Fareed,
Thank God this Koppel business has annoyed you. I thought we were going to have to talk about the Middle East, a topic about which I have almost nothing interesting to say.
It is a little early in the morning to go through consumer categories and spending patterns, but here goes. For advertisers, consumers are more valuable if they do two things: spend money and switch preferences easily. You are right about old people having a lot of money. But do they spend it? If they are men (and Koppel’s audience is more men than women) they really don’t spend it. Women spend most of the household money in those older, richer demographic categories. Even in that bastion of male consumer dreams, stereo equipment at stores like Nobody Beats the Wiz, women make up more than 60 percent of stereo equipment revenue. Men like to get involved in complicated purchases (the house, the car). They aren’t so interested in the majority of things that consumer advertising focuses on: detergent, candy, cold medicine. Women buy those things for men. Think of all those De Beers ads. Even though men buy more than half of the diamonds that are sold to women, the ads are directed at women. That’s because even when men are spending the money, women are telling them what to buy. Basically, we rule.
You’re right that the theory is that advertisers don’t like older people is because they are set in their ways. A BMW guy at 30 is a BMW man at 60. It is more expensive to advertise to a younger audience because BMW wins the revenue from not just one car, but the 10 cars bought over the next few decades. There isn’t great research on any of this, but I think this argument no longer makes sense. With digital technology, it is far easier to create a brand out of thin air than it ever was before. New global brands pop up all the time—in the past it took decades to build an image. And people switch brands all the time. Think of Lexus and Acura. All the (older) people who bought those cars switched from another brand. Remember The Bonfire of the Vanities? Those social X-rays dressed in head-to-toe Chanel or Yves Saint Laurent. Today, New York socialites mix and match. In fact, W magazine (that’s a fashion magazine) just had Gwyneth Paltrow on the cover, and she goes on, in her New-York-Valley-girl-like way, about how grazing among different designers is so cool, such an honor for a girl like her. Not only do people not stay brand loyal, they no longer think it is cool to be associated with one brand. So, you may be right that Koppel and his old men are worth keeping.
I am so glad that you got into a froth about Koppel. Let’s move on to the Middle East. Err, I’m for peace.
Paula
