Thirtysomethings Sally and Joe K., who were married about a year and a half ago, recently bought their first house, a modest bungalow in a D.C. suburb. To celebrate their good fortune at actually finding an affordable home, Sally and Joe decided to splurge on a wide-screen TV.
Up to that point, they were acting like millions of newlyweds before them: get married, buy a house, get a big TV, set up the cable box and settle down to fight over which channel to watch. But contrary to expectations, Sally and Joe are not going to sign up for cable or get a satellite dish. Why? Because they get all the video entertainment they want in the mail from Netflix, and besides, they are way too busy with their demanding jobs to watch much television.
Add one more couple to the growing number of young people who have a diminished need for broadcast television. Even if they eventually get a dish or cable, chances are they will watch a lot less of it than if they bought their TV set in 1984 or 1994 rather than 2004. These are people who grew up watching television, but now they appear to be abandoning it for other forms of entertainment, or for other things they would rather do.
An important question for marketing and advertising professionals to ask is this: Besides watching movies on DVD, what are people like Sally and Joe doing with their time if they are not watching as much advertising supported television?
Well, they don't appear to be reading any more periodicals. According to the Bureau of Labor Statistics (BLS), between 1992 and 2002 consumer spending on reading material (mostly newspapers and magazines) declined 32 percent in real terms. During that same period the BLS reported that, in real terms, after-tax household income rose 21 percent.
Veronis Suhler Stevenson, a New York-based merchant bank specializing in media companies, reported declines over the past five years in the time consumers spent with broadcast TV, radio, newspapers and consumer magazines. But in the same period, it reported double-digit annual increases in the time spent with video games, home video and, of course, the Internet.
There is also the fact that more people are spending more time away from home. The American Automobile Association reported in late 2003 that cruise and tour bookings were up 10 percent and 9 percent respectively over 2002. It also noted that nearly 60 million Americans traveled 50 miles or more in the holiday season just past, with most of them traveling by car.
Perhaps some of them were going to their second home or checking one out. An amazing 60 percent of the respondents to the 2003 RoperASW survey said they either owned a second home or wanted to buy one. That level of desire to own a second residence suggests that we were too conservative in our modest projection that second-home ownership might reach 10 percent of all households by 2010 (â€œThe Coming Boom in Second-Home Ownership,â€? October 2001).
Outside of the world of entertainment and travel, however, what more American adults appear to be doing with their time is working, looking for work or being otherwise engaged in some form of economic activity (such as selling stuff on eBay). The reasons have to do with the changing nature of work and the increasing pressure on formerly middle-class wage earners to obtain extra money.
In 2001, nearly 20 million workers did some work at home as part of their primary job, according to BLS reports. Those wage or salary workers who did that extra work on an unpaid basis worked an average of nearly 7 hours a week at home. That, of course, is time taken away from watching television, reading the newspaper or engaging in some other leisure activity.
But as most people know, it's the self-employed who work the longest hours, and the ranks of those who are their own boss or wish to be so are growing rapidly. Last November, FedEx released the results of a nationwide survey in which 10 percent of respondents said they currently owned a small business, two-thirds said they dreamed of owning their own business and an astonishing 55 percent said they would leave their current job and start a business, if they could get the money to do so.
Nearly half the respondents (40 percent) said that the primary reason they would start a business was to â€œdo something they loved or enjoyed.â€? There was a time when work was considered drudgery and pursuing a hobby or watching TV was fun. But today, work is the new form of recreation and entertainment.
What does this mean for advertising supported media? It means some tough years ahead as advertisers search for other ways to reach consumers. It suggests that business media may become a more efficient way to reach consumers when they are at work. Since most businesses have a connection to the Internet, more people at work means that more advertisers will try to find ways of getting their messages on business-oriented Web pages.
Direct mail advertising has in the past focused on mailing to a prospect's home. Demographic appends have made those residentially based lists ever more targeted. But what about small business lists? Geographically coding them doesn't reveal much about the business owners' or employees' demographics or purchasing behavior.
Perhaps what is needed is a new kind of marketing research company. Much of present day market research involves calling the homes of a random sample of the population to be studied. But with fewer people at home (or even having a landline phone to call them on), this will become less effective, to say the least.
What future consumer marketing will require is research that finds out what the target customers are doing with their time, how much of it is spent working and how an advertising message previously directed to the home can be delivered to consumers while they are at work.
Peter Francese is the founder of American Demographics. He can be reached at [email protected].