Friday, June 03, 2011

ADVERTISING TO THE POOR

"Talkin' 'bout my g-g-g-generation"
-The Who

Advertising has, for decades, worked under the presumption that the 18-49 age market dominates purchasing power and drives culture, so they are the primary targets of most ad campaigns. Sure, you don't see ads for adult diapers aimed at young people, but that's a niche market. Anything more general and broad tends to be targeted at the college age people in America.

This has been the consensus view of marketing for a long time now, and it never has made any sense to me. I remember being 18-25, and I never had much money. I remember well being in college and almost no one had any money. We drove beaters and ate fried Spam because it's all we could afford, not because it was hip and trendy.

Ben Shapiro's new book Primetime Propaganda: The True Hollywood Story of How the Left Took Over Your TV is getting a lot of attention lately because it has a lot to say about entertainment bias and media politics, but what caught my eye was in an interview by John Hawkins at Right Wing News with Shapiro where he said this:
In Hollywood, the only rating that really matters is the 18-49 demographic. The 18-49 demographic and really, the 18-34 demographic, is considered more valuable than older demographics. So you’ll see shows like Glee that actually make more ad dollars than shows like NCIS because the conservative shows appeal to older audiences.

Well I found out, this is the really fascinating part — this was a concerted scam on the part of the TV industry. This was not something that happened by accident.
...
ABC only had affiliates in the big markets. It had no affiliates in any of the rural markets. CBS had affiliates everywhere. It had rural, it had urban — it was kicking the crap out of ABC on a daily basis. The top shows in the country were shows like Beverly Hillbillies, Green Acres, Petticoat Junction…. They were for what people in Hollywood derisively called “rural trash.”

What happened is that ABC... hire[d] a guy to do a study for them that says that the young, urban crowd is actually worth more than the older crowd. So even if CBS is drawing bigger numbers by far, our audience is more valuable than their audience to you. …So they go to the advertising agencies with that. The advertising agencies which are generally staffed by people who happen to be young and urban say, “Well, of course I’m worth more than the schmuck who lives on the farm in Alabama.”
So advertisers focused on younger, more urban viewers and spent their money heavily on that age range and on shows that appealed to that age group. They've been doing so ever since, and its a mistake.

18-25 or so young people don't have a lot of cash. That's the segment of the population hardest hit by unemployment, with numbers reaching to almost 20%, and when workers who have abandoned a job search the numbers climb much higher. Even though they have a higher percentage of cash as disposable income, they have less overall money to begin with.

As you move up in the age groups, people tend to be married, own more high-expense items, and have children to pay for, which means that as they begin to earn more in their careers, they have less disposable income.

That in its self isn't such a problem, since disposable income is defined as income which you have in excess of expenses such as bills and food. Advertising is, by its nature, an attempt to get you to buy things, but most advertising is about prompting people to buy your product, not just any product.

In other words, most advertising is targeted at non-disposable income, its about trying to get people to spend the money they have to on your product. So while some ads are for luxuries and extras (say, a movie), much of it is targeted at the expenses ordinary people have: shop here for your groceries, buy this car, come to our store for that replacement washing machine.

So disposable income isn't really much of an issue for many advertisers, and being young and having fewer bills only really appeals to luxury advertising like beer companies.

Yet the people who have both the most disposable income and the greatest overall income tend to be people in the 40-60 year old range. By this age, most people have become established in their chosen profession, have the greatest earning power and hence money, and their children are growing up to the point they aren't as dependent on parents' income. When the kids leave the house (roughly 50+ years old), then that significant expense is gone.

In other words, this focus on the 18-49 demographic is missing the boat; and advertisers actually tend to focus most heavily at the younger age as well; roughly 18-30. Those age ranges are not really your best target if you are looking for people with money.

Ben Shaprio points out that younger people tend to be more left-leaning and hence the shows appeal more to this, but there's another aspect at play here. Culture is largely driven by entertainment in the United States, and when entertainment targets a younger audience, that means younger ideals and entertainment shapes culture. So the culture becomes more youth-oriented as well as left-leaning, by design.

And advertisers are helping this by buying into studies which purport that younger people have more money to spend and are better targets for ads. Even if that were true, increasingly the bulk of the US population is growing older, past 50 at this point, as the boomers age. So advertising to young people makes less and less sense. And crafting every ad to appeal to either frat boys or the girls that have to put up with them makes even less sense.

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