We create advertising plans that are targeted to reach many demographics for our unique clients and their target markets. Demographics are how marketers categorize customer segments. By using the statistical characteristics of populations, advertisers identify the target audiences that they want to reach with advertising. Since our core service, media buying, requires us to be experts at identifying the best media channels for reaching specific demographics, we use data, research, experience, and intuition to create best advertising plans that target customer segments based on their characteristics. Today we’re going to highlight a few important things to consider for your luxury marketing plan.
A demographic that we’re well versed in is advertising to the wealthy. Affluence can be subjective. So we’re going to share with you a couple of the different types of affluent customer segments we’ve been very successful at reaching with our custom luxury advertising campaigns.
“Luxury marketing to affluent consumers is not as easy as geotargeting an expensive zip code with digital ads or adding a household income qualifier to a media purchase. Luxury marketing requires 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
The Millionaire Next Door
If you’re familiar with the books written by Dr. Thomas Stanley, 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 again and again among those who have accumulated wealth.
One of the most exciting discoveries Dr. Stanley made was that most of the truly wealthy in the U.S. don’t live in Beverly Hills or on 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 who have 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.
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 he wants to reach households with $250,000+ income.
But as we probe further into the psychographics of his typical customer, we learn more and 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. This demographic has an intrinsic need to show their affluence.
Dr. Stanley calls this demographic UAW which stands for Under Accumulators of Wealth.
The UAW Demographic is an entirely different demographic than the “Millionaire Next Door” profiled in Dr. Stanley’ decades of research and many books because UAWs aren’t always wealthy or affluent in terms of Net Worth. 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 the demographics most often targeted by luxury brands promoting status symbol purchases and high-end products. There is a solid ROI for advertisers seeking this demographic because these consumers are inclined to spend their high income. Think of the YOLO consumer. These hyper-consumers tend to be 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 Demographic fall into one of these profession categories. UAWs often see money as easily generated and therefore value it differently than the contrasting demographic we’re about to describe. These UAW buy wine, luxury homes in upscale neighborhoods, fancy watches, designer shoes, luxury cars, expensive handbags. This demographic can 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 high 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, so they require 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 considerably less concerned about status and glittering displays of wealth than they are 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
“This demographic is more concerned about value, financial security and investments than they are in flashier purchases and badges of wealth. Just as reaching an 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 that if you mistakenly design your media plan to reach the wrong one, you’ll miss the demographic entirely. It takes more than a luxury media kit, showing “high-income” to properly align media purchases with these unique affluent demographics!“
-Robin Rucinsky, President of Thrive Advertising
UAWs and PAWs Require Entirely Different Advertising Plans
If either of these demographics are 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 of successfully creating ROI producing media plans targeting wealthy consumers.
Contact us here to learn more about our custom designed media plans customized to reach these two very different wealthy demographics.