Market Focus: Military Personnel
The military market may be the biggest consumer opportunity you never heard about. But increasingly, marketers are homing in on this enormously lucrative segment of the population. Although they are dispersed worldwide, members of the military share unique points of affinity that make them prime targets for shrewd marketers.
"These people shop at a common grocery store and department store system, and because they shop at places where prices are generally 20% to 30% off, they tend to buy more," says David Smith, vice president, marketing and business development at Military Times publications. A subsidiary of Gannett Co. Inc., the company publishes a variety of specialized titles targeting the military, including the Army Times.
A market of 7.3 million active duty personnel, dependents, reservists, civilian employees, and retirees, with an annual payroll exceeding $90 billion, this group racked up $9 billion in net sales at exchanges and commissaries in 2000. Contrary to popular belief, military personnel make pretty good money. Average pay and allowances for enlisted members totals about $34,000 a year; the median income for all U.S. citizens with a high school diploma is about $24,500. The disparity for military officers is even greater. They pull down an average $87,000 in pay and allowances annually, compared to about $41,000 for all U.S. citizens with a bachelor's degree. "And the beautiful thing is, these people are fully employed. Not a single person in this group doesn't have an income," Smith says.
Additionally, the military population is young - three quarters is under age 34 - and educated - 96% are high school grads and 45% have attended college. They also reflect a diversity of the population - 66% are white, 20% are black and 8% are Hispanic - making them an ideal target for broad based products. They get a lot of time off, too. Military families took more than 1 million skiing trips in 2000. Because they move frequently, they tend to make fine targets for moving companies and consulting services.
Major marketers to military consumers include Dell Computer Corp., GEICO Insurance, USAA, and the Pentagon Federal Credit Union. Despite its potential size, however, the military market has yet to be fully embraced by Madison Avenue.
"It's an invisible market that is disregarded by a lot of Madison Avenue types. They just don't get it," Smith asserts. He cites the example of one potential advertiser, a cell phone manufacturer, that wanted to develop an employment campaign to recruit newly discharged veterans. The tag line for the campaign: "It's better than flipping burgers."
"It was insulting, but typical for the advertising disconnect with this market," Smith says.
Attacking the military market
For those advertisers who do "get it," the opportunities to reach this market are fairly straightforward. Largely isolated from general market media, military personnel consume a variety of specialized publications. Each base, for example, has its own "official" newspaper, sanctioned by the Department of Defense. Many bases also have what are known as "gypsy" papers, unofficial publications that provide an alternative voice. Military Times publishes a separate title for each service branch, each of which carries advertising.
Market Place Media of Santa Barbara, Calif., specializes in placing advertising in military publications and arranging promotional tours on military bases. Its more successful vehicles include sponsored movie screenings at base theaters and in-store radio ads at commissaries and exchanges.
"If you decide that the military is an important market, then these vehicles enable you to zero right in," says Tammy Nelson, director of marketing and technology at Alloy, Inc., parent of Market Place Media.
Before new recruits arrive at their assigned base, they may be presented with an officially sanctioned newcomer's directory or a military yellow pages guide that carries ads for local businesses. "There is only one way to reach these people before they get to the base, and that is through these publications," says Mark Stoia, president of United Publishers Inc. in Ft. Walton Beach, Fla. The company publishes base-specific guides for a number of domestic military venues.
Dos and don'ts
There are some restrictions on ad placement and content aimed at military personnel. Ads placed in military papers and broadcast facilities must be cleared through the base public affairs office. Those deemed to be too racy or suggestive may be rejected, as may messages with references to sex or excessive use of alcohol. Several bases have also nixed ads promoting debt consolidation services.
Product sampling promotions are more difficult on military bases, where civilian access is restricted. These promotions must be approved and must usually tie in with an event that is already taking place.
While the current overseas deployment of soldiers, sailors, and Marines to the Middle East may disrupt domestic life, it will not diminish marketing opportunities, experts say.
"There are more dependents in the military community than there are active-duty personnel. Those families are still on base reading the publications, consuming media, and buying products and services," Nelson says. Official publications may also be shipped in quantity to deployed personnel, so they still get some exposure to the ads.
Internet advertising may prove to be an effective method to reach those in the military, more than 90% of whom have Internet access. Studies show that nearly half of the military community spends at least an hour a day online. Two thirds made an Internet purchase last year.
While the active military provides a rich target audience, discharged and retiring veterans present special opportunities as well. They are highly recruited by a variety of post-service employers, and they tend to return home with money in the bank.