Tag Archives: Millennials

Millennials vs. Baby Boomers

31The radio world was all a buzz this week when it was announced that Millennials now out-number Baby Boomers.

Well la-te-da.

Let me tell you why that doesn’t really matter.

William Francis Sutton’s Advice to Radio Operators & Advertisers

Sutton was famous for making money, lots of money. Actually, he didn’t really make money as much as he stole money. Sutton stole an estimated $2 Million over his forty year career. And while he denies he originated it, Sutton’s Law states that when diagnosing, one should first consider the obvious. So when Willie Sutton was asked by a reporter why he robbed banks all his life, he replied “because that’s where the money is.”

Boomers Are Where the Money Is

When the Boomers were growing up, rates of productivity and hourly compensation rose in lock-step. Productivity rose 96.7% and hourly compensation rose 91.3%. That changed in 1973. While productivity continued its upward slope, compensation flat-lined; productivity was rising around 75% in the period of 1973 to 2013, wages went up a mere 9%.

Worse, today a college education not only doesn’t guarantee increased earnings, it is more like an economic boat anchor that saddles a Millennial with student loan debt of tens of thousands of dollars as they begin to enter the workforce. Paul Campos wrote in the New York Times that “if over the past three decades car prices had gone up as fast as tuition; the average car would cost more than $80,000.”

Unlike us Baby Boomers, Millennials have come of age at the very moment when economic opportunities are few and far between.

Trading Places in Income

Trading places: The income of younger working-aged families was falling long before the Great Recession and has now been surpassed by the rising incomes of families well into retirement age. (Median Income for Younger and Older Families in Inflation- Adjusted Dollars)

 

Stagnant Income

The average middle-class family today makes the same household income as it did thirty-six years ago. The problem is that today’s heads of household weren’t even born yet. We’re talking about different people. So the advantage of a middle-class family today over one three decades ago has evaporated. That’s if they can even be considered “middle-class” as 61% of Americans considered “middle-class” in 1971 comprise less than 50% of those families today.

Vastly Different Economic Trajectories

In the more recent economic history of America, each new generation would far surpass that of their parents’ in material standard of living. Millennials, and Generation X’ers who came before them, “are falling farther and farther behind their parents’ generation in most measures of economic well-being.” This represents a change being experienced by today’s living generations that is unprecedented in America’s history.

Millennials Number 75.4 Million vs. Baby Boomers at 74.9 Million

Here’s why radio and advertisers shouldn’t be freaking out over the headline that Millennials now out-number Baby Boomers. There may be more of them, but when it comes to discretionary income – the money that buys stuff – Boomers are still your “bank.” Don’t take your eye off the ball.

If Willie Sutton were operating a media company or an advertising agency, he’d be focused on putting his marketing investment where the best R.O.I. (Return On Investment) is, radio and its #1 reach that delivers 93% of Americans every week. It’s the traditional mass media that Boomers grew up with and still use in great numbers. Radio still delivers.

The “Music of YOUR Life” is Now The Rolling Stones

Back in the 1980s, I managed one of the first Al Ham “Music of YOUR Life” radio stations. Next to Rush Limbaugh, this big band based music format was one of two formats that were attracting people back to AM radio. I remember joking that one day, when we Boomers were their age, the music of our life would replace the sounds of Tommy Dorsey and Glenn Miller.

That day is here!

And there’s money to be made.

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Radio – America’s #1 Mass Reach Medium

radio-reaches-245-million-americans-2015-2This was certainly true in the first golden age of radio, that period of time from its birth in 1920 through the mass takeover of television in the 1950s. Once TV came along, radio had to reinvent itself.

 

That reinvention came in the form of Rock ‘N’ Roll, the transistor radio and the car radio. Radio was portable, TV was not. TV took over the living room, but radio took over every other place.

 

In my life, I’ve lived through every new form of technology that was going to be the death of radio. The 8-track tape, the cassette tape, the CB radio, the CD player, the CD changer, the cell phone, the MP3 player, and most recently, the World Wide Web, Internet streaming and wireless broadband.

 

So you might be surprised to learn that at the 2015 annual meeting of the Association of National Advertisers Masters of Marketing Conference in Orlando, Florida attendees learned that when it comes to adults 18+, RADIO reaches 93% of them every week. That’s more than TV, more than smart phones, more than PCs and more than tablets.

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I remember when I got my first GM position. It was a daytime radio station that featured Al Ham’s “Music of YOUR Life” format, big band music for those not familiar with the programming. Yes, my audience was old. But only according to the calendar, but not the way they thought about themselves. Nampa and his corvette

It was always a tough putt with new advertisers, getting across this concept that you are as young as you think. So I wasn’t surprised to learn that one of the sessions talked about “APT.” APT was all about the “Age People Think” not demographics.

 

I’m not sure that lumping people by demographics was ever a sound marketing idea, but like a lot of bad ideas (buying radio on a Cost Per Point basis) in advertising, people do what’s always been done and ignore if it’s a sound way to place advertising.

 

A lot of my radio stations over my career have focused on an older demo. When Ken Dychtwald’s book “Age Wave” came out in 1990, I read it with enthusiasm. Dychtwald told of the massive population and cultural shifts that would be taking place because of the Baby Boom Generation. He put forward how the boomers would shift the epicenter of consumer activity from a focus on youth to the needs, challenges, and aspirations of maturing consumers. Those predictions are playing out today.

 

So again, I wasn’t surprised to read that at the ANA gathering attendees were told that old people were a growth market. In light of the trillion dollars in student loan debt, the millennials are cash challenged in a way that the Boomers are not.

 

I grew up in a Chevy family. Remember those days of yore? Chevy families and Ford families competing for bragging rights as to which drove the better cars?

 

Many marketers would have you believe that we are now stuck in a rut with our product choices and only the young are pliable enough to be swayed to try or change brands. So let’s see how that plays out in my family. I have two older brothers; one drives a Honda and the other a Toyota. How about our kids? Well we have a BMW, Mercedes Benz, Hyundai and Honda. In my case, I drove a Hyundai for the past eight years before switching to a Honda Accord; so much for that concept that once you are stuck in a brand, you stay there for life. Even my toothpaste is not the brand I grew up using.

 

Everything has changed about the world with the exception the way marketing is created and advertising is bought.

 

One of the big changes is that RADIO is back! It’s the massive reach medium that advertisers seek to expose their products and services on, except that they don’t know it.

 

Radio needs to use some frequency and repetition to get the word out.

 

Willie Sutton said he robbed banks because that’s where the money was.

 

If you’re an advertiser, you need to advertise where the people are and that’s today’s RADIO.

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