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Why Europe’s storied luxury brands are delving into programmatic

A ring box containing a golden megaphone sparkles.

Illustration by Jen Satzger / Getty / The Current

Not everyone may know Kering, Richemont, or LVMH, but most people are sure to be familiar with the brands housed under their umbrellas, like Gucci, Cartier, and Dom Pérignon.

As these and other European luxury giants expanded in recent years, they amassed a constellation of the world’s most prestigious brands — and the clout to leverage advertising firepower normally reserved for the world’s biggest marketing outfits.

Now some are combining their centuries-old heritage with cutting-edge marketing as they chase after a global personal luxury market that is predicted to grow more than 50 percent by 2030 from its 2022 size.

Agency leaders who spoke to The Current said Europe’s luxury giants are drawn to programmatic because of its transparency and effectiveness, although for now the interest is relatively nascent, at least compared to their mass-market peers.

But as formats like connected TV (CTV) and digital out-of-home (DOOH) grow in popularity among marketers, luxury brands are increasingly finding that programmatic advertising can help deliver the kind of brand-boosting performance previously reserved for glossy magazines and high-budget TV ads.

“There has been an uptake in spend across programmatic activity for luxury buyers, who are reaping the benefits of things like transparency, consolidation, and performance,” says Josh Wilson, client director at Dentsu who leads programmatic work on the Kering Group for the agency

“There’s an appetite to grow more in this space with new topics like attention and green media, looking at what efficiencies you can get out of your spend,” he adds.

Stringent parameters

Luxury brands’ primary concerns revolve around their reputations, which means they seek “exclusivity, special ad formats, and high-quality inventory to showcase their products and image effectively,” says Fabian Kietzmann, chief products and services officer at GroupM Germany.

From precise targeting to brand safety tools to specific inventory deals, programmatic advertising lets luxury brands cherry-pick their approach, says Kietzmann, adding that it can also deliver cost savings through a more efficient buying strategy.

When it comes to targeting, luxury brands are stringent on their parameters. “For [Kering-owned] Bottega Veneta, they are very interested in driving quality traffic to the website, getting users through the door, and [customers] spending a prolonged period of time on the website so that they can flick through the products and the price points,” says Theo Reisz-Gervis, account manager at Dentsu.

And since Bottega Veneta doesn’t have a social media presence, its paid ad media is “programmatically focused,” he adds. Reisz-Gervis notes he is also seeing growing interest from luxury brands in channels like CTV and DOOH.

For Porsche, which works with Omnicom Media Group (OMG) globally, one of the key metrics is qualified leads and the corresponding KPI is cost per qualified lead, says Uwe Roschmann, managing director at OMG Germany, which works with clients such as Bentley and Chanel.

“The more interesting part is having the opportunity to do better targeting than with any kind of IO [insertion order] or price-list booking, and therefore being more relevant for those consumers that I actually want to address,” says Roschmann.

Protecting their brand

Protecting and amplifying their brands is paramount for luxury firms, which often means striving for 100 percent share of voice in their campaigns. “From a user’s point of view, if I saw Gucci next to Chanel, and one placement was bigger than the other, immediately I’d be thinking, ‘Well, why is one video dominating that space?’” says Dentsu’s Wilson.

Even though Europe’s top luxury brands often make their names on the new and different, it can still be a challenge to get them to consider a diverse selection of publishers. But consumers may not “spend hours on end on Vogue,” says Wilson.

Misconceptions hinder some luxury brands from diversifying their media strategies, says Roschmann, such as that programmatic means “cheaper.” Others are keying into premium content on the open internet, from CTV to podcasts, and programmatic’s ability to create a consistent and coherent consumer journey.

“I have to understand what I have told a target consumer [in order] to make sure I’m telling the next most relevant thing, and programmatic arguably is the one solution that allows you to do just that,” says Roschmann. This can be achieved with exclusive/inclusive lists, PMP deals, and very stringent and clear targeting, he adds.

A new(er) opportunity

Another factor for luxury brands to consider is generative AI. New technology could flood the internet with easily produced, low-quality content, which could drive up the cost of ads, says Roschmann. He theorizes that the relative amount of high-quality content will decrease, resulting in the same few luxury brands growing their ad spend on a small number of publishers.

For the marketers guiding luxury brands along this path, it’ll be about identifying the right moment and media to deliver the right message to the right target groups.

“It’s been true for 30 years, it’s just that programmatic is a newer opportunity to get there,” says Roschmann.