(06-11-2014 10:29 AM)Chappy Wrote: (06-11-2014 09:57 AM)TIGERCITY Wrote: (06-11-2014 09:34 AM)Frank the Tank Wrote: On the one hand, you're correct that beer and soft drink advertising isn't very effective on a Mormon audience. On the other hand, Mormons have the highest income and educational levels of any Christian group and BYU specifically has a disproportionate number of high income alums, so that's a net positive for advertising from a pure discretionary income standpoint for bigger ticket items like iPhones and luxury cars. I would imagine the BYU audience looks like the average golf TV viewing audience that doesn't drink beer or Coke, which is actually pretty valuable based on income.
Still, as someone else pointed out, the age of the audience (the younger, the better) is by far the greatest factor for advertising dollars (more than income, educational levels, religious preferences, gender, race, etc.). The age 18-49 rating is what networks really care about (the total viewership number that networks use in press releases is actually irrelevant - viewers over 50, unless they're really really really rich like the golf viewing audience mentioned earlier, are effectively worthless with respect to advertising revenue) and the biggest advertising premiums of all are for the age 18-34 rating.
As usual - thoughtful and interesting post Frank. Any ideas 'why' on the bolded above? Over 50s probably have the most 'disposable income' of all those age groups. Not 'taken in' by the advertisers? Already have a lifetime of 'stuff?' Ideas / research for this?
I also find that interesting. Prior to age 50, my dad's spending habits were dictated by needs rather than wants (ie college tuition for me and my sister, mortgage, etc) while now that he's over 50 his home is paid off and his kids are on their own and he spends my inheritance 
quite freely... bought two new cars in 2013 and takes LOTS of trips (I won't even get into the very profitable pharmaceutical industry, which advertises to older men relentlessly during sporting events). I would think that he's not alone and that his type is worth lots to advertisers.
Not disagreeing with Frank here, as I've heard many times that they covet the younger demographic. I'm just not sure why.
Someone that works for a large advertising firm told me this once: for TV networks, the advertisers are their customers and you (the viewers) are the product. There are a lot of reasons why younger viewers are more valuable (and this has been the case for decades), but here are the two main ones:
(1) "Annuity"-type Products - A common thought of why advertisers target younger people is that old people have more entrenched buying habits and are more brand loyal. That's somewhat true, but it's not really about the random consumer goods that you pick up from Target and Wal-Mart. Instead, young people are MUCH more valuable for the massive advertisers for the types of items that have monthly or regular locked-in fees: home and car insurance, banks (where you have your checking account disproportionately leads to where you obtain higher-margin mortgages and home equity loans down the road), cell phone plans, retirement accounts, etc. Outside of the beer, car and fast food advertisers, doesn't that list of industries look like the list of commercials that you see during virtually every sporting event? It's not an accident.
Most importantly, these aren't just one-time purchases. When these companies are able to sign up customers in their 20s and 30s, they're typically able to lock them in for decades. A 50-year old doesn't switch insurance companies, banks or retirement accounts very often (if ever), but younger people are still much more transient in those products that generate regular fees for many years. That makes young people incredibly valuable to that specific group of advertisers that just happen to have the largest advertising budgets of anyone.
(2) Relative Scarcity of Younger Viewers - There are significantly fewer young people that watch TV than older people. This means younger people are harder to reach compared to older people. In turn, that means TV programs that attract more younger people are worth much more to advertisers. Think back to what I said about viewers themselves being the product. The less supply there is of a product (in this case, young viewers), the more valuable they become in the marketplace when there's high demand (see my point #1 for "annuity"-type products). That's why prime time programming decisions by networks are almost entirely driven by the age 18-49 rating. (Just look at the cancel/renewal analysis of TV shows on websites like TVbytheNumbers. They have continuously shown that the 18-49 rating drives it all, with extra credit to shows that have a high 18-34 rating, while the total number that includes viewers over 50 is irrelevant.) An advertiser can reach the older audience with many other types of shows throughout the day for a lot less money by comparison.
Note that the same thing applies to genders - whether your spouse or significant other believes it, men actually watch a lot less TV than women. This means that, all things being equal, advertisers pay a premium for a show with a male audience compared to a female audience. As a result, the advertising gold mine is a TV program that draws high ratings among males age 18-34 and they watch live (as opposed to on a DVR or streaming). Hmmm... do you see why sports TV rights have been skyrocketing?
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