predicted to be 2.9% this year and a further 3.9% next.

While those 3 markets will drive the majority of ad spending increases, the fastest-growing advertising regions will be Eastern Europe (10% per year,) and Latin America (5% per year,) according to the forecast. Political volatility and depressed oil prices will, by contrast, lead to a 6% average drop per year in luxury ad spend in the Middle East and North Africa, says the report.

Print is the largest advertising channel for luxury ad spending worldwide, accounting for almost 32.7% of spending last year, slightly ahead of TV (31.3%) and with the internet trailing, but still influential (25.8%).

Fast forward a couple of years, says the report, and with internet advertising’s torrid pace of growth, (which will account for 87% of luxury ad spending growth), will become the biggest medium. Zenith forecasts 30.6% of luxury ad spending in 2018 to be spent on internet advertising, edging TV (29.9%) and print (29.7%), says the report.

Print will remain far more influential in luxury ad spending than in the broader market, where it will command only 13.8% of ad spending in 2018, says the report. As MarketingCharts’ own primary research into advertising media has found, both magazine and newspaper advertising have a strong impact on consumer purchase behavior, relative to their reach.

There’s an important footnote to the channel allocation data, says the report. High luxury, such as watches & jewelry and fashion & accessories, remains very much dominated by print. In fact, almost three-quarters of high luxury ad spending went to print media last year, and that should not change too much by 2018 (70%), says the report.

Ads for well-regarded brands such as Rolex, the most reputable company in the world this year says the report, are most often found in print. However, high luxury only accounts for about 24% of luxury ad spending. Most ad spend, instead, goes to broad luxury, such as luxury automobiles and cosmetics & perfume.

In fact, broad luxury ad spending is set for much larger increases than high luxury: 3.7% this year and 4.6% next, compared to 0.8% and 1.6%, respectively. It’s here that the internet makes its mark as a growing force within a growing market, concludes the report.

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