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Corporations go for broke with the youth market, but at what cost?

In March, ABC tried to lure David Letterman away from rival CBS to fortify its late night line-up. If the deal had gone through, Letterman's show would have replaced Ted Koppel's Nightline, ABC's highly regarded news program. Though Letterman rebuffed ABC's offer, the move generated an uproar over the issue of whether programming, especially high quality shows like NightLine, should be axed in favor of light fare like Letterman. Why do this, Koppel pleads, when NightLine draws more viewers than Letterman, and devoted ones at that? The answer is that Letterman's audience is, on average, about 4 years younger than Koppel's.

And young people are, as everyone now knows, the only consumers that matter. Since the mid-nineties, this bold notion has increasingly guided decision making for many big brands. The kids have money, the kids love to buy, the kids are the future of our business. They must be reached at all costs, immediately, before it's too late, etc. etc.

But several years into the teen marketing boom, this premise deserves another look. What makes young consumers, or for ABC a young audience, so important that companies will turn their backs on loyal older customers to acquire them? The numbers don't support it: 18- to 34-year-olds (Letterman's audience) comprise about half as many households as 35- to 64-year-olds (Koppel's audience)—25 million vs. 46 million. The younger group spends $1.3 trillion annually compared with the older's $3 trillion. From an economic standpoint, ABC's maneuver doesn't make sense.

So why do companies do it? In the case of TV, teen viewers are harder to acquire, so advertisers will pay more to speak to them (Letterman's audience is 10% smaller than Koppel, but is also younger, so ads on Letterman cost 38% more). In mass-marketing generally, the conventional wisdom is that skewing younger means branding consumers whose preferences are not yet set, potentially for life. Young people are not brand loyal, the thinking goes, and are therefore more willing to try something new then their parents. Plus, young people are widely claimed to be more susceptible to advertising, so ad dollars go farther.

But doesn't this lack of brand loyalty also have a downside? Does it make sense to sell out the rest of the market for consumers who may have little or no commitment to the brands they use? Some say this generation is unbrandable in the grand scheme; they may move from brand to brand throughout their lives without ever settling down. And what about consumers over 35? Recasting an established brand as the choice of the Internet generation can be off-putting to older consumers. Worse yet, brands that do this risk looking artificial in the eyes of the young people, an unforgivable sin to this demographic. High-profile attempts by Levi's to reverse a deeply held perception that their products were for older people only served to reinforce how out of step they were with young consumers. European telecommunications giant Ericsson tried to connect with young people by plastering its logo all over concerts and raves without adding anything or explaining their connection to the event, resulting in their brand being seen as a youth culture wanna-be.

So when does focusing on the youth market make sense? Young consumers should obviously be king in some quarters. Burton Snowboards, No Limit Records and the mall-based retail chain Hot Topic are All Youth All the Time, and don't stand to lose a penny ignoring the adult market. But ABC is not any of these. It is a television network that serves a viewing audience that spans several generations. For them to sacrifice older consumers for younger is dubious, based more on the current mania for youth than wise marketing strategy.

The decision whether or not to go after young consumers should be based on simple rules: A) Have something young people want and can afford: this means shoes, razors or music, NOT estate planning, high-fiber cereal or luxury automobiles. B) Don't carelessly sacrifice older consumers to reach young ones: just because your product may have merit among young consumers doesn't mean you need to adopt the kind of "extreme" positioning that alienates adults. C) Be true to your brand: consumer interest comes and goes, especially among the young, but your brand is forever. If your products don't pop with teens and twenty somethings, maybe it's not to be.

If ABC's attempt to woo Letterman had been successful, it may not have been a victory in the long run. Before long, Letterman's fans would have moved on to the next big thing, and by then, Ted Koppel viewers would be long gone—along with whatever made ABC unique and recognizable in the marketplace.

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