14 DAY TRIAL // Brands shouldn’t confuse affluent with premium or they risk losing audience – this is the conclusion to Microsoft research focused on consumers that spoil themselves with premium products, for which they are willing to pay at least 20% more, compared with standard brands. Essentially, Microsoft Advertising is indicating that the premium category is in no way limited to the affluent demographic. The Redmond company revealed that, in Europe alone, the majority of 43% of online consumers that bought premium products belonged to a household with a pre-tax income of under €50,000.
“Brands are constantly confusing ‘affluent’ with ‘premium,’ and the end result is this huge lost audience group that we are calling the ‘Great Ignored.’ The fact is, affluence is a demographic measure that in all probability misses out on millions of potential sales in some of the most competitive categories in the market,” Laurent Delaporte, vice president EMEA, Microsoft Advertising, explained.
According to Microsoft’s research, some 54% of the consumers that acquired a premium product in Europe did not belong to an affluent demographic. Microsoft explained that brands should focus on tailoring campaigns more to purchasing behavior, and less to the actual demographic.
“Unlike luxury consumers who act on impulse and emotion, the Great Ignored are much more rational. They want the positive brand association of premium products, but also need to feel as though they are getting value. If they’re not getting the data they need to back up their decision, they simply won’t hand over their money,” Delaporte added.
One trend that Microsoft underlined was related to customers looking up information on certain products online. No less than 73% of premium consumers do ‘a lot of research’ before deciding to go ahead with a certain purchase. With key information, the Redmond company indicates that building brand awareness online is vital for companies that want to increase sales by accessing an untapped consumer segment.
“It is imperative that companies targeting the premium consumer feed this audience with as much information as possible. Our data shows that helping consumers build up their knowledge about a product is what turns casual interest into a premium sale. At Microsoft Advertising we are working with some of the world’s most reputed brands to help them engage with the premium consumer in the right way, at each phase of their online journey. With an online audience of over 204 million in Europe alone, many of them premium consumers, Microsoft Advertising provides a broad range of impactful opportunities for brands to reach the premium audience in a highly targeted way,” Delaporte said.