Why Luxury Brands Should Be On YouTube in 2022

Luxury brands and glossy magazines have historically been the perfect pair. When the web took over analog content, many luxury brands did what they do best, they bought against that luxury ad inventory online. Now luxury brands own the lion’s share of a few key publications’ digital inventory, as well as the YouTube and programmatic inventory. This strategy helps retain control and ensure safety, relevancy, and audience targeting when it comes to luxury ads. This in turn limits the risk inherent across the web and in particular, on user generated content platforms. 

The challenge with this content strategy, especially on YouTube, is that it can restrict scale and limit growth. That also limits new customer acquisition by missing out on key audiences that engage with a multitude of content. So how can you buy in premium environments on YouTube for luxury brands without sacrificing scale? By being selective, but not overly restrictive in your approach. 

1. Premium Environments & Premium Scale

Up to 27% of YouTube content is broadcast quality. When you think about how vast a platform YouTube is, the number seems small, but it actually reflects millions of videos and billions of views. With the right strategy, it’s possible to run in premium environments and limit non broadcast quality inventory. And within your content targeting strategy, it is important to be prescriptive about the type of content you want to run ads against. YouTube is not a one-size-fits-all platform for advertisements, and luxury brands should expect a level of customization and contextual targeting that matches their brand voice and ethos. 

Channels like Beauty Insider and the Luxury Travel Expert are examples of the type of content that we have suggested certain luxury brands include in their targeting strategies. Channels like these make it possible to run ads on content which reflects a specific image of a luxury fashion, automotive, alcohol or beauty brand.

2. Luxury Consumers Are on Digital

Between 20 and 30% of luxury sales are generated by consumers making luxury purchases outside their home countries.  Restricted tourism, as well as cancellations of fashion weeks and trade shows, impacted luxury brands’ ability to market their brands in the same way.

Meanwhile, watch time on YouTube increased by 80%. And while people watch more, they also are influenced by digital, with more than three-quarters of all luxury brand purchases influenced by digital touchpoints like Google and YouTube. In fact, 48% of affluent consumers use Google to learn about products, and over 40% of shoppers say that they’ve purchased products they’ve seen on YouTube.

3. YouTube is Tailored for Luxury Brand Experiences

The pros of working with YouTube are significant: scale and eyeballs. The challenge with a user generated content platform is that it is an ever evolving sea of content, with 500 hours uploaded every minute. This means that proactive content selection and content targeting is important, particularly for luxury brands. 

Strategy is Key

If a brand is thoughtful about their content strategy, YouTube can be an awesome platform for delivering messages by running exclusively against premium content.  Without a strategy for proactive contextual alignment, we’ve seen luxury brands running up to 23% of their media spend on content that’s not right for their brand, reducing efficiency and potentially opening up risk.

An example of this strategy? Video-gaming channels, while very popular, are not brand suitable for a lot of luxury brands.

CTV Market and Ads

Another benefit of YouTube is the platform’s dominance of the connected TV market. It’s the second largest app for time spent on CTV, and luxury brands are perfect for a bigger screen. 

According to research by Google, CTV ads can drive up to 47% lift in ad recall vs other formats. In a recent campaign we ran on YouTube via CTV, we saw a 97% video-completion rate, which is 10% higher than Google benchmarks for the average video-completion rate.

The Results: Luxury Success with Channel Factory

Channel Factory has worked with many premium and luxury brands from beauty to autos to fashion. We have leveraged our premium content targeting solution to find top creators and videos on YouTube which tastemakers, trendsetters and high net worth individuals are watching and engaging with. 

Through constant optimization of these targeting strategies, we have been able to increase quality scale over time while delivering against the right content for the luxury brand and beating Google click through rates, view through rates, and video completion benchmarks.

YouTube is the ideal destination for premium content and luxury brand experiences. If luxury brands team up with the right partner, they can reduce media waste against the wrong content, and deliver on their KPIs (such as view-through rate and click-through rate) against their audiences.