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The Ups and Downs of Upscale

by Dave Zornow

The best basic cable networks for Adult 18+ composition in households earning $60,000 or more a year are Home & Garden, Travel, ESPN2, History, E! and CNBC according to MRI's Fall 1997 study. So if an agency is buying only the top networks, that's all they need to know, right?

Household income is a good indicator of someone's likelihood to buy big-ticket and luxury items, but if you represent a network that gets left off the initial list of upscale networks don't despair because it's not the only upscale indicator. Targeting households with annual incomes of $60,000+ delivers almost six of ten (55 percent) BMW buyers according to MRI. But what about the other 45 percent? They drive BeeMers and have convinced a car dealer and a loan officer that even though they don't make 60 G's, they are worth the risk. Shouldn't networks who do a good job of reaching these $60,000+ wanna-bees be considered, too?

BMW isn't alone in the fast lane for the virtually upscale crowd. Thirty-two percent of Volvo owners don't make the $60K cut either, as well as 45 percent of Infiniti and 55 percent of Honda owners.

The fact that income isn't the only factor in determining upscale behavior shouldn't come as surprise to anyone who has leased a car. For many consumers, attractive leasing plans are a simple and rewarding way to drive more of a car than they can afford to own. Or to put it another way, it's chance for some of us to drive upscale without being upscale.

Diane Crispell, Editor-At-Large for Roper Starch Worldwide and former senior writer for American Demographics magazine, says that income is a useful classification, but it's not the only factor in determining upscale purchasing power. "You cant just put people into boxes and leave them there," she says. Crispell says that cars are one example where consumers will spend beyond their means. "People with a more modest income will spring for a more luxurious automobile because it's important to them." In addition to increasing their self-esteem, it's a way for some people to show off their personal success.

If income isn't a leading economic indicator for leading-edge buyers, what is a good substitute? Crispell says it depends on the category and on a little bit of common sense. She says that buyers and sellers have to think about the priorities of customers. "Within the constraints of the disposable income of the consumer, you have to consider their priorities," she says. "Income is not the sole determinate of upscale psyche. Other considerations, such as education, the kinds of jobs they hold and the neighborhoods they live in are also important."

Crispell also says that the definition of upscale may vary from category to category. "Some luxury items aren't very expensive, like cosmetics. Although not a necessity, upscale cosmetics are well within the range of many consumers." This is especially true for younger consumers, who can take on the trappings of success by purchasing expensive accessories without going completely broke.

Maximizing efficiency may also sacrifice reach -- ominous words at a time when the optimization is the order of the day at many agencies. The top five $60,000+ networks reach less than four of ten (39 percent) luxury import owners (defined, for the sake of simplicity, as Acura, Audi, BMW, Infiniti or Lexus). This is still a sizable percentage of luxury import owners, but it doesn't reach the largest possible targeted audience. (For the purposes of this article, reach is based on MRI Fall 97 data for respondents who said they watched a cable network at least once in the past week.)

If buys are limited to the top five indexing networks for $60,000+ income, only 39 percent of these upper income households are reached due to the smaller ratings and limited coverage of these channels. By comparison, the weekly reach of CNN against adults in homes with $60,000+ annual income is 46 percent.

There is, however, a compromise which works for both the buyer and the seller. It expands the number of networks included in the buy, increases reach and includes more legitimate prospects regardless of their annual income. By buying the top indexing networks for household income $60,000+ (HGTV, ESPN2, Travel, History and CNBC) and the networks which reach the highest percentage of households with $60,000+ income (CNN, Discovery, ESPN, Weather, and A&E) buyers can optimize their cable schedules for both reach and efficiency. A buy using this combination reaches 70 percent of these upper income households. Reach is achieved without sacrificing targetability, posting a 117 index for Adults 18+ in $60,000+ households. And best of all, it's still effective: the 70 percent reach against $60,000+ households translates into 65 percent exposure among Acura, Audi, BMW, Infiniti or Lexus owners.

Sellers are happy because this scenario expands the number of networks on the buy, letting systems do a better job allocating inventory and allowing cable to deliver more targeted reach points without needing to add broadcast TV to the buy.   ##

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