Much of the fashion world’s ad spend is funnelled into social, yet many in the industry have been frustrated by the fleeting nature and low conversion rate of these impressions. Content quality is key (McKinsey analysis).

26/4/2021

How Burberry Is Leading the Transition to Digital Marketing

Recently, the Money Maze Podcast spoke to Sir Martin Sorrell, founder of WPP and Executive Chairman of digital advertising business, S4 Capital. Sorrell was the longest serving CEO of a FTSE 100 company when he retired from WPP in 2018, and since establishing S4 Capital, he’s spent $500 million on acquisitions. S4 Capital now has over 2,800 employees.

For the big 5 ad agencies, 2020 was ghastly. Traditional spending fell by 7.5% compared to 2019, as organisations looked for cost efficiencies. Digital spending was the only medium which saw growth in 2020, accounting for 71.4% of total UK advertising spending.

With a 15% increase in revenue and 20% increase in gross profits, 2020 was a year which epitomised the ambitious, innovative journey which S4 Capital has just embarked upon. Speaking to the podcast’s co-founder and host, Simon Brewer, Sorrell outlined how S4 Capital has become a major force in the advertising world so quickly and how their holy-trinity focus on first party data and programmatic advertising enables them to deliver faster, better and cheaper advertising (full episode below).

We can look to Burberry, an elegantly British fashion brand founded in 1856, for inspiration. Their first big break was in 1880, when Thomas Burberry introduced gabardine to the British market and supplied the British Army with trench coats during World War Two. Employing the likes of Ronald Reagan, 40th US President, as brand ambassadors, they maintained their position as one of the most eloquent British fashion brands during late 90’s. The trench coat is Burberrys most iconic line today.

In 2006, Burberrys new CEO, Ahrendts, announced their aim to be the world’s first fully digital luxury company. Now, they spend over three times the average investment than their competitors on digital advertisement. They broadcast catwalks, and have launched initiatives such as the Burberry acoustic – live music performances exclusive to Burberry. If you think back to 2012 at JFK, Burberry launched a welcome banner to reach their chic, affluent audience. When London Fashion Week went digital, Burberry were prepared.

With Burberry now sitting in the top 3 most followed luxury brands, the top 10 on Instagram and with over 17 million followers on Facebook, I think we can confidently say that Ahrendts’s modern, innovative and unorthodox digital strategy promoted Burberry’s mission to be at the forefront of British elegance.

Thanks to its visual focus and wider aesthetic, Instagram has become a key target for fashion advertising. Consumers have responded accordingly (Data Credit: Social Bakers Report)

The introduction of film and radio in the early twentieth century made the ad industry more diverse. In the 1920’s, firms began working with psychologists to understand behaviour and make their offer more desirable. However, it wasn’t until 1991, that there was a breakthrough which would enable the integration between advertisement, technology and psychology: the internet.

Digital advertising can reach anyone, anywhere, at any time. But, it is far more than that, this is about understanding populations, building relationships and dishing up relevant content at the appropriate time to the best prospective audience. Brands have turned to making their products popular, trendy and a prerequisite for society. It’s about influencing, reaching new customers and provoking the interest of those you haven’t yet reached, whilst building brand loyalty.

With digital spending set to overtake traditional spending for the first time in 2021, it’s no wonder that Sorrell’s S4 Capital is a purely digital, data driven business, built for tomorrow.

I hope you’ll join me in my excitement about the future of advertisement, a fast-growing sector expected to surpass 526 billion dollars by 2023!

By Joshua Hardy, a Money Maze Podcast Brand Ambassador. Josh is studying BSc Accounting and Finance at the University of Exeter and is an individual strongly motivated by the world of business. He is a Governor at Great Ormond Street Hospital and is a member of the Membership Committee. Visit him on LinkedIn here.

Watch Sir Martin analyse the digital marketing sector. He suggests that digital advertising will continue to drive the wider sector’s growth in 2021 and beyond, ensuring S4 Capital is in a strong position moving forwards.

All content on the Money Maze Podcast is for your general information and use only and is not intended to address your particular requirements. Money Maze Podcast content, including this article, is funded by third party advertising only. We do however offer paid-for content on other shows in our network. Full disclaimer here.

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