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Luxury brands increase social media budgets

Luxury brands like Gucci, Louis Vuitton and Christian Dior are targeting social media platforms like Instagram for advertising their collections. Brands like LVMH and Kerings are increasing their advertising budgets for the social media. Kering spent almost half of its revenue on digital advertisement in 2018, a 20 per cent increase from that spent in the last three years.

Kering’s rival LVMH also increased its expenditure on marketing in 2018 to 5.6 billion euros, reaching 12 per cent of group revenues — more than most brands that disclose this budget and topped only by another big online trendsetter, privately-owned Chanel.

Louis Vuitton allocates half its marketing costs to digital media. Italian shoemaker Tod's is also among a clutch of brands that invests in social media in a bid to revive its sales. The brand including LVMH's Christian Dior, Marc Jacobs and Givenchy labels were among Tribe Dynamics' top 10 brands listed last year, with Kering's Saint Laurent and Balenciaga also featuring on the list. The list quantifies the total value of this social media buzz on a brand’s performance.