The End Of Facebook For Luxury Brands | Luxury Activist


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With more than Two billion users, Facebook became the biggest social media platform in the world. It represents 43% of the total internet population. On a daily base, more than one billion people connects to the platform and generates more than 4 million likes every minute. Launched in 2004, the social platform developed into a multi billion dollars business thanks to:

  • Qualitative data about its users
  • Clever targeting capabilities
  • Unbeatable costs
  • Simplicity of processes
  • Scale

Facebook allowed to luxury brands to access and utilize a mass media platform and still maintain a safe environment. While television and outdoor would have their limits for luxury brands, Facebook allows these high-end companies to target and craft their messages to their unique audiences.

The last 5 years saw a tremendous growth for luxury brands on Facebook and the part of the social platform in advertising investments was growing year on year.

Facebook: When Luxury brands embraced ROI

When Facebook allowed brands to advertise in the platform, it was a true revolution. Brands would be able to deliver their messages in a crafted way to the right audience at the right time. And the interesting part: brands would be able to measure every single interaction with their messages all the way. With a cost per contact at a ridiculous level, Facebook took over many traditional businesses like Print, TV, Radio and Out-door. The first facebook ad started when Facebook was still a private Harvard network. At that time, user experience, targeting and costs were not at all optimum but it was the beginning of a multi-billion dollar business.

One of the firsts Facebook ads

Luxury brands started their facebook pages and discovered the interest of direct relationship with customers. They were able to reach the right people across the world with the right message and at the right time. Some brands have shifted a majority portion of their annual media budget to facebook as it would allow them to work on different objectives:

  • Drive traffic: Facebook is the world champion referral
  • Increase brand awareness: Any one could become famous on facebook
  • Develop deep relationships with customers

When luxury brands realized they could reach people on Facebook for ten times less money than on traditional media, many utilize the platform as as main communication medium. 2009 was a terrible year for the luxury industry as many brands got into financial storms. Being able to reach millions of people with a low budget was something tempting to do. While costs on Facebook can be as tiny as four cents per contact, you will need to add a couple of zeros to get the same reach on television and print. This is when luxury brands started looking into weird words like ROI (Return On Investment).

luxury-brands-facbook-ads

If you would have an e-commerce activity to develop, Facebook becomes the ideal tool to drive the right audience to your e-shop and even to retarget that customer based on his behavior and interests. From a reporting point of view, no other media can beat Facebook. The granularity of details is tremendous and the optimizations are multiple.

Luxury brands are happy to embrace the advertising tools of Facebook because it provides scale with affinity. None other media can provide this, or at least at this level of efficiency.

The Future Of Facebook: Let’s Go Private!

Unless you missed the last Facebook keynote, you know what Mark Zuckerberg brought his vision about the future of Facebook. According to the company’s CEO, the future of Facebook is private! Users utilize the platform to connect with their closest friends and family. The development of What’sApp and Messenger, show the appetite for private messaging. Facebook launched rooms, during the corona virus period, which shows that their future investments are placed in the private messaging activity.

This means that people will appreciate to avoid any public interaction and go more in a one to one relationship during their discussions. The question is where and how luxury brands will be able to engage with Facebook users? How advertising will be perceived? And most important: How Mar Zuckerberg will monetize the platform? It is hard to guess. In all cases, this means the slow death of brands on Facebook. The more private the platform will go, the more non-relevant brand communications will be.

And Instagram Becomes The House Of Brands

Instagram-strategy-luxury-brand

Instagram was purchased by Facebook with the objective to develop a very complementary approach in which the focus was placed on brands, creators, and communities. People follow brands and content creators related to specific interests, which generates the creation of communities.

People can follow brand pages, hashtags, and key influencers, which is not a two-way relationship. The user’s behaviors on Instagram is more related to discovery and entertainment than private relationships. This shows how Luxury brands have the perfect platform to engage with current and potential customers.

Instagram-influencer-marketing

Instagram reached one billion users in total and more than 500 million daily active users. One interesting statistic is that 200 million people visit one business profile daily. And this is what we know from Instagram (source: Hootsuite):

  • 1/3 of most-viewed stories are from businesses
  • Brands post 2.5 Instagram stories a week on average
  • 62% of users say they have become more interested in a brand and products after seeing it in a story
  • 130 million users tap on shopping posts every month
  • 11% of US Instagram users shop on the platform
  • Instagram advertising reaches 850 million people
  • 73% of U.S. teens say Instagram is the best way for brands to reach them about new products or promotions
  • Brand stories have an 85% completion rate
  • Instagram represents 10.7% of referral share for e-commerce brands
Chanel-on-instagram
Luxury-brands-on-instagram

In the incoming years we will see for sure a big shift from Facebook to Instagram. Brands will leverage all the features the platform proposes in order to maintain a high engagement with their followers. Will brands shut down their Facebook pages? Not so sure but one thing is true: Brands will follow the best lead to the customer’s heart.

José Amorim



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