Shrinking of Viewers in 'Dollar Demos' a Growing Issue

Report: Adults 50 years and older to represent 49% of TV use by 2015

They say youth is wasted on the
young. But in the not-too-distant
future, nearly half of TV may be wasted
on the old.

With an army of baby boomers marching
into their golden years and toward their
couches, flat screens and remotes, an increasingly
small proportion of TV viewers will be
in the young demos that matter to advertisers.

In a new research report, analyst Todd Juenger
of Sanford C. Bernstein said that people 50 years
and older will represent 34% of the U.S. population
in 2015, up from 32% in 2011. And in
2015, those 50-pluses will represent 49% of all
TV viewing hours, up from 43% in 2011.

That means the share of viewers in the 18-34
and 18-49 age groups—the “dollar demos” for
ad sales—are shrinking. Juenger says viewers
in the younger age groups have been decreasing
their TV consumption by about 2% per
year, while older viewers increase theirs.

“TV industry observers have watched this
trend perpetuate for years at the broadcast
networks, wondering when prices would finally reach a breaking point where marketers
would move their dollars elsewhere,” Juenger
said in his report. “It hasn’t happened, because
there has been no substitute that could
replace TV advertising for marketers. Online
video advertising may change that.”

According to Juenger, “the growing CPMs
of TV advertising against young demos, combined
with the increasing availability and
measurability of online video advertising
which reaches young demos, accelerates the
timeline—most acutely for networks targeting
young viewers (think: MTV).”

0624 Currency AARP chart

Good News and Bad News

Juenger added that the trend is “a structural
good guy in the short run.” In the short
term, the scarcity of younger viewers means
higher ad prices on a cost-per-thousand viewers
(CPM) basis for the networks that deliver
them. There is also the potential that marketers
could embrace 50-plus audiences more.

But over the longer term, the trend is a bad
guy. Rising CPMs for younger viewers will push
CPMs up and eventually drive marketers to look
for alternatives, including online advertising.

“TV networks have no obvious solution to
deal with this,” Juenger said. “They can choose
to try to capture more online dollars for themselves,
but the more they encourage their viewers
to eschew traditional TV, the more they
hasten the demise of their core business—especially
if it ultimately enables cord-cutting.”

That’s why TV networks are racing to get TV
Everywhere up and running. “It holds the promise
of satisfying the growing consumer desire to
watch content anywhere, anytime on any device,
while holding onto affiliate fees,” Juenger
said. “But the longer it takes the [multichannel
programming video distributors] and networks
to bring forth workable TV Everywhere solutions,
the more opportunity for interlopers to
grab audiences and ad dollars, and potentially
disintegrate the pay-TV system beyond repair.”

Same Old Story

The big broadcast networks have been looking
for ways to start monetizing their older
viewers. NBC has done research on what it
calls Alpha Boomers—consumers in the 55-
64 year-old demo.

David Poltrack, chief research officer at
CBS, the top-rated network but also the one
with the oldest-skewing viewers, has trotted
out research indicating that while a program
like Blue Bloods has the highest median age of
continuing shows on broadcast TV at 62.5,
its audience also has a high concentration of
heavy soft drink users, making it a counterintuitive
buy for a soft-drink marketer—
especially given a relatively low CPM.

CBS series The Good Wife, 60 Minutes, The
and NCIS all have median ages above
60, as do ABC’s Dancing With the Stars and
Body of Proof. CBS’ youngest-skewing continuing
show is How I Met Your Mother, with a median
age of 47.2. The youngest-skewing series
on all of the broadcast networks is Family Guy
on Fox, with a median age of 30.6. The CW’s
Gossip Girl has a median age of 32.

Poltrack said he is seeing an increased correlation
between commercial prices and delivery
of viewers 35-64 years old. But by and
large the media buying community has stuck
with 18-49 and 25-54 as the audiences they
are willing to pay more to reach.

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