Immigration and Migration Create Media Challenges and Marketing Opportunities

An Ad Age Stat Q&A With New Geography Executive Editor Joel Kotkin

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Earlier we spoke with Richard Florida about the economic value of megacities and urban spaces. Mr. Florida contends that urban areas like Washington/New York/Boston will conglomerate and merge into the regions which will drive economic growth, with the city centers leading the way. He argues for investment in cultural infrastructure to attract a young, vibrant, "creative" demographic. Contrasting that, Joel Kotkin, a professor at Chapman University and executive editor of newgeography.com, has studied the rise of the suburbs and the expected growth of the Great Plains region. In his latest book, "The Next Hundred Million: America in 2050," he sees great economic potential in the demographic shifts already underway. He chatted with us in New York to discuss the most important trends for marketers and media buyers.

Ad Age: Why don't you think the megacities argument works?

Joel Kotkin
Joel Kotkin

Mr. Kotkin: Obviously there are certain cities like New York, to some extent Boston to a lesser extent Chicago, San Francisco, L.A., Seattle and Portland that will attract young people. Many of them leave when they get older. New York City had a big increase in 20- to 30-year-olds but a big decrease in 30- to 44-year-olds. We spend most of our lives not being young, unfortunately. Many cities who tried this put their money into art museum or they put their money into a performing arts center, meanwhile, their schools were falling apart, their roads were falling apart. Pittsburgh is an example of this. More people die than are born in Pittsburgh. If you look at any statistics for California or anywhere else, 80% of people want single-family homes. That's what they want. People don't live in mega-regions, they live in communities. If you pack everyone together, the class hierarchies become very marked. The vast majority can't afford to live there.

Ad Age: Your book details some surprising population-growth trends in the Great Plains states. Will it be harder for marketers to reach these widespread media markets?

Mr. Kotkin: What I notice is what I call localism. People are affiliated with the region but even more the community they're in. Say you go to Fargo, which is a very fast-growing town in North Dakota. Lots of restaurants serve North Dakota food -- buffalo, wall-eye, whatever else that is. Do not assume, as you had before, that New York or San Francisco can dictate. Because of many of these people think that "I Was in New York or I was in San Francisco and I chose to go somewhere else." How do you connect with the pride of those people and their sense of self-worth?

Ad Age: Are big advertisers going to have to go looking for smaller markets, local sites, and hyper-local blogs?

Mr. Kotkin: Smaller both geographically and smaller in terms of segments, yes. I think the notion of connecting with the local economy is a huge thing and it's a challenge for advertisers. What they want is a mass homogeneous and they have less and less of that. But the good news is that you have a growing population. Imagine if you had more segments and a shrinking population.

Ad Age: When people think of the Plains states, they tend to think of small towns, a main street, mom-and-pop stores. Will that be replaced by a more big-box culture?

Mr. Kotkin: What you have is the population moving into several sponge cities: Sioux Falls, Fargo, Omaha, Des Moines. These cities are absorbing. You don't really need all those villages of 500 people. Some will survive, some won't. But increasingly these are metropolitan markets in the Great Plains. They're much more sophisticated. The level of education is much higher. They have demographics that look somewhat more like the rest of the country in terms of age, maybe not in terms of ethnicity, yet although that's changing too.

Ad Age: Traditionally, certain gateway cities have been the focal point of immigration -- New York, Los Angeles, San Francisco, Chicago. Is that changing?

Mr. Kotkin: What's happening is immigration in L.A. is actually dropping. It's going more heavily to Houston/Dallas ... Immigrants are going to go where there are jobs and where the cost of living is relatively low. I think it's generally trending a little bit down right now. I think that immigrants, once they get into a gateway city, will move much quickly.

One thing that America has between immigrants and the millennials is a growing developing country within the country. We talk about how we're going to be like Europe. We're not going to be like Europe. Their population-growth rate is going negative. If you look at something like [shopping mall] Le Gran Plaza in Ft. Worth with 1 million square feet, it was booming throughout the recession. There is so much pent up spending potential in the immigrant community. They buy a lot of essentials. They are the ones who are likely to buy a house. They're feeding their families. They don't have the legacy consumption of the Anglo boomers and many African-Americans who already own. I think that will have huge growth in the next 10 to 20 years.

This is the sixth in a series of AdAgeStat Q&As with researchers who have extensively studied pieces of the demographic puzzle. Earlier we spoke to Richard Florida about cities, Paco Underhill about women, Rose Cameron about men, and Tammy Erickson about Generation X, and behavioral economist Dan Ariely about how to use everyone's irrationality to your advantage.

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