5 Key Demographic Trends
by Paula Andruss
Where’d John Doe go?
That’s what many marketers will be asking when the U.S. Census Bureau releases the results of its 2010 census this summer.
Be prepared to see some major demographic shifts, says demographic trends analyst Peter Francese, chief among them the absence of the “average American.”
Francese, who consults for advertising agency Ogilvy & Mather, recently authored 2010 America, a report commissioned by Advertising Age that highlights some significant population changes the census will reveal.
Here are five things he says marketers need to know about today’s consumer:
1. There’s no longer an “average American.”
When I was a child, people used to talk about John Doe: He was the “average American” in a relatively even society where vast numbers of people had the same sort of needs for consumer products and services. There was a significant uniformity of society that has really never been matched.
But I can predict with a high degree of certainty that the 2010 census will essentially put the last nail in the coffin of the “average American,” because he or she no longer exists.
2. We’re now a multisegmented nation and a multigenerational society.
In our 10 largest cities and four states — California, Texas, New Mexico and Hawaii — no race or ethnicity is a majority of the population anymore. The 2010 census form instructions were available in 65 languages. That gives you an idea of just how pervasive this concept is.
And it’s not just ethnic segments. Twenty-five years ago, two-thirds of all households were married couples. The 2010 census will show that for the first time in American history, married couples will be a minority of U.S. households. It’s a stunning difference from the 1950s and ’60s when virtually all marketing was focused on married couples, particularly married couples with children. Now, married couples with children make up fewer than 21 percent of all households — or roughly one out of every five.
Also, the number of people who live alone is growing very rapidly; they’re now more than 27 percent of households.
The third dimension of complexity is that we are becoming a multigenerational society. The 2010 census will probably find somewhere in the vicinity of 10 million multigenerational households, in which there’s at least one grandparent living with his or her adult children and those adult children’s children. Multigenerational households and a multigenerational America means that older people (in their late 50s, 60s and 70s) have a bigger impact on what their children and grandchildren are doing and buying.
3. The multicultural shift is driven by immigration.
It’s also driven by the fact that the non-minority part of the population — white non-Hispanics — is aging very rapidly. Of all births in the United States in past decades, well over two-thirds were white non-Hispanics, since they were the vast majority of the population back then.
But today, only about half of the more than 4 million births nationwide are white non-Hispanics. So a higher proportion of the younger population — the children and young adults — are African-American, Hispanic, Asian or multiracial. As the older population ages and more of them pass on, the younger generation becomes a greater share of the total population. Young adults and children are quite diverse, whereas older people are not. Eighty percent of Americans over the age of 65 are white non-Hispanic, but that’s true of less than 60 percent of children.
4. Don’t treat each generation or age segment as independent entities.
It’s essential to address the multidimensional nature of our society today, and more important than ever to know more precisely who your customers are. In-depth interviews and surveys are vital tools for more effective direct marketing. We can’t assume that just because somebody is 60 or 70 years old that all they’re going to want is a hearing aid or health insurance, and there’s no point in marketing anything else to him. That’s a huge mistake. Then, just like with any other direct marketing program, the key to success is testing, testing and testing some more.
5. Direct mail will continue to play a crucial role.
Direct mail reaches people in their home and it offers something in writing, in their own language, that is of specific interest. It’s the ideal way to really target a specific part of a population that has a need that is unique for that group.
If you send a catalog of toys where some of the descriptions are in Spanish, and you know that you’re mailing to Hispanic households that have more children than non-Hispanic households, you’re going to get a greater response than if you try to advertise on cable television because you really have no idea what cable channel they’re watching. The cost per sale is much lower when you can reach these specific households with a targeted, written message.
Similarly, when you’re trying to reach a small market segment like married couples with kids, broadcast media is pretty inefficient because married couples with kids can be different ages. That makes it difficult to reach all of them, but with direct mail you target them at home.
If you have a product or service that you think would be valuable to single people, I can’t think of a better way to reach them than through the mail. If they live alone there’s obviously nobody else who’s going to open the mail except for them, so you reach them directly.
Twenty years ago, most direct mail marketers said they only wanted the 18–49 demographic, which was considered the young households with money to spend. That concept no longer holds. Older Americans, many of whom now are grandparents, are spending some serious money on their grandchildren. This group is more stable; they stay at the same address for longer periods of time than young people do, and they open their mail. They might surf the web and e-mail their grandchildren, but they’re still print-oriented.
In all of these groups, thinking of direct mail as a primary means of communication within your specific and detailed set of customers, and giving it the priority it deserves, can be very successful.
Read the full article at Deliver Magazine: http://www.delivermagazine.com/2011/02/5-key-demographic-trends/