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IN THE NEWS: Consumer Research & Advertising

Overall Advertising and Media Economy

Digital Ads to Overtake Traditional Ads in U.S. Local Markets by 2018 (Advertising Age; Oct 26, 2016)

The media research and analysis firm BIA/Kelsey forecasts that total local advertising revenue (local audiences for national, regional marketers) is expected to grow from $145.2 billion in 2016 to $148.8 billion in 2017. Digital advertising, for the first time, will equal TV ad sales for the first time this year (both generating about $68 billion) – increasing by 15% in 2016 and by 12% next year. Traditional media sales will decrease by about -1.5% in 2016, and by -2.2% in 2017. Although digital media as a share of advertising is expanding rapidly, traditional platforms (especially TV) will remain crucial components of the media mix for their broad reach and targeting capabilities.

TV Ad Spending Slips in September; Overall Media Spend Higher (Television News Daily; Oct 21, 2016)

The U.S. ad market expanded only slightly in September, although that nonetheless represented significant growth coming out of August – a month that included notched-up spending by brands advertising in the 2016 Summer Olympics. (Spending figures come from Standard Media Index, which compiles media dollar outlays from about 80% of all U.S. agencies.) Among the most noteworthy gains for September, were digital media: social media and online video were up dramatically over August, by 72% and 32% respectively. Linear TV was down slightly overall (-1%), as was national broadcast overall (-6%), following Rio Games’ coverage. National Spot and Syndication were flat. Conversely however, Local Spot and Cable were up 24% due to heavy political spending. Outdoor advertising also ticked up 10%. The biggest losers, as is generally the trend, were magazines (down 13%) and Newspapers (down 28%).

Consumer Demographics and Psychographics

Generation Z: Understanding the Youngest Demographic (Independent Retailer; Oct 18, 2016)

Generation Z (those born in 1996 or later) will soon be becoming part of the adult economy – and currently comprise 25% of the U.S. population (75.4 million in number), larger than both the Millennial and Baby Boomer generations (66 million and 74.9 million by comparison respectively. Although few earn their own money, their spending clout has already reached $4 billion dollars. One of the most interesting arenas in which this group is typified, is mobile-social. The “iGen” spends much more time on smartphones than any other device, and social media is more important for this generation than any other. They favor companies who communicate with them authentically, build them up emotionally, and speak with them rather than at them. Interestingly, Gen Z’ers are aware of their personal brand, having seen Gen Y’ers suffer the consequences of overly open social posting. Although they, unlike Millennials and Gen-X’ers, are cautious about posting photos, making comments, and sharing links, they are most effectively engaged with visual messages. However, they prefer more curated and/or more anonymous arenas like Snapchat (their favorite platform), Whisper and others. 93% visit YouTube at least daily. Like the Silent Generation, Generation Z was also born in trying economic times and fluid social situations. The iGen is characteristically hard- working and risk-averse, and seem on track to become the next wealthy generation.

What Advertisers Need to Know About Millennials in 2016 (American Marketing Association; Oct, 2016)

Millennials, who as a group are coming into increasingly sharper focus on social media, continue to exhibit characteristics of interest to marketers. One of the most pronounced is their declining commitment to brands. According to Mindshare North America’s latest annual Culture Vulture Trends survey of 2,000 millennial consumers, 58% (up 13% from the prior year) prefer products that are unique (rather than mass- produced), that are sharable and that exhibit elements of social consciousness. Gone are the days, at least with millennials, when one identified long-term with a single brand. 67% of commitment-phobic millennials feel being “trapped” and “annoyed” by ongoing service contracts.” In general, millennial consumers seem to care less about “stuff.” When asked “what best represents who you are?” Answers included: “What I post on social media” (47%), “my fashion style” (30%), etc. Far fewer identifies “the car I drive (11%), “the smartphone I use (8%), “the brand of sneaker I wear” (3%), or “the brand of alcohol I drink” (3%), etc. Mindshare asserts that there is a substantial opportunity for brands to show how the brand can help millennial consumers tell (and share socially) stories about themselves.

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