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The Madison Avenue loyalty program

Published 7 April 2002 in The Denver Post
Copyright ©2002 by Ed Quillen. All rights reserved.

A recent brouhaha, over almost as soon as it started, concerned one component of the Mickey Mouse empire, specifically the ABC television network and its late-night program, Nightline.

David Letterman's contract was expiring at CBS, and there was much talk that ABC would pick it up, so that Letterman's hour of entertainment would replace Ted Koppel and Nightline. Since Nightline enjoys competitive ratings and some status among the high-minded sorts who just can't get enough of Henry Kissinger, there was the inevitable question: Why even think about making such a major change?

It turned out that the television industry is not driven exclusively by ratings. Advertisers like a big audience, to be sure, but they want the right kind of audience. Nightline and Letterman might have drawn similar numbers of viewers, but Letterman's viewers tended to be younger.

Older viewers, in general, have more money to spend, so wouldn't they be more desirable? Not on modern Madison Avenue.

The current theory there is that older viewers are already set in their ways, so they're not as likely to be influenced by advertising.

Younger viewers are perceived as more malleable. Plus, there's the logical view that if you can get a 20-year-old attached to your brand, you've got her for the next 50 or 60 years; a 50-year-old's attachment can't be good for much more than 25 or 30 years.

Thus the younger viewers, even if they don't have as much disposable income, are more valuable for advertisers, and that's why ABC was interested in Letterman.

At first, this sounds plausible, but it doesn't stand up to examination.

For starters, attracting younger viewers didn't do TV networks much good in the past. When I was in college 30 years ago, everybody who was remotely sober at that hour watched the ABC late-night talk show, hosted by the literate and witty Dick Cavett.

Even though that program was nearly as popular as marijuana or the Rolling Stones, ABC took it off the air -- apparently, it wasn't attracting viewers who had money to spend on advertised products.

Further, this youth-oriented programming then didn't build any loyalty, even to ABC and its kin -- for years, as we Baby Boomers became the dominant demographic group, network television viewing has declined.

But that's just television. What about the idea that if you instill brand loyalty in a youngster, he'll pursue your company's products for the rest of his time on this earth?

For one thing, brand loyalty doesn't matter when so many brands disappear. Back when pop came in returnable bottles that you could cash in for two cents apiece, I loved Nesbitt's orange soda, and Nesbitt's cream soda was a close second. Despite my intense loyalty, I haven't seen a Nesbitt's soda of any sort in years.

For another, the brand can give up on you. We always used to get Kenmore appliances when we could afford new ones, since we figured Sears was everywhere. But about 10 years ago, Sears decided that rural America was no longer worth the trouble. Even though it has since returned, I'm now quite happy with whatever brand our Gambles store has in stock.

So there are two companies who had developed a loyal customer in me -- and I don't buy Nesbitt's or Kenmore brands any more.

Another impediment to brand loyalty is brand dilution. This can result from a venture into unrelated products, like Harley-Davidson cigarette lighters or Coca-Cola lawn furniture.

Few consumers have more brand loyalty than cigarette smokers, so of course the tobacco companies abuse that loyalty. For instance, Camel used to mean a real cigarette that I'd walk a mile for.

Now that once-distinctive brand has been extended to Camel filters, lights, menthols, longs, thins -- if companies think brand loyalty is so important, they could try practicing it themselves, rather than slapping their brands on inferior or unrelated merchandise and hoping that some of the patina will transfer.

There's also another important factor that hasn't been discussed publicly -- call it brand hostility, as with the sensible people who refuse to purchase or use any product made by would-be monopolists like Microsoft.

The advertising gurus may be right about people my age -- Baby Boomers. We're not a good demographic for developing brand loyalty.

But it's not because we're set in our ways and thus remain attached to the tastes we developed during our jejune years. It's because, over the years, we have seen companies go out of business, abandon customers or adulterate their own brands.

So I suspect that Madison Avenue's desire for programs that reach younger viewers isn't so much about developing brand loyalty as it is about reaching them before they're old enough to know any better.


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