Back in 1926, some 87 years ago, F. Scott Fitzgerald wrote, “Let me tell you about the very rich. They are different from you and me.” According to two June 19 MediaPost reports on recent consumer research, he was right – and also wrong.
In order to understand why, it helps to define just who today’s rich are, and Ipsos MediaCT’s ongoing study of “Affluent” Americans very conveniently does that for us [link unavailable].
The study concentrates on “roughly the top 20 percent of Americans in household income (HHI),” which today translates into earning at least $100,000 a year.
The Affluents are about twice as well educated as the population as a whole, 60 percent having college degrees versus 30 percent of the general population.
They’re more married – 70 percent versus 50 percent – and that second paycheck is what gets them above the $100,000 HHI threshold.
But according to Steve Kraus, Ipsos SVP, Chief Insights Officer, that just makes them affluent, not rich.
The difference between affluence and riches, he says, is assets. In addition to that $100,000+ HHI, the rich have at least $1 million in liquid assets.
By this standard, only 12 percent of the Affluents are rich. Or, to do the arithmetic another way, the much-maligned “1 percent” are actually 2.4 percent of the population as a whole.
Differences between them and the Affluents go beyond having more assets, though it’s hard to tell whether these differences are causes or effects of their wealth.
Rich consumers are even better educated than Affluents; 71 percent are college graduates, and 33 percent hold graduate degrees.
Most are still on their first marriage, which avoids asset-destroying divorces.
They’re in their 50s, about ten years older; this means they’ve had an additional decade to make money, build up assets and cash in on the bountiful benefits of compound interest.
Their average HHI is closer to $200,000 than $100,000 a year.
Not Fitzgerald’s rich
When Fitzgerald described the rich as people who
possess and enjoy early, and it does something to them, makes them soft where we are hard, and cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand.
he was describing people who’d inherited and grown up with great wealth.
Today’s rich weren’t born into their money. They earned it, mainly by being “owners of a successful business in today’s high risk/very high reward entrepreneurial climate,” Kraus explains. In other words, they’re far more likely to be Richard Bransons than Bertie Woosters.
So what does this mean for advertisers?
This, and the supporting results of another survey reported the same day – Shullman Research Center’s Luxury and Affluence Monthly Pulse – suggest a number of differences in purchasing and media patterns that advertisers selling to the rich can take advantage of:
- The rich like owning things, placing a premium “on ‘ownership’ investments extending beyond equities to include a strong interest in real estate, gold, commodities and private equity funds,” Kraus notes.
- They’re heavy readers, particularly of financial media.
- The media they use are the more traditional ones. They skew lower on social media, according to Ipsos. And according to MediaPost, the Shullman study shows that in their media use “television is still number one, and magazines are number three for potential reach, Magazines and television were second and third, respectively, for potential effectiveness.”
- They actually read in-flight magazines. “According to Shullman, among all Americans planning to buy luxury [goods and services], advertising ‘inside airplanes’ tops the list of potential platforms for generating interest,” MediaPost reports. “But that channel reaches only 8 percent of all adults planning to buy luxury goods or services.”
If you have luxury products to sell, whether you’re targeting millionaires, Affluents or wannabes, selling the right product to the right audience in the right media won’t hurt.