• by Karlene Lukovitz  @KLmarketdaily, May 9, 2008

Even hip-hoppers have to age, and the demographics of this much-wooed market are indeed starting to shift, according to a new report, "The Young Urban Consumer Market in the U.S.," from the Packaged Facts division of Marketresearch.com.

The size of the overall young, urban consumer (i.e., hip-hop) population--about 36.8 million as of 2007--will not change significantly by 2012, according to PF's estimates. However, the oldest, the 25- to-34-year-old segment within the group, is growing the fastest.

Currently, 12- to-17-year-olds represent the largest segment (13 million), but 25- to-34-year-olds are close behind (12.1 million), followed by 18- to-24-year-olds (11.6 million). But the youngest group is expected to actually decline by 4.2% over the next five years, and the middle group is projected to grow just 2%. Meanwhile, the "older" hip-hoppers will increase by nearly 5%, to reach 12.7 million.

This is by no means bad news for marketers, since the oldest group's higher earning power gives them substantially more purchasing power than their younger counterparts.

Even now, the oldsters account for two-thirds of the overall young urban market's aggregate income, and their aggregate income is expected to jump by 17%--from $402 billion to $468 billion--by 2012. The youngest group's income will rise 7%, to $45 billion, and the 18- to-24-year-olds' will grow 14%, to $171 billion.

Hip-hop seniors are more likely than their younger counterparts to be employed in management and professional jobs, and are as likely as others their age to have a college degree (35.3% versus 35.1% for the age group as a whole).

The overall population of hip-hoppers/young urbans--defined as those who choose hip-hop music as a favorite music type in the Simmons Consumer Surveys of adults and teens--is not growing because ties to the music and culture tend to loosen as teens grow into adults. Whereas 52% of all teens are young urban consumers, only 40% of 18- to-24-year-olds fall into the category. (PF notes that African-Americans are more likely to stay tied to the culture as they age: Two out of three African-Americans within the 25- to-34-year-old age group are young urban consumers.)

Further, young urbans at the older end of the scale share the attributes that make marketers salivate over this overall relatively young segment of the population: Unusually high brand loyalty; a penchant for spending their money now on goods ranging from electronics to cars, rather than saving; and an unusually strong influence on product and fashion trends within the broader marketplace.

And the golden key to hip-hoppers' hearts remains the same, whatever the shift in age pattern within the group: authenticity.

Product placement works well on this group, but it better be credible. PF points out that the brands that have benefited most from hooking up with hip-hop artists are those that have been prominently featured in lyrics without the complicity of the brand (Courvoisier sales leapt after Busta Rhymes wrote a rap song about the French cognac); or are apparently spontaneously embraced by hip-hoppers (the Cadillac Escalade); or were apparently used by the artist prior to his or her becoming a brand spokesperson.

The prime example of this last scenario was 50 Cent not only becoming a spokesperson for Glaceau Vitaminwater and getting his own label within the brand, Formula 50, but buying into the company and reportedly getting $400 million when it was acquired by Coca-Cola for $4.1 billion in May 2007.

"The only boundary the artists and advertisers are looking for is that it feels authentic and not scripted," a McCann-Erickson exec told BusinessWeek in 2005, back when hip-hop marketing was just beginning to become a major phenomenon. And with hip-hop spokesperson deals and product placements if anything more numerous and sought-after than ever, that observation stands.