GUCCI: THE SPEND KATIE HOPKINS
The new vision is seen through a stylized Instagram that feels luxury even for a social media page, bringing indulgence free to their followers.
ADVERTISING Businesses operate using advertising to allow product to reach the masses and expose the brand to a larger consumer group. Through advertising, be it owned, paid, even online or off, it shows how brands produce content to attain customers attention, further resulting in the purchase of goods.
'The French luxury goods company invested more than 490 million euros in advertising in 2016' equating to £429m British pounds, this being 11% of their revenue, demonstrating that advertising is providing the best means of brand outreach and the large figure is worth the return on investment. (Statista, 2016)
The Oxford Dictionary defines promotion as ‘the publicising of a product, organisation, or venture so as to increase sales or public awareness’. This implies promotional activities are not only in place to inform the public of a brand but support yearly sales and revenue.
A key example of this is Kering shifting ‘its communication budget to up to 40% digital compared to up to 20% 18 months ago’ (Kirkpatrick, 2017). Not only Gucci but Kering, the luxury group owning the brand, sees the investment opportunities in promoting this way due to more interaction online.
Gucci was ‘One of the sectors leading performers’ in 2016, consequently their ‘revenue increased by 12.3%’ (Kering, 2016). It might be concluded from this that advertising had a major role in the increase due to brand outreach and social campaigns, the impact of promotional activities will be discussed further along with ways to monitor reach.
USE OF MEDIA: Looking at the four media channels (owned, paid, earned and social) it is clear how Gucci spend their budget and what the money translates into. Gucci’s own website provides a luxurious shopping experience with services such as email subscriptions and pages for the recent campaign imagery inspiring consumers purchases.
A YEAR OF GUCCI: 2016 became a year for increase, not only in revenue but communication budgets. Kering stated ‘In 2016, all signals – both qualitative and quantitative – confirmed the brand's spectacular growth trajectory, which is being driven by Alessandro Michele's highly creative vision’. This shows, with the innovative direction Michele has taken, it pays off in providing a new
consistent Gucci aesthetic that narrates itself to customers in a way they understand and relate to. For this reason, Gucci could have seen an increase due to younger consumers buying into the market as it becomes more desirable through channels they follow.
For example, in December 2017, the website had ‘15.26 million total visits with 10 pages viewed per visit on average’. The '19.32%' increase in views could be encouraged by the festive period with customers browsing the gift section (SimilarWeb, 2017).
The brand is recognised in magazines globally, as an offline mean of paid media. For example, in Vogue’s May 2016 edition they paid ‘£36,130’ for a single page advertisement which was paid specified. (Vogue, 2016) Whereas, last year in Dazed and Confused Vol V1 Autumn and Spring, a Gucci advertisement was evident on the inside front cover as a gatefold double-page spread. The cost difference for these two advertisements would be considerable due to glossier paper, 1st page advertising resulting in more attention towards the advert. Gucci’s regeneration and popularity resulted in the editorial value increasing ‘more than 15 percent for the first six months of the year in 2016’ (Hoang, 2016). This signifies earned media could be influenced by the global distribution of the magazines they feature in and, given this, the earned media value reached ‘$58m in 2017, up 179%.’ (£41m) (See Figure 1). Gucci is also seen via television adverts promoting fragrances. The Jared Leto Gucci Guilty advertising campaign in 2016 is estimated to have cost ‘$6 million to concieve’ (£42m) (Weil, 2016).
This way ‘Gucci is able to create a ton of hype online’ (Danao, 2017). Consequently, the brand becomes ‘a hit with younger so-called "millennial" shoppers, which account for more than half Gucci's clients’ (Business of Fashion, 2017). Advertising on Instagram in addition to posting campaigns costs ‘80p - £4 per day’ ($1-$5) (Instagram, 2018). Given their large customer base of millennials spend ’32 minutes on average daily’ on Instagram, this could be beneficial for the brand (Daily Mail, 2017). Contrastingly, as ’77.75%’ of searches are organic for Gucci, it suggests the brand is recognised enough to only advertise using their own channels. (SimilarWeb, 2017). Fig. 1
Not only does the budget pay for the curation but a primetime television advert could potentially cost '£8,000’ signifying the large spend. (The TV Agency, 2018). An advert for fragrance is directed at a wider target market and, being more affordable, provides a means to buy into the sought-after brand. All the same, social media exposes Gucci to the internet audience, a key example of this would be ‘inviting Insta-famous visual artists to recreate Gucci’s patterns, and making it a part of their own campaign’.
MONITORING ADVERTISING: Monitoring advertising can be a difficult process when working with out of home media types. However, with analytics on business Instagram
accounts, Gucci can see how many impressions the particular campaign or image has had with consumers. Analytics show where traffic to the website has traveled or which key words appeared in searches. For instance, Gucci pays for ‘1162 key words’ to appear higher in the search when these words are used, this is called Search Engine Optimisation. (SimilarWeb, 2017).
and development on similar campaigns.
The brand used snapchat in 2015 to create publicity on their recent Gucci Guilty fragrance. A snapchat takeover occurred by Jared Leto and ‘made 400 million impressions before its release in October 2016’ (Ochoa, 2017). This type of takeover can cost ‘$50,000 on the discover publisher channel’ (£40,517) or for a ‘sponsored lens - $450,000 and $550,000 per As Instagram ‘gives brands an avenue for rich day’ (£318-388m) costing more on holidays or visual storytelling’ it also provides analytics on special events (Wallaroo Media, 2017). These the outcome. (British Fashion Council, 2017). Gucci impressions show how well the advertisement was can then see the reach of the campaign, in this received, suggesting a positive return of example, the meme series of images that generated investment. hype online had a ‘total reach of 120,089,317’ (Heath, 2017). With this number, Gucci can Television advertisements like the Gucci Bloom compare this to other images allowing feedback fragrance can be recorded by airings, in this case it had ‘1,675 in the US’ (iSpot, 2017). In spite of this, it doesn’t tell the brand if this gained interest in the product and impact sales. A call to action would be in place on the advertisement itself to see how many viewers fully engaged with the film. Bloom had #InBloom in the closing frames for engagement purposes. The times the hashtag was then used is the indicator for Gucci to see the impressions from this style of reading. In magazines, similarly a call to action is used. Gucci could look at the product in the editorial and take the increase or number of purchases as the record for how well it was received. However, hashtags or landing pages can be seen to demonstrate this also. An advertisement in iD Fall 2017 included #gucciandbeyond, again, this outreach can be documented by number of uses.
OVERALL: Overall, Gucci is a growing brand with advertising spend rising and importantly revenue also. As the ‘underlying demand for luxury goods was strong in 2016’ this could have assisted Gucci in performance (Mintel, 2017). As a whole, ‘the luxury industry spent over $ 1 billion (£700,000,000) on digital ads in 2016, a 63% increase since 2013', therefore, it is clear to see the change in media from offline to online as our world revolutionises (Business Insider, 2017). Gucci’s status has risen to become 'one of the "hottest" luxury brands' and it is clearly seen that advertising changes the presence of a brand allowing it to be filtered down to the masses (Hoang, 2017). This report shows how Gucci promote, monitor and control their spending, if Michele’s vision stays as popular as it appears today, there is no question the brand will continue to succeed it’s potential.
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APPENDIX: Figure 1 found at: Gallagher, K. (2017). Luxury fashion brands shift budgets to digital. [online] Business Insider. Available at: http://uk.businessinsider.com/luxury-fashionbrands-shift-budgets-to-digital-2017-6 [Accessed 26 Jan. 2018].