of consumer purchase behavior, the introduction of cable television into American homes in the 1980s pushed marketing still further away from talking to a large homogeneous audience toward more divided and differentiated niches. Three broadcast networks morphed into dozens, and within a decade there were hundreds of television networks. Today the average American home has 189 channels to choose from, and each of us typically watches 17 different channels—more than five times what we watched in the 1980s.27 Each of these cable networks appeals to discrete viewing tastes and lifestyles. There is MTV for teenagers and young adults, ESPN for men, and CNN for the news junky who was also likely a reader of Time or Newsweek. There are channels that appeal to women and ones that are devoted to kids. As time progressed and digital technology enabled cable systems to expand, there were channels not just for sports, but for single sports like tennis or golf, and even for individual sports teams like the Yankees and the Boston Red Sox.
These target audiences correspond to groups that advertisers are interested in reaching based on demographic characteristics (such as age, gender, income, education, and so on) or based on psychographics, which define people in terms of values, lifestyles, and personalities. For instance, a psychographic group called “Movers & Shakers” are adults between forty-five and sixty-four who shop at Nordstrom, play tennis, and drive a Land Rover while “Shotguns & Pickups” are adults between twenty-five and forty-four who order from Mary Kay, own their own horses, and drive a Dodge Ram Diesel.28 Sorting the population in this way is known as segmentation, and it is used to fragment the marketplace into groups that will be most interested in a company’s product. Once an advertiser has identified the audience segments that will be interested in their products, they become “the target audience” for the brand. So iPads might appeal to moms who want to use the tablet to find new twenty-minute recipes or to read books to their kids or to find apps that will help juggle their busy schedules. These tablets are also popular with businesspeople who want a streamlined piece of technology, particularly when they are traveling. They might also be of interest to older adults who want to connect with their grandchildren via Skype or FaceTime, or even to use the tablet to play virtual games with them. Moms and businesspeople and grandparents are different market segments. As a group, they (and many others, in the case of iPads) make up the target audience. Once the target audience is determined, marketers pick the appropriate media to reach these groups with their message. So if Apple wants to reach moms, they might put commercials on Nickelodeon, Grey’s Anatomy, and A Baby Story, as well as print ads in Parents magazine and Good Housekeeping; if they want to reach grandparents, they might put ads on the evening news or in the local newspaper or sponsor a program on PBS. What we will see later is that because of digital tracking, connecting content to target audiences has become superfluous, meaning that advertisers have no motivation to support programming with substance, only content that attracts the target audience of interest.
Today, when it comes to target audiences, marketers are most interested in the cohort known as Millennials. This young adult group accounts for $1.3 trillion in annual spending, according to the Boston Consulting Group, and that figure will grow as this generation continues to mature and more fully enter the job force.29 By 2015, there were more Millennials than baby boomers (83.1 million versus 75.4 million).30 Millennials are also the primary users of online technologies, and they are the Influencers that marketers want to reach who will help promote their products both online and off.
THE DEMOGRAPHIC THAT STILL MATTERS: MILLENNIALS
Marketers talk about an age of post-demographic consumerism. According to marketing research firm Trendwatching, “people—of all ages and in all markets—are constructing their own identities more freely than ever. As a result, consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income, family status and more.”31 To a certain extent that is true. Identities are more fluid. There are senior citizens interested in skateboarding, and in the UK there are more female than male video gamers, as well as more over forty-four than under eighteen. However, this idea misses the point. The Internet and its concomitant data will reduce—but not eliminate—the need to segment consumers in traditional ways. That is because while marketers need to get people to interact with them online, the way to get them there, for now, is mostly through traditional media. Because of this, marketers continue to categorize audiences by focusing on predictable life cycles. Those life stages—particularly the transition into adulthood—still and likely always will affect consumer purchases. Those transitioning now are part of a cohort known as Millennials.
Millennials—also known as Gen Y or Echo Boomers—are defined typically as those born between the early 1980s and the early 2000s.32 The Pew Research Center describes this generation as “relatively unattached to organized politics and religion, linked by social media, burdened by debt, distrustful of people, in no rush to marry—and optimistic about the future.”33 They have been widely maligned as entitled, coddled, lazy, self-centered, and digitally addicted.
Societally, they have grown up in a time of instant gratification, abundance, and on-demand products. I have seen this in my own home. My daughter is a Millennial, and when she was young I got a video of H.R. Pufnstuf from the library. It was a TV show I loved as a child, and I wanted to share it with her. At the end of the program, one of the actors points at the viewer and says, “See you next week.” It was then my daughter asked me, “Why wait until next week?” I had to explain that unlike her ability to watch SpongeBob whenever she wanted to, if I wanted to watch my favorite TV show, I could only watch it once a week, and I had to be sitting in front of the television at the one and only single time during the week when it was on. She was horrified. The idea that she would not be able to watch what she wanted when she wanted was completely alien to her, as it is for others of her generation. On a personal level, Millennials grew up with helicopter parenting, being told they were special, and almost never hearing the word “no.”34 Most importantly for advertisers, they are the “digital natives”—a generation that has grown up with digital technologies and who fluidly move between their online and offline lives.35
Millennials are the largest generational cohort, accounting for just over 24 percent of the U.S. population.36 In a wide-ranging research study, MTV found that their key concerns are getting a job, graduating college, and moving out of their parents’ house: really no different from previous generations in that regard. Where they differ, however, is that they are “later to launch”—that is, they tend to postpone adulthood (and marriage) for as long as possible.
No group this large, however, is homogeneous. To better understand their concerns, marketers break up this demographic into psychographic segments. Ypulse, a research company dedicated to understanding Millennials, created these five groups: Muted Millennials (live at home, risk-averse), Supremes (socially high achievers, most well educated of the groups, more than half are influenced by word of mouth), Moralistic Middle (old-fashioned values, thrill-shy), Alt Idealists (cause oriented, value individuality), and Beta Dogs (very passionate, networkers, most open to advertising, and driven by appearance).37 Interesting to note that two of the five groups (Supremes and Beta Dogs) are open to marketing and particularly to word of mouth. These segments are the Influencers that drive brand adoption by others.
They are a generation dripping in brand culture. Not only do they interact with brands, they spend time talking about brands and recommending them (or not!) to their friends and followers both online and off.38 Millennials, and in particular younger Millennials (ages eighteen to twenty-four), are more likely than boomers to say “people seek me for knowledge and brand opinion” (52 percent vs 35 percent), and to say that they are willing to share their brand preferences on social media (57 percent versus from 31 percent).39 According to MTV, a whopping 81 percent recommend brands to people by word of mouth, while research from Intel found that 74 percent believe they influence the purchase decisions of their peers.40 This makes sense, as this group is used to crowdsourcing information, so they value the opinion of many others when making decisions.41
