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The media business has been inundated with articles, reports and opinion pieces heralding the importance of Millennials (adults aged 18-34) to marketers, highlighting the fact that this segment is the largest consumer of digital media while bemoaning their reduced exposure to “linear” TV. The argument is simple: if you want marketing success, you must advertise to Millennials, but you can’t reach these “elite” consumers with TV because they are all watching Netflix and streaming videos on their smartphones.
OK, but just what are the facts?
First, it is important to keep in mind that the Millennial market represents 30% of all adults aged 18+. In contrast, the 35-49, 50-64 and 65+ age groups account for the remaining 70% (see Table I).
Second, concerning the relative spending power of Millennials, data from the annual Bureau of Labor Statistics (BLS) studies reveal that only 6.6% of all U.S. households are headed by an adult under the age of 25 and 16.5% are headed by a person aged 25-34. (These percentages are lower than those that are population-based because a sizable percentage of Millennials—especially at the younger end of the age bracket—are still living with their parents or at school.) Still, about 65-70% of Millennials are household heads as defined by the BLS, which has noted that, on average, such homes have the lowest current incomes and, in fact, live in debt, spending more on consumer goods and services than they take in as income. In contrast, a typical household headed by an adult aged 45-54 earns 2.8 times more in pretax income than one helmed by a person under the age of 25, and 1.4 times more than a household whose head is aged 25-34. The fact that younger households are usually poorer households is not new, but it contradicts the belief that Millennials are big spenders. As shown in the BLS compilation from its 2013 study (these reports take a long time to see the light of day, but the findings are consistent, and we expect that the 2017 findings, when published, will no doubt paint the same picture) the actual big spenders are, on average, homes with household heads aged 35-64 (see Table II).
Finally, we come to the issue of Millennials “deserting” TV. While it is true that 18-34s, who are normally TV’s lightest and most selective adult viewers, have “embraced” digital video venues to a far greater extent than older adults, many of the surveys that ask respondents to describe their usual TV/video viewing behavior produce extremely distorted findings that are slanted heavily in favor of digital. Why? Because digital is “cool” and TV is “old hat,” so younger respondents in particular will give the impression—if polled in a careless and non-program specific manner—that they almost never watch TV, while they consume vast quantities of digital videos, especially on their smartphones. However, quite a different picture emerges when respondents of all ages participate in a metered panel (such as Nielsen’s national peoplemeter operations) where device usage is tracked electronically.
The Nielsen Comparable Metrics Report for the fourth quarter of 2016 presents all sorts of comparisons of TV/video viewing by platform. In Table III, we have culled some of the more salient findings for adults by three age groups: 18-34; 35-49; and 50+. As shown, only 79% of the Millennials in the Nielsen panel watched one or more TV shows on a live or delayed basis during an average week, but when the amount of their exposure was tallied, a more revealing picture emerges. TV’s average minute audience across all dayparts and program sources among 18-34s was 8.4 million; in contrast, the comparable weekly reach totals for PC videos, smartphone videos and tablet videos were 26%, 63% and 18%, respectively, and their combined average minute audience among Millennials came to only 2 million, or 24% of the comparable TV consumption of this group (see Table III).
Of course, it is true that Millennials are continuing to decrease their TV content intake and increase their digital video usage; but the number of appealing long form videos available digitally is very limited relative to TV. Moreover, it is unreasonable to expect many Millennials to devote sustained attention to TV sports, dramas, news, movies, documentaries and talk shows on their smartphones throughout the day. Even for Millennials, a more leisurely and private session with a bigger screen at home is usually the preferable choice when the content is of real interest.
Much of the buzz about Millennials being of vital concern to marketers, as well as their supposed embrace of digital media, is fostered by advocates of digital. The goal is to pressure advertisers to abandon their old ways, especially the use of linear TV, and go whole hog into digital media. Such tactics fail to pass the smell test when the facts are objectively evaluated. That said, there is no doubt that digital media, including video content, is on the upswing, to the point where the major broadcast network and cable players are moving into digital venues with so-called skinny packages of 40-50 channels whose content is streamed, not accessed via cable or over the air. In addition, major digital entities such as Google and Amazon are ramping up their video offerings, and with these developments, it is clear that an increasing share of TV/video content will be accessed digitally, not only by Millennials, but also by older generations. This will open the possibility for much improved audience targeting, which is an aspect that media planners shouldn’t shrug off or be complacent about. Yes, traditional TV is still the dominant platform for all age groups, but digital is nipping at its heels, and with it many opportunities for reaching the right people with some degree of scale. Planners who fail to look ahead—including recommending tests of digital targeting opportunities to their clients—risk being caught short if competitive brands take the lead in exploiting digital media options.