Marketplace Analysis
Was that 2002? Has it gone so quickly? 2002 was a year that began sluggishly, was punctuated by a hesitant goalkeeper and ended with an air of optimism. We now look forward to the new year with a renewed (and, hopefully, not misplaced) confidence.
Times are changing and if we are not careful we won’t even notice. The entire framework of our society is altering. By examining some broad consumer patterns such as household and population changes (for instance, age, lifestyle, spend patterns), the emergent results are startling. If we attempt to understand these indicators and the trends surrounding the supply of media, then future judgements can be made more easily.
A brief tour of the changes.
Households: Families with children no longer dominate the UK landscape. For the first time ever, the proportion of homes inhabited by couples with children, couples without children and single people is roughly the same, at about 28 per cent. The family Sunday lunch is now a pastime of the minority. These changes have other huge ramifications for targeting.
Age: Proportionally we are demonstrably older and live longer. For the first time ever, people of 60 and over form a larger part of the population than children under 16 – 21 per cent compared to 20 per cent. There has also been an increase in the number of people aged 85 and over – now over 1.1 million, or 1.9 per cent of the population. Identification of the most valued target audience is crucial.
Lifestyle: People are working harder and longer. 1 in 6 (16 per cent) of workers surveyed now work over 60 hours a week. This compares to just 1 in 8 (12 per cent) of all UK workers in 2000. More would prefer to work less than to win the lottery. Quality of life and the balance of their life are becoming more important in people’s lives.
This has huge implications on the way we communicate and where.
Spend trends: Growth has, historically, come from people’s wants rather than their needs. Disproportionate growth in the expenditure behind categories such as leisure goods, out-of-home entertainment and holidays are illustrative of the changes in expenditure profile. This is predicted to continue. People are willing to spend money they don’t have to enhance their quality of life. Tempting offers and continual sales only serve to perpetuate the Peter-Pan-type existence in Never-Never Land
Media supply: Supply is outstripping demand. Media has never been so plentiful with an abundance of opportunities growing at a faster rate than demand. One micro example of the rapidity of change is that 1 in 5 homes now have a DVD player; five years ago the figure was none in 100. Many ways to hit your target audience are mirrored by too many ways to miss.
Understanding of these broad trends allows a clearer perspective on the misty world of the future. These broad trends are clearly not the only barometers of change but they are substantial ones.
There are other factors that influence our lives. We must be respectful of the broad economic factors that not only affect our lives, but those of people who make decisions in the marketing arena.
GDP is flattening as the impact of the service sector and its slowing growth is more evident. Unemployment is the lowest for two decades, steady with no signs and significant movement upwards.
Consumer confidence remains shakily buoyant with high-street spending contradicting many economic indicators.
Household expenditure is strong, as housing costs decline and consumers spend, not save. Increased re-mortgaging has contributed to this growth in householder expenditure.
Debt held on credit cards has reached massive proportions as people get used to a life lived on credit.
The FTSE is still a having a rocky time after a period of slow recovery and unrest in the Middle East still has the potential to cause ramifications.
Translating these influences into media expenditure and consumption predictions is a difficult task. The market is expected to be tough, although the poor start to 2002 is expected to give rise to comparable increases during January to March 2003. The strong relationship between ad spend changes and corporate profitability will inevitably remain. Mediaedge:cia predicts advertising revenue to be +4.1 per cent in 2002/3 and 5.7 per cent across 2003/4. This recovery will be led by TV.
So we enter the new year again looking for those green shoots of recovery. Will they be deep green or a scalded brown? Our view is that they will be somewhere in between.
From a media placement perspective, our consumers will continue to be more illusive with patterns of behaviour falling outside the remit of traditional models. Our consumers will be ever more advertising savvy, more discerning and more sceptical. This makes the challenges in 2003 more challenging and the potential rewards more rewarding. We must look positively towards the future, where the half-full glass beckons.
Top Ten Northern Spenders
1DFS FURNITURE PLC£32,483,295
2TIME COMPUTERS LTD£18,692,573
3MATALAN LTD£11,286,925
4JD WILLIAMS & CO LTD£11,151,178
5NORTHERN ROCK PLC£10,809,767
6MCCAIN FOODS LTD£10,465,694
7GUS GREAT UNIVERSAL STORES£9,787,739
8SCOTTISH EXECUTIVE£8,784,387
9WILLIAM MORRISONSUPERMARKETS PLC£8,442,416
10CAUDWELL COMMUNICATIONS£8,216,394