By Walter Ohlmann, President and CEO, Penny/Ohlmann/Neiman Inc.
I am a great believer in Mark Twain’s assertion that predictions are difficult to make, especially when they deal with the future. If Twain could witness the dawn of the 1990s, I am sure he would feel even less comfortable about forecasting the future.
The dynamics of our environment are changing with such speed that staying close to the leading edge has taken on significant new dimensions for businesses, government, social services and those dealing with the environment in the Miami Valley. These changes are revising requirements of advertising and public relations and, coincidentally, demanding the reshaping of some basic tools of the trade, as marketing communicators struggle to stay positioned to lead change, not follow.
Consequantly, the industry will undergo significant change as the communications environment becomes ever more complex.
A New Meaning to “Green”
Just as the words “coke”, “pot” and “gay” have taken on new meanings over the years, so will the word “green” in the next decade.
Initially, only the most enlightened marketers will jump on board as the awareness of environmental issues spread across the country. Today, there is little unanimity among retailers on whether to offer photodegradable plastic bags or support community consumer education and recycling programs.
But consumers are aware. Not only of the environment but all living things within it. Marching against furs is spreading. “Green” products, like disposable diapers, are selling. And crackers made without tropical oils are being consumed in greater quantities.
The recently aired spots by a national retail chain urging customers to select products which are better for the environment is a harbinger of things to come. During the coming decade, it will be incumbent on both advertisers and their agencies to become both environmentally conscious and environmentally responsible.
The Influence of Demographics
Profound changes in the makeup of our national population and in the corresponding approach to lifestyles and long held views will serve to drive the advertising engine. It will push advertising and public relations in new directions for the 1990s. The Miami Valley is sure to feel the effects of these trends.
We can expect a return to a more family oriented, value-driven environment during the next decade. So-called baby boomers, numbering more than 75 million, are aging (the first boomers turned 40 in 1986) and growing tired of the fast-track career. They will want to spend more “family time”. For business communicators this will mean a careful reshaping of product positioning in the years to come. It will also mean more attention must be paid to evaluating and enhancing the company image.
The general population, nationally, will grow from more than 250 million in 1990 to more than 295 million by 2010. A full 47% of this growth is projected to be made up of Hispanics, 23% Blacks, 17% Asians and 13% non-minorities. This shifting population makeup will result in differing advertising and public relations approaches to target these growing new segments. The Miami Valley will see a similar shift, because “seniors” will top 100,000 in Montgomery County alone.
As these shifts occur, there will be the start of a swing from mass marketing to micro marketing. Although we should see some acceleration during the 1990s, the major conversion will probably not be possible until after the year 2000.
However, we’re beginning to see early examples of the swing even today. For instance, Adweek reports Proctor & Gamble is joining Donnelly Marketing and Chuck-Robot Inc. to create a supermarket checkout system that can run off coupons based on customer’s purchases.
And Eastern Airlines has created the Weekenders Club which allows members to travel at special rates to destinations which are underbooked and to which the member has previously expressed a desire to go. These members are contacted individually as seats are available.
In the coming years, we should be able to see newspapers put together section by section depending on the interests of the subscriber.
And television will be able to beam selected commercials into the home, depending on the psychographics of the viewer.
Micro marketing will be but the latest in the tremendous strides taken by media in the sophisticated techniques which enable us to do some pretty incredible target marketing today.
Surveys have told us women will assume an even greater role in the labor and executive forces for the 1990s. This accelerating trend is already reflected in television advertising and in the new national magazines aimed directly at communicating with the working woman.
Seniors Take a Front Seat
As previously mentioned, the 1990s will be highlighted by the emergence of a sophisticated, intelligent, value-oriented, graying consumer interested in social, political, economic and environmental issues. I am talking about the growing number of seniors. It has been estimated that between the years 1990 and 2000, the 50 plus age group will increase by 18,5% to approximately 76 million, while the number of Americans under 50 will increase by only 3,5%. Mature adults over 50 will earn 42% of all after-tax income, control half of the discretionary spending power and possess more than 75% of the nation’s financial assests. If the ‘80s was the decade of the baby boomers, the 1990s will see a new hero, the “prime of life” senior.
This combination of demographic refinements has effectively broken apart the mass marketing of consumer products seen in the ‘70s and ‘80s.
A number of better-defined market segments have begun to emerge, each demanding attention and quality, value-added, “custom built” products and services. Highly targeted advertising and the growing use of public relations will serve as the primary communication vehicles as Dayton businesses and government respond to these changing markets.
While the great engine of technology development will continue, the American love affair with high-tech will be modulated somewhat in the 1990s. Quality, service and value are words that will take on more clout.
Those who talked of superior service in the 1980s will have to deliver in the 1990s. A growing sophisticated audience of baby boomers and seniors won’t settle for talk and no action. Recent surveys have shown that quality and service are now rated tops in importance by consumers in buying situations. Better service will help separate a business from its competition and can create new growth in a crowded market. Advertising and public relations must develop the correct communications strategy to create reassurance for the consumer and provide a major point of difference in the decision making process of the future.
Changes in Media will impact advertising
Changes in basic media will influence advertising and communications during the coming decade.
Network television advertising revenues will continue to fall while the cable will continue to rise, thus, fragmentation of the television audience will continue with the addition of many more available channels. The good news here for advertisers is that they will see an increase in the probability of exposure of their message targeted at exactly the audience desired and at a lower cost.
But perhaps the big news will be the increased use of fiber optics and the corresponding impact on the American scene. For instance, ultra-high capacity cable would not only increase the quality, but also the variety of TV programming available to the American home. Additionally, it could open new channels of communications such as interactive programming, videotext and new types of computer-based and computer-originated programming.
Reading in general is on the decline and doesn’t promise to improve much in the 1990s. To keep their existing audience, daily newspapers will need to become more visual with shorter stories. There will be new emphasis on women’s issues, the social scene and seniors’ lifestyles, as well as contemporary feature length articles on things happening in the Miami Valley. To take advantage of the growing feelings for family, value and services, there will be probably be an increase in the use of zoned editions, special interest sections and intensified demographic targeting in the 1990s. Again, this will be good news for advertisers who can more closely target their intended audience.
Radio will continue to carry out programming formats that appeal to targeted audience. Advertisers wishing to reach a particular audience will have that opportunity with continued segmentation of the market.
Consumer magazines are already highly segmented and will continue to bring out new titles to reach specific affinity through the 1990s. In 1988 more than 490 consumer magazines debuted. Most did not last. However, magazines have been in the forefront in attempting to reach these segmented lifestyles.
Magazines on fitness, culture, computers, etc. will cut deeply into mass audience publications much like cable television is doing to network television.
And the trade press is not far behind – with the new books coming out nearly every month. Fields that only had two or three publications a short time ago are crowded with a dozen books or more. There will be some shakeout in the coming years with the survivors staking out niche markets.
Tools and techniques for the 1990s
Changes in demographics, client expectations and the issues of the 1990s will have a major impact on advertising tools and techniques. Some emerging areas include:
- Psychographics: Explores the lifestyles of a particular group and the special occasions that shape their lives. Psychographics will be teamed with demographics to learn more about these target audiences. It will also help shape the message as well as select the medium as we better define our particular audience segments.
- Database marketing: Provides the answer to the growing necessity for effective marketing in the 1990s. It allows a marketing manager to examine demographics, psychographics and other factors affecting sales via computer and identify potential customers in a highly targeted and efficient manner.
- Expanded use of computers: Problems won’t wait for long-studied answers and ponderous execution during the 1990s. Total computerization will ensure better coordination and a faster response to customers because flexibility and speed will be at a premium. Computer technology will help organize and quicken the process. Where it cannot, reduction or elimination of time consuming middle steps must be considered.
- National campaigns go local: National-regional advertisers will create more local campaigns from their overall strategy. The new fragmented audience of the 1990s desires highly personalized and individualized treatment. Campaigns will bring the key message, with a local flavor, right to the front door of residents of the Miami Valley.
- Employee communication: Employee communication by business, health care, manufacturing and government service organizations will dramatically increase and improve in quality. Employee communication will receive this added attention because management will come to grips with the need to provide exceptional service to customers. Quality service can only be provided by people who care. As such, there is a direct relationship between the expanding knowledge of employees and their feeling closeness to the products and services provided by the company. Employee communication programs could significantly influence the course of businesses’ success or failure here, as elsewhere, during the coming years.