Finding the Understanding the The premium path What this means MSA delivers

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great ignored premium mindset to purchase for advertisers your audience

43%
half
Is your marketing strategy ignoring

33%
of online consumers buy ...and
premium products...

182 million
use the internet
to research of them?
...or people...

THE GREAT IGNORED

how demographic targeting is missing the premium consumer
 Finding the Understanding the The premium path What this means MSA delivers
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great ignored premium mindset to purchase for advertisers your audience

Premium consumers are not necessarily wealthy. Think about those teenagers
with iPhones or the couple whose cars cost almost as much as their house. Its not
as simple as basic demographics. Theyre harder to spot. In fact only half can be The average household income of a premium
picked up through standard demographic profiling. Only 1 in 4 earn 50k or more consumer is 39,000.
per year. To find them youre going to need a more sophisticated approach.
Theyre more common than you think with over 40 per cent of consumers buying More than 50% would not be classed as affluent
premium at some point. Its a group thats growing too, as savvy consumers trade using traditional demographic targeting.
up to premium products in sectors they care about. Our research shows that
people tend to be premium in a handful of categories where they see value in
spending more, perhaps saving money in other areas to afford it. Some might
even buy luxury in one or two areas. As you can see, theyre a complex group!
Why is this significant? Because advertisers have traditionally considered
premium consumers to be affluent and have assumed that by talking
to a specific audience (ABC1s for example) they would reach their
target consumer. However, doing this misses a very large group,
in fact 54 per cent who might be buying premium in a particular

Source: A Cut Above the Rest research, 2010

category. We call them the great ignored.

Its a mindset, not demographics.

Patricia Consonni, MRM Worldwide, Italy
54% 46%
Standard Luxury

Hidden affluent Demographically

The great ignored affluent

Demographics wont cut it

You need to know how they think
 Finding the Understanding the The premium path What this means MSA delivers
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great ignored premium mindset to purchase for advertisers your audience

In some ways its easier to define premium by explaining what it isnt. For starters, it isnt
luxury. Luxury items generally command a price premium of at least 50 per cent over
mid-market goods, whereas premium occupies a space between mid-market (meaning
43% of online Europeans buy premium.
standard or mainsteam) and luxury that is generally between 20 and 50 per cent higher
in cost. And its a growing sector with 43 per cent of online consumers already buying There are 182 million premium consumers
premium at some point. in Europe.
So premium is a purchase that is, for the ordinary consumer, a stretch above the normal
but still affordable. Take a television set for example; the mid-market purchase might be
an LG for 350, the premium purchase a Sony Bravia for 450, and the luxury purchase, a
Bang & Olufsen state of the art set for around 2,000. For a car, the equivalent might be a
Ford Mondeo at 20,000, a BMW 318 at 24,000, and a Bentley at 140,000.

Im not a big spender but, what I will do, is

save up and buy the very best quality I can.
Mark, 40, UK
In the past, it was largely assumed that people who

Source: A Cut Above the Rest research, 2010

purchase premium products were demographically
affluent, but this is inaccurate. Brands that only use
traditional demographic targeting to reach this
audience segment would miss more than 50%
of consumers who are buying premium, as they
wouldnt be classified as affluent.
Although many brands believe they offer a premium
Standard
Luxury
product or service, not much is really understood about the premium consumer. The
groups existence is often ignored, with the world seen as simply luxury and everything
else. This is why Microsoft commissioned the Cut Above the Rest research study,
summarised here and available in full from your local Microsoft Advertising team. Premium

PREMIUM IS NOT LUXURY

And not affluent either
 Finding the Understanding the The premium path What this means MSA delivers
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great ignored premium mindset to purchase for advertisers your audience

Where mid-market is mostly rational, and luxury is predominantly emotional,

premium sits between the two and the purchase, based not just on price
but on desire for something better than average, involves decisions on both 73% of premium buyers admit to doing a lot of
levels. And theyre selective, paying more for something in a specific category research about a purchase.
or trading up in an area that interests them whilst remaining decidedly mid-
market in other areas. 54% of premium TV buyers use the internet to
Those who buy Sony TVs over LG, or pay a premium for organic food, do so inform a purchase.
because they can see a distinct benefit in performance, features, quality and
other factors. Reputation plays a role, but it acts as an indicator of the brand
values rather than a simple emotional driver (which means brand advertising
alone is not enough). Brand is only worth it when it is
Mid market doesnt have to justify itself (its the average price), nor does luxury supported by high quality... the name
(thats the definition of luxury) but premium needs to demonstrate values itself is not enough.
that appeal to the rational and emotional. Premium buyers take time to reach
their decision, weighing up the rational benefits while using the emotional cues Michele, 45, France
to shortcut the decision process.

Source: A Cut Above the Rest research, 2010

Premium buyers therefore need to be engaged throughout the sales cycle. To
do that, you need an integrated media plan, where providing information to
support decisions is pivotal in guiding consumers to your product or service.
They need to see the tangible benefits delivered in order to weigh up your
product against a mid-market alternative. Appeal to their rational mindset and
theyll be inclined to pay more.

Im fairly prudent at heart, I dont like wasting

money. Every penny I spend I like to know is well
spent, which is why I tend to do a lot of research
before I buy. Mark, 40, UK

Its a rational choice

So you need to show your value
 Finding the
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great ignored
Premium buyers get their awareness of your
product the way everyone else does
from your brand.
But the premium customer researches brands
to ensure that the one they want is the best
for them and overwhelmingly, use the
internet to do it.
The premium customer isnt all about rational
decisions they have a feelgood factor as well
and it comes from buying the best.
Steer the most likely customers to find the knowledge
that your products a cut above the rest, and give them
the feelgood factor that buying the best confers and
youre much closer to ensuring a sale.
Online research is
But you need to support your offline activity too
key
Understanding the The premium path What this means MSA delivers
premium mindset to purchase for advertisers your audience
Research, research, research. If you havent got the message, the premium purchase path is
Source: A Cut Above the Rest research, 2010
based largely, though never exclusively, on research. And theres no better place to conduct
research than online. Premium consumers are a sociable group and they like to share their
expertise, making social media a big part of the path to purchase as they seek out opinions
or become advocates themselves.
Our research shows that advertisers should not focus on what makes premium consumers
different, but on what makes them the same. Not income, age, or sex, but purchasing
behaviour. All premium consumers purchase products in a very similar way, whether they are
demographically affluent or not. Their interest may be attracted by your brand image, either
offline or online, or via word of mouth from friends and family online or in person, but theyll
look beyond the surface before making that decision to pay more for your product.
This initial phase is followed up with a research phase in which all premium consumers seek
to find out as much as they can about the product before buying it. This is because they
want value, in addition to the feel good factor about that brand that was initially sparked
in phase one. It is absolutely essential that brands get this right, as it holds the key to the
premium consumers mind-set and wallet.
All premium consumers purchase products in a similar way.
Research is key to influencing decisions.
I go on the internet, look for the product, look at the price, I look
at customer reviews and blogs, I look at technical specs; I do
everything on the internet. Marcel, 28, Germany
 Finding the Understanding the The premium path What this means MSA delivers
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great ignored premium mindset to purchase for advertisers your audience

The premium audience is a tangible group, and offers real opportunities for A premium brand cant rely on brand advertising alone
advertisers who are not currently targeting this sizable audience segment.
the image a consumer has of the brand is built on many
Its clear that an integrated offline and online branding campaign can play a
significant role in prompting a purchase for a premium product buyer, and long term and short term differentials. In todays marketing
so marketers need to be sure to get this right. In addition, the use of social environment, this means that readiness of brand and product
networking is key, tapping into the importance of word-of-mouth.
information, social networking presence, point-of-sale sales
However, advertisers also need to ensure they are doing enough in the second
research phase of the purchase cycle too. Building a brand presence in online knowledge and post sales service (to name just a few) are
channels such as instant messaging, email and social media, and linking crucial elements of the brand strategy.
through to useful information is an essential part of the process.
Toby Shaw, Brand Manager, Sony Electronics
So, in summary, brands need to look beyond demographics to find the
majority of the premium consumer group, creating campaigns that explain
the tangible value offered by their brand. Its not enough just to advertise
product or image, instead requiring a more consultative approach based on Premium is a big market (with over 40% of consumers
the provision of key information. buying premium at some point).

Source: A Cut Above the Rest research, 2010

Online consumers need to realise that a product is a cut above the rest. But dont confuse premium with affluence - over half of
premium buyers are not affluent.
Premium products have a tangible benefit its worth
spending more.
The purchasing decision is primarily rational, supported by
emotional factors.
Information is king premium consumers do their
homework before buying.
Online is the obvious place to reach premium buyers, as
part of a blended campaign.

You need to use the right tools

And understand your audience
 Finding the Understanding the The premium path What this means MSA delivers
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great ignored premium mindset to purchase for advertisers your audience

Microsoft
11 M Media Network
H 4 S
To 123 otm Messenger* #1 m u N 300 top
p m po ser B
75m ing
em u ai 122m users Xbox live
ail ser l rta s * global websites
se s * Market leader l use
rs * 36m users*
rv
ice

* figures show monthly European users

So there exists a growing savvy premium audience. But how do you find
them and connect with them online? This is where we can help.
Microsoft Advertising is recognised as having a truly premium network,
with notable inventory that people know and trust. Our quality is second to
none, with premium properties such as MSN, Windows Live Messenger and
Success Stories
Innovative menswear e-tailer Poshcuffs have achieved great
success driving sales using Microsofts targeting solutions to
reach a premium male audience. Read more...

Source: A Cut Above the Rest research, 2010

Hotmail, as well as over 300 premium sites across our Media Network. And
with 167 million unique users, we bring breadth as well as quality.
Our market-leading support goes beyond inventory, featuring full targeting
solutions to reach and deliver the audience you need. Our wealth of audience
insight will help you understand how, where, why and when your customers
purchase. We have the social networking and targeting tools to reach the right
eyeballs at the right times, and Rich Media solutions to really engage with
consumers on sites they love and trust. And with our profile, behavioural and
remessaging targeting tools, we can help you identify your target audience,
continue the conversation, extend campaign reach, and drive purchases.
In short, Microsoft Advertising lets advertisers safely reach the audience they
need, across premium inventory, using a wide range of targeting solutions.
Premium skincare brand Nivea increased purchase intent by
34% by intelligently targeting its audience, with help from
Microsoft. Read more...
When BMW wanted to launch the new X1 to a discerning
audience, they turned to Microsoft Advertising, resulting in 8%
increase in brand awareness and 10% increase in intent to buy.
Read more...
Travel and leisure retailer lastminute used Microsoft
Advertisings targeting solutions and achieved stunning results
over 100% increase in conversions and 6,300 new purchases.
Read more...

Your trusted partner

To becoming a cut above the rest