March 10, 2008 11:00 ET

Luxury Institute WealthSurvey: Wealthy Consumer Membership in Online Social Networks Reaches 60%

NEW YORK, NY--(Marketwire - March 10, 2008) - Wealthy consumer participation in online social networks dramatically increased to 60% in 2008, from 27% in 2007, according to The Luxury Institute's latest WealthSurvey "The Wealthy and Web 2.0." Participation levels in leading social networks are: 16% for MySpace, 13% for LinkedIn, and 11% for Facebook. The wealthy average membership in 2.8 social networks, with an average of 110 connections.

"Being connected is second nature to these over-achievers," said Milton Pedraza, CEO of the Luxury Institute. "We are pleasantly surprised at the rapid acceleration in the over 55-year-old wealthy consumers whose participation increased five-fold, to 49%. The implications for luxury goods and services firms are profound. While some in the luxury industry are still debating e-commerce, search and banner ads, the majority of their customers have leaped into the online dialogue. Luxury needs to catch up quickly."

Results indicate that online communities will continue to fragment into increasingly selective and specialized entities of like-minded members. This should make it easier to reach target markets, but luxury firms should avoid critical mistakes. "The wealthy have a great deal to lose," said Pedraza. "They will not tolerate behaviors exhibited recently by social networks that force opt-out techniques on member's private purchase information, and make it difficult to exit." Sixty-five percent of wealthy consumers say that giving out personal data without permission will cause them to disconnect; 63% have an interest in "do not track" lists.

The dramatic rise in wealthy participation in online communities points to another great opportunity for luxury marketers, who can create their own online customer and prospect communities and engage people in a rich honest dialogue. "Luxury providers should already be in the testing and experimentation stages of online prospects, customers, employees and other constituents. The era of transparency and co-creation in luxury is well under way," added Pedraza.

Methodology

A national sample of 805 wealthy American consumers, with an average income of $287K and average net worth of $2.1 million, was surveyed online. Survey results are weighted to match demographic and net worth profiles of the same audience according to the latest Survey of Consumer Finances from The Federal Reserve.

This latest WealthSurvey, plus ten best practices surveys per year, a database of dozens of other consumer surveys, the Wealth Report newsletter, plus select networking with trusted qualified peers, are all available to members of the Luxury Board (www.luxuryboard.com), an online community for Luxury Professionals who wish to learn how best serve luxury consumers, for only $995.00 per year.

About the Luxury Institute

The Luxury Institute is the uniquely independent and impartial ratings and research institution that is the trusted and respected voice of the high net-worth consumer. The Institute provides a portfolio of proprietary publications, research and courses that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net-worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the Luxury Board (www.LuxuryBoard.com), the world's first global, membership-based online community for luxury goods and services executives, professionals and entrepreneurs. To reach the Luxury Institute, please call 646-792-2669 or go to www.LuxuryInstitute.com.