In the reports from the NAB show an interesting topic popped up from large agency director Sumeet Kanwar at OMD who notes that 'his media buyers spend millions with radio, but when it comes to measurement they are not getting what they need.' Sumeet when on to elaborate that 'there is a need to develop more finite demographics, rather than expecting clients to buy a demo like Women 18-49,'
Sumeet couldn't be more correct. For the last 35 years we have really lived mostly in one demo - 25-54 adults. Yes, the last 15 years or so we have seen a rise in 18-49 but face it - we mostly celebrate the 25-54 numbers. For 35 years we've had the same perspective on the audience. When we started to build this demo it was the early 80s and the Baby Boomers (1945-65) were in the core of this demo for most of the decade. The first Boomers turned 30 in 1975 and 20 years later in 1995 the last of the Boomers turned 30.
Now the Boomers are all over 50. In just a few years all the Boomers will be over 55 and out of the demo completely. This demo became THE important demographic because it was centered around the Boomers who were the largest demo group in the population and marketing to them as they built their lives and spent their dollars has no doubt built the economy we have today. But, they have earned their highest incomes and spent at their highest levels. It's a new reality and we've sat in one chair looking out the same window for 35 years. Recently the 18-49 Demo has seen more 'action' in radio but even there this is a very wide group of people with very different life needs and a lot of the 18-49 demo overlaps with 25-54.
Sumeet is right - it's time for a new view. So how should we divide up the Demographic Pie today?
The chart shows the 2010 Census populations by 5 year spans and I outlined the Boomers, Gen X and Millennial generations as they sit for 2014, and noted the updated ages.
For marketers right now these are 3 pretty different generations. They are all in different stages in their lives and offer many different challenges to marketing. The Boomers are now 55+ and in a very mature consumer state. Gen X is in their peak earning years and also their peak spending years with family expenses mounting up. The new Millennial Generation are nearly all out of high school on the young end and over half of them are approaching 30 years old.
We could divide it up in many ways:
Sumeet couldn't be more correct. For the last 35 years we have really lived mostly in one demo - 25-54 adults. Yes, the last 15 years or so we have seen a rise in 18-49 but face it - we mostly celebrate the 25-54 numbers. For 35 years we've had the same perspective on the audience. When we started to build this demo it was the early 80s and the Baby Boomers (1945-65) were in the core of this demo for most of the decade. The first Boomers turned 30 in 1975 and 20 years later in 1995 the last of the Boomers turned 30.
Now the Boomers are all over 50. In just a few years all the Boomers will be over 55 and out of the demo completely. This demo became THE important demographic because it was centered around the Boomers who were the largest demo group in the population and marketing to them as they built their lives and spent their dollars has no doubt built the economy we have today. But, they have earned their highest incomes and spent at their highest levels. It's a new reality and we've sat in one chair looking out the same window for 35 years. Recently the 18-49 Demo has seen more 'action' in radio but even there this is a very wide group of people with very different life needs and a lot of the 18-49 demo overlaps with 25-54.
Sumeet is right - it's time for a new view. So how should we divide up the Demographic Pie today?
The chart shows the 2010 Census populations by 5 year spans and I outlined the Boomers, Gen X and Millennial generations as they sit for 2014, and noted the updated ages.
For marketers right now these are 3 pretty different generations. They are all in different stages in their lives and offer many different challenges to marketing. The Boomers are now 55+ and in a very mature consumer state. Gen X is in their peak earning years and also their peak spending years with family expenses mounting up. The new Millennial Generation are nearly all out of high school on the young end and over half of them are approaching 30 years old.
We could divide it up in many ways:
- Make it a 3 way world - 50+, 30+ and 12-30 - You would be pretty close to lining up with the 'stages of maturity' of the whole population and also fairly close to the current Boomer/GenX/Millennial alignment. This would be a full change - we'd really be packaging the demos not by their population but more on their age and the consumer needs surrounding that stage of their maturity.
- Go for 2 broad groups that are tighter than what we have now and with a lot less overlap. Here you would have 20-44 and 45-70 spread. You are either looking at younger and older targets for your product.
- Set up our age data breakouts with Arbitron so we have combos of 5 year spans. You can pick 3+ combos and tailor the full presentation to the client. Build a 25-40 demo for products that are looking for new families with young kids in them. Build an 20-35 breakout for products aimed at younger singles or just married. Build 50-65 group for empty nest couples.
Sumeet is 'spot on' in pointing out the need here and this is going to take a full head on effort. Not only do we have to figure out new ways to divide up a moving target as the demos grow and age, but we also need to completely change a lot of our culture and radio product structure. Here's a starting list of 'things to do' to accomplish the task:
- Getting Arbitron to develop new breakout demos and systems in all the software,
- Teaching the sales teams to present a whole new package with either completely different demos or specific targets customized for the client's target - not our 25-54 break out.
- Programming will need to adjust it's targeting also. What is the most valuable target to dominate? It's a whole new question and maybe one that changes all the time.
For sure we are all going to need to be a lot more in tune with product target demographics, the generations and their characteristics within the population and be ready to overhaul our key demo rank and CPM business model.
Perhaps the NAB should be taking the lead here and take Sumeet's observations to the planning table.
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