The Ultimate Guide to Audience Targeting for Luxury & Lifestyle Brands
Updated: Jul 15, 2021
Have you ever considered that digital marketing’s incompatibility for luxury, lifestyle or niche brands can be a complete misconception?
There is a common misconception that digital marketing is not as compatible and effective for luxury, lifestyle or niche brands compared to massy brands.
I often hear claims that HNIs don’t browse the internet or are too busy making money to have time for the internet, but this could not be further from the truth!
In fact, a study conducted by PwC found that 98% of HNIs access the internet daily and that the world’s wealthiest now expect online and digital functionality in many aspects of their lives.
I actually bought this entire narrative for the first few years of my career till I started seeing exemplary results for brands such as Jaguar, WowTables, and Harman Kardon, amongst others.
Digital advertising actually provided better value for money than traditional marketing methods for these brands, given that ROI was a lot easier to measure. Attribution allows us to track the entire customer journey from a person seeing the ad to actually clicking on it and then making a purchase. Every rupee spent could be measured and metrics such as Cost per Lead, Cost per Acquisition and Cost per Sale could be easily identified. The same can’t be said for a print ad in a lifestyle magazine or a banner ad at the airport, can it?
So, why are things different for premium brands? Well, for starters, the TG is far more narrow compared to a product or service for the masses. This makes it far more challenging to find potential consumers.
To put things into perspective, the luxury retail space in India accounts for less than 2% of the overall retail space so it is still pretty much a very narrow pool of people who would subscribe to the idea of purchasing such products. Having said that, this post highlights how to target people not only for luxury brands that only the top 1% can afford, but even premium brands that can be accessed by the top 5% of the country.
A premium brand such as a Nappa Dori will have a completely different audience compared to Lavie. Similarly, Good Earth will have a very different audience from Pepper Fry.
If I have learned anything in the last few years, it was that advertising on Facebook & Google allows us to reach out to a more relevant audience than any other medium. This can be attributed to the targeting options available on these platforms that enable high end brands to filter out irrelevant audiences and showcase their products to the right people at the right time.
Whilst there are other factors that come into play as well for a paid marketing strategy to work online, such as the quality of the creative, the exclusivity in the copy, or the experiential aspect of your landing page or website, nothing makes a bigger difference than a robust audience targeting approach.
This post is going to focus on the different methods and techniques you can use as a premium brand marketer to reach out to the right people.
Without meaning to state the obvious, this is not a set formula that is guaranteed to work for your brands. Would strongly suggest using a combination of these techniques to experiment with your ads and optimise your targeting for different campaigns over time. It’s always a learning curve!
Over time, my teams have been successful in reducing CPL and CAC considerably, just through the right targeting. The right targeting will not only drive more traffic or sales, but will also lower your overall cost of running campaigns which in turn will improve your ROI and boost your bottom line.
The age filter goes without saying as often consumers of luxury products are slightly older due to their purchasing power. Age range can be decided depending on your TG and product.
A 25 year-old might still be willing to spend on a handcrafted elegant piece of furniture for Rs. 10000, but might not make an art purchase for over a lakh.
Middle-aged women are more likely to spend on premium skin care products compared to 20 year old women.
2. LOCATION TARGETING
Local targeting is an essential aspect of social media marketing for luxury brands. Find out where HNIs live and then further refine by postcode looking at the wealthiest hotspots in these cities. Geo-targeting is possible on both Facebook and Google Ads where a pin can be dropped on any spot on the map and a radius of 1-50 miles can be selected for ad placements.
Would definitely suggest targeting areas such as South Mumbai, South Delhi, and Koramangala in Bangalore for premium products. Google Ads allow you to even select specific pin codes.
On Facebook, advertisers have the option of targeting people within a certain area based on where they currently are, where they work or where they live. For premium brands, would highly suggest using the ‘where they live’ option.
3. CUSTOM AUDIENCES:
The most highly converting audience is generally an audience that has already engaged with your brand before. This could be your customer list, someone who has liked your Facebook page, someone who has visited your website, someone who has installed your app, or someone who has subscribed to your email list.
These people have already interacted with your brand before, meaning there is more familiarity which in turn means that they are more likely to convert.
For conversion-based campaigns, I try to only reach out to people who have made a purchase or transaction previously since they are more likely to convert again. Even though people may like your page or visit your website, they may still be on top of your conversion funnel and less likely to convert. However if my objective is to drive more traffic, I might choose to reach out to people who follow me on Facebook & Instagram but have not visited my website before.
Inserting Google and Facebook pixels on each page of your website allows these platforms to collect data of people visiting these websites through cookies which allows advertisers to reach out to them through campaigns.
If your product however is a one-time purchase such as a phone or a service that is availed of less frequently such as a premium salon or spa service, audiences who have recently transacted can be excluded from the list as well.
A lot of marketers tend to focus on new customer acquisition, when it costs a lot less to retain old customers instead. Re-marketing through custom audiences gives marketers a great opportunity to improve their Cost per Sale.
4. SIMILAR AUDIENCES & LOOKALIKE AUDIENCES:
In my opinion, this is the most high converting audience segment for new customer acquisition for niche brands. This audience type is called Similar Audience on Google and Lookalike Audience on Facebook.
Similar audiences help advertisers target people who have similar search behaviour, characteristics and purchase behaviour to existing marketing lists.
Digital algorithms use machine learning techniques to create correlations between online behaviour and potential purchases for each user.
Depending on how large advertisers want these lists to be, they can choose to select 1-10% lookalike lists.
Generally for niche campaigns, I have found 1% lookalikes of past customers to be most effective for reaching out to new customers.
5. AFFINITY & INTERESTS
Personally by and large, Interest targeting has not worked as well for me as Lookalikes for new customer acquisition for premium brands. Having said that, some advertisers swear by affinity and interest targeting.
Advertisers can use niche interests to target customers. Interests such as ‘Luxury Goods’, ‘Fine Dining’ , ‘Porsche’ , ‘Luxury Travel’ etc. In fact, the Facebook & Instagram dashboard also mentions your expected reach depending on your interests which can help determine how niche your interest group is.
Topic targeting on the Google Display Network allows you to target all sites and pages about a certain pre-defined topic.
Affinity targeting through Google Ads is similar to interest targeting. It helps advertisers reach out to customers who might be interested in specific industries or topics such as golf or art based on their browsing history.
The reason I have been averse to interest targeting for luxury/lifestyle brands is that people on social media tend to follow pages or browse websites of luxury brands as admirers who aspire to live that lifestyle rather than being actual customers, even though they could be potential customers for the future.
If you choose to toy with the idea of interest targeting however, would suggest using interests and terms that reflect the lifestyle of wealthy customers. Topics such as financial planning, international travel, golf, luxury cars amongst others can help target the right set of users.
Outside of Google’s defined audiences, search advertisers can combine keywords and URLs (Custom affinity audiences) to create an audience which is more tailored to their brand. For example, a brand such as Nicobar that positions itself as a sustainable fashion brand can create a list of keywords around ‘sustainable fashion’, ‘sustainable products’, ‘Eco-Friendly Fashion’, ‘Sustainable Fabric’ in addition to urls of websites related to these categories i.e. https://www.nicobar.com/
By far the most important targeting strategy for premium brands as it helps you exclude people who would be highly unlikely to be a customer.
For example, someone interested in fast fashion brands such as Pantaloons would be unlikely to be a customer of a custom shirt brand such as Bombay Shirt Company. Someone ordering from Dominos would be unlikely to be a customer at Gustoso (a high-end Italian restobar in Mumbai). Someone buying from Nykaa’s Skin Care Range would be less likely to buy from Estee Lauder. You get the drift!
Exclusion marketing is an essential part of distinguishing between consumers. Advertisers can exclude unqualified audiences who search for words such as “cheap", “budget”, “discount” and "free" from viewing your ads.
Facebook in particular makes it very easy to implement an exclusion strategy that allows marketers to exclude users by their interests or specific demographics. You certainly don’t want to waste your money on audiences that clicked but took no action after a certain amount of effort, or that never click at all.
As mentioned previously, exclusion targeting also helps brands that facilitate one time purchases exclude people who have recently completed an action on their website or app.
If someone has purchased kitchen appliances such as an oven & microwave from the Siemens website, it is highly unlikely that they would buy more of the same. However they may be prime candidates for purchasing other Siemens kitchen products. Hence, Siemens can exclude people who have purchased these products for ads that promote the same, but can target this segment for other kitchen products such as Kitchen Chimneys or Food Warming Drawers.
7. DEVICES USED
A very smart way of reaching out to consumers who own expensive mobile devices. People can be targeted based on owning Android phones or iPhones.
Previously, I have targeted customers who have owned mobile phones priced at more than Rs. 60,000 such as iPhones, Google Pixels, Samsung Galaxy S21 for my campaigns.
This particularly also helps for Install ads for premium brands.
Advertisers can also target Safari users. The assumption here is that people who own MacBooks or iPhones are of a wealthier disposition and hence might be a better fit for your luxury brand.
8. FREQUENT TRAVELERS
Most HNIs frequently travel for business and leisure.
Advertisers can consider targeting frequent international travellers which is an option for Facebook & Instagram ads. The assumption here is that people who travel internationally frequently are well off.
This is a great targeting tool for brands that play an important part in a user’s travel journey as well. This includes travel companies wanting to promote luxurious high end villas in the Maldives, swimwear companies such as The Beach Company, portable electronic products such as Amazon Kindle or even a portable Harman Kardon speaker.
9. BIRTHDAYS & ANNIVERSARIES:
There is an old Indian adage that people spend the most during three important life events: birth, marriage and death. Add birthdays and anniversaries to the mix and that makes it five important life events. The difference between the first three and the latter two is that the former are one-time expenses while the latter happens on an annual basis.
As advertisers, we choose to consistently promote our most expensive/premium products for special occasions such as birthdays and anniversaries. Facebook/Instagram gives advertisers the option to target people whose birthdays or anniversaries are coming up. You can also target people whose friends have birthdays and anniversaries are coming up.
At WowTables (a dining experiences platform in some of the country’s finest restaurants), we curated a list of top dining experiences and labelled them as ‘Celebrations’ experiences. We would position these experiences as an exclusive and premier service meant for special occasions and would target people whose birthdays were in the next 30 days. Results were astounding with this campaign being one of the best performing ones of all time. There was only one issue - scale. It was challenging to use various niche targeting parameters along with this targeting option to scale up conversions over a period of time.
Similarly, we used the option of ‘people whose friends have birthdays in the next 30 days’ to promote Gift Cards. The targeting option of Close friends of newlyweds and Friends of Newly Engaged People works brilliantly for gifting options of more than Rs. 10,000 such as expensive hampers and/or ornaments.
Facebook/Insta Advertisers can also target potential customers based on their relationship status.
You can target people based on their household income through Google Ads.
The seven available subsets for income targeting are:
Advertisers can reach out to the top 10%
How does Google know who the top 10% are? When a prospect signs in and makes searches, visits websites and makes purchases, Google uses demographic information synced from account information to map it to the account’s characteristics.
Facebook has the option of targeting by income only in U.S.A. so it could be used as a method for Indian brands shipping to the U.S.A.
Social media targeted advertising can also be applied to education if the platform user has listed their school or university. Whilst every person might not upload his/her university details on Facebook, almost every user would upload these details on LinkedIn.
This targeting option can be used to target people who have passed out from the Top B schools or universities in the world with the assumption of course that they have high pay packages and hence fall under the bracket of high spenders.
LinkedIn targeting enables you to target based on Education: Degrees, Fields of Study, and Member Schools
On Facebook, people can be targeted based on their industry, company they work for or job title.
One of my clients used this extensively for their corporate program to reach out to HR managers and CEOs all over the city.
LinkedIn targeting is extremely comprehensive to the point where you can target individual companies, specific job titles and member skills; however, you do need a minimum audience size – you are unable to target individual people in one campaign.
LinkedIn is the obvious choice for career-based marketing as it allows you to target by company size, company name and company followers. LinkedIn can also target job experience, titles, seniority and years of experience.
While more expensive than Facebook and Twitter’s social ads, LinkedIn is an ideal platform for when you have a very specific audience in mind, based on job roles and industry sectors.
For instance, a sophisticated formal wear brand can target people based on industry and seniority.
Expats living in India tend to have a higher purchasing capacity and hence, they fall under the ideal bracket for targeting for expensive products and services such as a private chartered helicopter ride by Blaze.
At Dineout, we promoted 5 star properties and luxury dining properties to expats who craved a plush experience.
Similarly, if there is something niche that people of a certain country relate to and miss from back home such as food or entertainment, they can be targeted accordingly. Expats can be targeted for the opening of a new European restaurant in Mumbai or a Jazz concert in Delhi of a popular artiste from the USA.
Nationality-specific targeting is possible as well such as expats originating from Italy or Brazil living in India. This can assist flight carriers such as Emirates in reaching out to expats from specific countries to promote first class/business class services on certain flights
So what is the ideal approach that should be deployed for luxury/lifestyle brands that are just dipping their feet into the ocean of digital advertising?
Go Narrow with your audience: Since it's a luxury brand, don’t be afraid to go too narrow. Use various parameters to narrow down your audience in order to reach out to the ideal TG. There are billions of people online so narrowing audiences can still help you tap into people mostly likely to buy your product
Go narrow but not too narrow also! Facebook recommends having an estimated audience size of at least 500,000 users for each ad. I prefer reaching out to at least 1M users for my ads but this completely depends on your brand, budgets and TG
So there you have it! 13 of the most high impact targeting options for your premium brands. As mentioned earlier, I would highly suggest a combination of these methods in order to define your target market. Only experimentation over a period of 4-6 months (or maybe even more) will help advertisers understand how they have gamed targeting for social media ads.
If you have to start somewhere and have limited budgets, I’d suggest starting off with Facebook & Instagram ads that, in my opinion, are most effective if done right. If you understand your ideal target market, use these methods to reach out to them and monitor performance over time to optimise your campaigns, you will see the ROI for your ads improve in absolutely no time.
Have some additional pointers to share or feedback? Comment below or reach out to me on @doshmeisterr on Twitter and @doshmeister on Instagram!