More On TV Audience Erosion

In a previous Video Insider post, I wrote that demographic changes in our population perhaps amplified, or were even mistaken for, cord-cutting data.  The crux of this was the decline in the 18-49 age audience for broadcasters. This is a critical audience metric that drives the approximately $70 billion television advertising market.  Traditionally, this is so because the 18-49 audience is considered to be the heaviest consumers and buyers of goods and services advertised on television.

In my earlier post, I suggested that as our population ages and the last of the baby boomers migrate out of this demographic, its overall size is not growing as fast as it did, and in fact the older of this demographic -- who are actually reaching their peak earning and spending years - is actually declining. 

One adjunct point that I left out of the original post was the question of whether 18-49 demographic actually mattered as much as we count on it to, or whether it was a vestige of some legacy limitation or consideration.

Surely as measurement technologies advance and we have better ad targeting capabilities for television, actual content viewing and response to advertising will outweigh the age metric. In another post on this topic in Gigaom, "Bad news for Nielsen: TV ads to be bought more like online ads," Ryan Lawler quotes Michael Hayes, president of Initiative Digital, suggesting that the 18-49 demographic does not matter because what matters is the buying behavior and intent, regardless of age and gender.  If we can measure this -- which is the goal with digital ads and IP enabled set top boxes - then the age demographic is irrelevant. 

I could not agree more with these statements. At the same time, even without getting to the highly measurable state of television advertising with new IP-based solutions, it seems that marketers and media buyers would have other important considerations given what we already know of aging demographics of our population. 

I don't claim to be a statistician or a sociologist.  I am a consumer of data rather than creator or aggregator of it, such as is done by analytics firms like Nielsen and comScore.  At the same time, as a marketer, I cannot help but point out another shift in consumer behavior that is noteworthy to marketers.  There is some truth in statements like "40 is the new 30," and "50 is the new 40."  People are living longer, healthier lives, and older people today live more like their much younger counterparts of before.  I suspect very little of this idea has been incorporated into the media buying considerations, given the 18-49 criterion has been static for some time. 

As IP connectivity continues to mushroom for TV playback devices, such as is happening in spades already, expect to see the media buying landscape shift as well.  How quickly this happens will be subject to the big blocks of consumer demand, content services, and device penetration coming into formation.  It will not happen overnight, but much faster than one would have predicted a few years ago, given the tectonic shifts already happening in the media industry.   

Tags: television, tv, video
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5 comments about "More On TV Audience Erosion ".
  1. Paula Lynn from Who Else Unlimited , August 19, 2011 at 3:55 p.m.

    Income and responsibilities would seem to be better measurements but that would require more privacy care. A 49 year old single person earning $40,000/yr without a large mortage and paid off loans is good potential auto purchaser. A
    49 year old with aging parents needing some help, 2 kids with an HH of $40,000 not so much. An 18 year old with a $40,000/yr income, not so many either.

  2. Philip Moore from Philip Moore , August 19, 2011 at 4:03 p.m.

    Nielsen = old paradigm of sampling and assumptions

    STB/Axciom/CRM matching = new paradigm of knowing what commercials are actually viewed by which households followed by actual purchases of my product. In the online world we have "pay per acquisition" pricing models. The same will soon be possible in television. As an advertiser, I only want to pay for the commercials that actually get viewed in the households that actually fit my customer target. When I tie these impressions to my transactional data, I can also measure the effectiveness of my creative executions. Brand impact should be reflected in lagged transactional data, otherwise what's the point.

  3. Stanford Crane from NewGuard Entertainment Corp , August 19, 2011 at 4:30 p.m.

    Networks seem to be targeting only middle-aged women, so from a male perspective, they aren't offering male fair anyway. Is that cord cutting? In a sense.

    In my view the networks, while striving to become "broadcasters" they are increasingly "narrowcasting" elements.

    Hats off to Fox for doing the UFC deal and acknowledging that men matter to the advertising community, a fact ESPN has long known.

  4. Rick Monihan from None , August 20, 2011 at 6:24 p.m.

    Philip, I think branding is still something you're missing here. You, personally, for your site, may only want acquisition - seeking those with intent.

    MOST advertisers are building a loyalty model that goes far beyond the acquisition. Your approach is very narrow, and in some respects may suit your particular needs (though I think it's shortsighted). As I see it, branding is the key to advertising. Elsewhere, in an article related to DR, I'd mentioned that DR completely ignores the value of branding - it pays a very low price geared toward "response". This is a very good model, but shortchanges the broadcaster/publisher. Why? Because the long term value, beyond just the initial response, is recognition of name and valuing it in some way.

    Ronco is a well known name, for better or worse, and it got that way because of a DR (low cost) model. But DR is a dicey prospect, because you only get to air in poor time slots, or during seasons with low demand for branding. As a result, you miss out on the "primary" air slots which give the biggest bang for the buck.

    Ronco is well known primarily due to longevity. When they first came out, they were unknown. It took many years for it to become recognized. But a few key airtimes in the right place will get almost any brand lots of recognition in short order.

    I don't see the current model of buying changing dramatically anytime soon. In fact, I think the online model is going to shift more toward TV rather than vice-versa. It's easier to dovetail data, and as much as we'd like to believe that online is "more precise" than TV, it isn't. Perhaps a bit more accurate....but only just and only in certain situations.

  5. Sam Vasisht from Independent , August 21, 2011 at 6:31 a.m.

    @Richard, @Philip - I think you both have valid points. Thanks. The way I see it is that at the end of the day we want measurability in advertising. The question is what are you measuring and how. The premise of advertising is that it impacts the top line eventually. However, DR is a small portion of it, and in some cases may not be applicable, as Richard points out. At the same time 'lagged transactional data' is a powerful concept (I like that term!), but how do you measure it??! Technologies for that will continue to evolve.

    I think as we move to more IP connectivity, the things that are going to change quickly in TV advertising are targeting, particularly on the tethered 2nd screen experiences bringing us one step closer to the online world.