This headline got your attention, didn’t it? It doesn’t matter if you are a small business owner doing your own marketing, a medium sized business that is considering in-housing or working with agencies, or a large enterprise company that has in-house teams and works with dozens of agencies worldwide, you will always want to know what professional luxury marketing should cost you or if you are overpaying on what you are doing right now. So in the spirit of bench-marking and making educated business decisions, let’s dive into the topic. I think you will be surprised.

how much does luxury marketing cost



This article is written from a digital agency perspective (we use a data-driven direct marketing approach), so it is only natural that we would be a bit biased towards using digital agency services for luxury marketing and that we think that selling to high-net-worth-individuals online works really well if done right. That doesn’t mean traditional analogue methods like networking or events won’t work, but we are looking into what will still work in the next couple years and beyond.  A lot of the cost examples are either from travel, private aviation, yachting or hospitality marketing, since we at Jadewolf specialize in the luxury travel industry. But overall the principles laid out in this post can be applied to other luxury verticals like fashion, jewelry etc. as well.

how much does luxury marketing cost

What Style Of Marketing Are You Doing?


Before we delve into mindsets and actual costs, it is highly important to differentiate between the two major styles of luxury marketing that are out there: brand marketing and direct marketing.

In brand marketing it is all about creating exposure in wealthy circles and among the general public as well, so your brand develops an aura of exclusivity but still is perceived as desirable and famous by the masses. As such we are looking at a very long-term perspective here, usually several decades, depending on the investment. From a tactical perspective brand marketing usually consists of a mix of ongoing event sponsor ships, trade show appearances, celebrity ambassadors and influencers, a lot of print ads in luxury magazines, art or architecture exhibitions, stunning photo editorials with famous photographers and models, out-of-home billboards in central locations, public relations initiatives, even TV ads or highly stylized short movies.

As you can imagine there is no upper price cap on what brand marketing can costs, since it is mostly about creativity, being visible worldwide and taking the long-view. As such, it is only feasible really for large multinationals or companies backed by venture capital with very high profit margins, since the marketing costs in these cases can be astronomical with a return that is rarely really measurable over time. (There is a reason why a lot of luxury brands these days are owned by investment groups which are backed by the stock-market, these guys can afford these expenses and types of upfront risks).

The style of luxury marketing we do for our clients on the other hand is direct marketing. Data-driven direct marketing focuses on building measurable funnels and life-cycles with targeted media buys, personalized luxury content and smart marketing automations. It is focused and generates leads, bookings and sales that can significantly affect the bottom line of a company in a positive way in the short, mid and long term if done right. Since direct marketing is what we do best, this rest of the article will obviously cover the costs of doing direct marketing for luxury travel the right way.

The Wrong Mindset


“I don’t want to spend money on promotion, it should be free”, “Can you guys give me some strategy or tactics for free that don’t need a lot of money or investment upfront so I can pay you later once I get results?” or “We don’t spend a lot of money on paid marketing, we rely on our sales team or network”. If you’re mindset is still like this in 2020, even after looking at all the advertising statistics that come out all the time, all the industry reports that say digital is on the rise, digital is the future and businesses need to get ready or become obsolete, then I’m afraid nothing I write in this article will help you or change your mind. Your business will most likely stagnate at some point because sales = singular wins but marketing = scale and growth. And to be honest, we would prefer if you wouldn’t contact us in that case but instead go to Clients From Hell and read a little about people that have a perspective similar to yours. 😉 Let’s move on.

how much does luxury marketing cost?

The Right Mindset


Still here? Well then let’s get serious. The basic premise in luxury direct marketing should be: “Something that works should have an unlimited budget.” Let that sink in. Once you build a funnel that produces leads or bookings for you with a predictable cost structure on a consistent basis, you can scale your business as much as you want, sky is the limit, since the whole thing pays for itself and produces profit as well. But to find the right media sources, the right type of content and back-end technology that makes up a great luxury marketing funnel you need to have a scientific mindset (hypothesis -> experiment -> analysis). If you want to reduce the trial and error for something like this, contact us (but beware, we WILL charge you for our work, no freebies).

how much does luxury marketing cost

Doing The Math


The math for direct marketing that decides if what you are doing is profitable and worth pursuing follows a basic formula that always applies. Assuming you are starting with one funnel then the only thing you need to switch out are the amount of media budget you want to invest and your general profit margin per sale (rough industry averages for hospitality would be 08-15%, private aviation 15-20%, yachting 10-15%, travel agencies 05-15%). The formula goes like this:

how much does luxury marketing cost

So let’s calculate a basic example for a luxury travel funnel, you can do the same thing at home. Let’s assume that your investment to build everything for an initial test (assuming you have a solid strategy in place and you know what you’re doing) is around 10 000 USD and you want to spend 15 000 USD on media to generate traffic for the funnel.

So your project costs (25 000 USD) have to be smaller or equal to your return on your investment (your profit).

25 000 USD <= ROI

Let‘s assume that after a three month test campaign you have generated 100 leads. Of these 100 leads, 50 leads qualify and turn into sales for an average value of 6000 USD per luxury travel package sold.  The revenue from these 50 sales is 300 000 USD, while your profit margin per sale is 10%. Which means you have made 30 000 USD profit! After subtracting the cost of the project you arrive at:

25 000 USD (Investment + Media) <= 30 000 USD (ROI)

You now have 5000 USD to re-invest back into the funnel, the business or take home as “pure” profit.

In this situation you can basically scale the funnel up because you have found a mathematical marketing mechanism that works and supports your business. So this is what a solid luxury direct marketing test should cost you. Feel free to do those  funnel calculations couple of times for different type of luxury travel services you have.

how much does luxury marketing cost

Are You Ready?


Still not sure if you can afford this? As a basic rule of thumb, if you can’t afford to spend 8-15% of your annual revenue on marketing and if your annual revenue is not even in the medium to high six figure range yet, forget about specialized luxury marketing. Try some cost-effective Google or Facebook Ads instead (but do a course or read first about how to do those, since it is easy to waste your money with algorithms), go to some local luxury events, sign up with an OTA, do some do-it-yourself SEO, pick up the phone or try to leverage your existing network to find your first customers.

But be ready to accept that until you take control and build your own paid luxury funnel, you will always be at the whim of tech companies, it will be extremely time intensive to generate business and you WILL encounter a lot of tire-kickers who simply cannot afford what you are selling (we’ve all been there). After all, good luxury marketing costs more money than basic, cookie-cutter digital marketing for a reason, you are trying to sell to millionaires or even billionaires here, remember that the next time you decide it is time to do some “marketing”.

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