SIGNALS

I recently blogged about Millennials, the demographic that is displacing Boomers at the top of the consumer food chain. I described how Millennial purchasing will increasingly define the audio/video markets and their preferences will increasingly define the nature of those products. Predicting the future is a dangerous game, but much like watching a bunny passing through a python, we can observe demographic bulges passing through the consumer market. Let's take a closer look at Millennials.

Companies love Millennials because the 18- to 35-year-olds in that age bracket tend to buy more stuff. And looking forward, as Boomers die out, the 75 million Millennials will take their place. For now, and into the future, companies want to target Millennials. Do you doubt the importance of Millennials? The analysis by advertising technology firm Turn estimates that advertisers are spending 500% more targeting Millennials than other age groups. More specifically, they spend four times as much on display, four times as much on social, four and a half times as much on mobile, and six times as much on video advertising targeting Millennials as they spend on all other age groups combined.

It would naive to view Millennials as a homogenous group; aside from kindred ages, they can be quite diverse. Thus Turn breaks down the demographic into four subsets based on income, lifestyle, entertainment interests, home ownership, and politics. This helps us to further understand buying interests. More specifically, this is how Turn describes the group, complete with catchy titles: Struggling Aspirationals (57%); Successful Homeowners (18%); Active Affluents (17%); and Comfortable TV Watchers (8%).

Of course, the groups are arbitrarily assigned and there is considerable overlap, but at least the groups let us more carefully consider how audio/video products might be marketed to them. Struggling Aspirationals, the lions share of the demographic, earn $49,999 and under. They look for deals and bargains but they are also attracted to brands attached to big-ticket items that can be used long-term.

Successful Homeowners are at the other end of the income scale, earning $100,000 and up. The second-biggest subgroup, they have the wherewithal to buy the best stuff. More than any other group, this one can follow in the footsteps of traditional high-end audio/video buyers.

Active Affluents are almost as numerous; they earn from $50,000 to $99,000. You'll see a lot of families here, and new parents. Research suggests that this group is the most active, so mobile gear is the best bet here, while home gear might be the worst.

Comfortable TV Watchers are in the minority, but still have a good income, also from $50,000 to $99,000. As the name implies, they are less outdoorsy, and more into cocooning (to borrow a term first applied to some Boomers). Home theater gear is a no-brainer for this group. Also, for whatever reason, the group tends to be more Republican than Democrat.

If we combine 18% Homeowners and 8% TV Watchers, we see that 26% of Millennials are prime candidates for traditional audio/video gear. Not great, but not dire either. Even if we write off the 17% Actives, we still have the 57% Aspirationals; they are the ones who will determine the future of the audio/video markets. Upfront money is a constraint for them, but any company that can unlock their audio/video aspirations with Apple-like brilliance will own the AV market.