Traditional media remains in the category of marketing costs. Brand-proprietary social networks on the other hand, because of the long-term relationship they allow to support with the market, can be considered a marketing investment.

Let’s look at a quick comparison between a classic magazine ad and an interactive online platform owned by the brand:

Option 1. The Magazine Ad:
1) One-time reach to its audience (at publication)
2) Undefined ROI (not sure whether someone actually took the page and ran to the boutique – and let’s not cover the “brand awareness” return here, we are sticking with tangible data)
3) Competitive level: very high (next to several other brands)

Option 2. Proprietary online platform:
1) On-going reach (members have profiles they regularly access)
2) Specific ROI (you can calculate return on investment per capita – again using profiling)
3) Competitive level: extremely low or non-existent (the space belongs to the brand)

Proprietary platforms and other interactive approaches to the market are completely reshaping the business landscape. Directors of Marketing and now more often CEOs and Managing Directors are blinking at the impact that this trend is forming in their business. This is particularly true when it comes to luxury where aspects like “personal”, “local”, “relevant”, are pillars of the marketing mix.