Luxury Marketing: Advice to Advertisers Who Run Luxury Marketing Campaigns

We create advertising plans targeted to reach many demographics for our unique clients and their target markets. Demographics are how marketers categorize customer segments. By using statistical characteristics of populations, advertisers identify target audiences they want to reach with advertising.  Since our core offering is media buying services, we’re media experts skilled at identifying the best channels for reaching custom demographics. For example, one luxury marketing demographic we target regularly is often sought after, and we’ll share some tips for reaching high-income prospects below. 

We use data, media research, 18+ years of experience, and professional intuition, to create the best advertising plans to laser in on target customer segments based on their characteristics. Below we’ve highlighted a few important factors to consider for your luxury marketing plan.

Affluent Demographics

A demographic that we’re well versed in is advertising to the wealthy. Affluence is subjective. So we’re going to share a couple of the different types of affluent customer segments with you we’ve been very successful at reaching with our custom luxury advertising campaigns.

The Millionaire Next Door

If you’re familiar with the books Dr. Thomas Stanley wrote, you may be familiar with the concept of the “Millionaire Next Door.” Dr. Stanley, the bestselling author of the book with the same title, identifies seven common traits that show up repeatedly among those who have accumulated wealth.

One of Dr. Stanley’s most exciting discoveries was that most of the truly wealthy in the U.S. don’t live in Beverly Hills or Park Avenue; they live next door.

In his books (we’ve read them all!), he highlights the differences between those who appear to have a high net worth and those with a high net worth. Understanding the differences and identifying the emotional ways consumers spend, save, and invest money is imperative to figuring out how to best advertise to the defined affluent demographic.

We’ve spent years learning the mindset of wealthy consumers who have diligently accumulated wealth over time. But, unfortunately, it’s not as simple as asking,

“How to advertise to rich people?”

It’s much more complex. 

High-Income Producers +Hyper-Consumers

The advertisers we meet with who want to reach this demographic typically begin by describing their target demographic as merely “affluent” or by giving us a target household income to reach. For instance, John owns a luxury car dealership and wants to reach households with $250,000+ annual income. 

But as we probe further into the psychographics of his typical customer, we learn more. Usually, by the end of conducting our marketing needs analysis, we discover that John is interested in targeting consumers who earn high incomes AND have the propensity to spend on status products and brands that are badges of wealth. Thus, this demographic has an intrinsic need to show their affluence. 

Dr. Stanley calls this demographic UAW, which stands for Under Accumulators of Wealth.

Under Accumulators of Wealth

The UAW Demographic is an entirely different demographic than the “Millionaire Next Door” profiled in Dr. Stanley’s decades of research and many books because UAWs aren’t always wealthy or affluent. There is often a negative correlation between their purchase of luxury items and overall Net Worth. Dr. Stanley affectionately calls this demographic:

Big Hat, No Cattle

The UAW hyper-consumers are often targeted by high-end brands promoting status symbol purchases and luxury product marketing. There is solid ROI for advertisers seeking this demographic because these consumers are inclined to spend their high incomes. Think YOLO consumer. These hyper-consumers are professionals, doctors, lawyers, and corporate managers. While this is not a rule, and it certainly does not mean all doctors or lawyers are big spenders, the research does identify that nearly all the UAW Demographics fall into one of these profession categories.

UAW’s often see money as quickly generated and value it differently than the contrasting demographic we’re about to describe. These UAWs buy fine wine, luxury homes in upscale neighborhoods, fancy watches, designer shoes, status cars, expensive handbags, and extravagant vacation homes. This demographic may even be significantly in debt despite their high income. Think of the many celebrity stories you’ve heard of “wealthy” celebs who spend like billionaires yet earn like millionaires! 

In contrast to the UAW Demographic detailed above, Dr. Stanley identifies what he calls the Millionaire Next Door. 

Meet the Millionaire Next Door

It’s critical not to overlook the differences between these two high-income demographics when marketing to “wealthy” people.

The Millionaire Next Door is a very different demographic from the UAW Demo, requiring an entirely different advertising strategy. This demographic,  Dr. Stanley calls PAWs, Prodigious Accumulators of Wealth. 

 The PAW Demographic has a “lot of cattle,” no big hat needed!

This PAW Demo is less concerned about status and glittering displays of wealth than about financial security and making value-based purchase decisions. This demographic usually contains:

Business Owners, Teachers (Yes, teachers! Who have become savvy investors), Engineers,  Sales Professionals, and Blue-Collar Workers.

Does this surprise you? It did us before we knew all about luxury marketing! This demographic is more concerned about value, financial security, and investments than in flashier purchases and badges of wealth. As reaching a UAW requires extensive knowledge and experience, reaching a PAW requires the same experienced strategy and custom-created advertising plans. These two demographics behave so differently, if you mistakenly design your media plan to reach the wrong one, you’ll miss the demographic entirely. It takes more than a luxury marketing media kit showing “high-income” to properly align media purchases with these unique, affluent demographics!

Wealthy Demographics Require Different Marketing Plans

If either of these demographics is part of your luxury marketing plans for your business, we’d love to meet with you to discuss what we’ve discovered through our years of experience in successfully creating ROI-producing advertising plans targeting wealthy consumers.

“Luxury marketing to affluent consumers is not as easy as geotargeting a wealthy zip code with digital ads or adding a household income qualifier to a media purchase. Luxury advertising plans require a deep understanding of the psychology of wealthy consumers and an ability to use that knowledge to reach them better and more strategically.”

Robin Rucinsky, President of Thrive Advertising

Contact us here to learn more about our custom-designed media buys for reaching these two very different wealthy demographics.

Bonus Fun Fact about the Affluent

• “The average age of U.S. investors with $25 million or more is now 47, an 11-year drop since 2014. As of 2016, 172,000 households were worth at least $25 million, up from 84,000 in 2008.” -Money, January 23, 2019