Are boomerang kids the “new normal” now?

I’ve blogged before about how the Great Recession and resulting high unemployment rates drove a significant number of young adults back into their childhood homes — or relying on Mom and Dad for financial support at least. It affected millions of young adults.

The economy and job prospects have been steadily improving since those dark days – even if the improvement hasn’t been as rapid as people would like to see …

But here’s an interesting finding: Those new jobs and the improving economy haven’t resulted in the kids moving back out of the house.

In fact, two studies conducted by the Pew Research Center in 2016 have determined that “living with parents” is now the single most common living arrangement for America’s 18-34 year olds.

That is correct: Instead of living with a spouse, a partner, a roommate or on his or her own, the largest single segment of millennials lives full-time with parents.  The phenomenon is most prevalent in Connecticut, New Jersey and New York, where it’s no coincidence that the cost of living is much higher than the national average.

For marketers, this means that the once-coveted 18-34 year-old cohort is today made up of many people who are consuming other people’s resources (e.g., the resources of their parents) rather than making all of their own purchase decisions and spending their own money.

Furthermore, Pew Research has determined that living with parents isn’t merely about employment (or the lack thereof). Over the past eight years, adults age 18-34 have continued to move back home in greater numbers — even as more of them have been able to find jobs.

The Pew findings suggest yet another surprising trend that appears to be in the making – that this is the first American generation where a large portion of the people won’t ever purchase a home.

It’s easy to figure that trends of this kind are transitory. But Pew cautions that the trends may well be more fundamental than the implications of an economic recession.  Instead, there are broader cultural dynamics at play – as well as the long-term challenges of economic independence for this generation of people.

The implications for marketers are intriguing, too.  For some, it will mean placing more emphasis on marketing initiatives aimed at parents, who are the now ones making purchase decisions within a larger multi-generational household — often one that stretches over three generations rather than just two.

And consider these dynamics as well: How do young adults and their parents work through multi-generational purchase decisions?  What are the most effective ways to target and reach multiple generations living under one roof who are making coordinated purchase decisions?  Maybe the old ideas of targeting each audience separately no longer make as much sense as before.

One thing’s for sure – it’s risky for marketers to wait for a return to normal … because that “normal” likely isn’t coming back.  Better to come up with new tactics and new messaging to reach and influence buyers in the new multi-generational environment.

Is the Phenomenon of “Fake News” Overhyped?

fnIn the wake of recent election campaigns and referenda in places like the United States, the United Kingdom, France, Austria and the Philippines, it seems that everyone’s talking about “fake news” these days.

People all across the political and socio-economic spectrum are questioning whether the publishing and sharing of “faux” news items is having a deleterious impact on public opinion and actually changing the outcome of consequential events.

The exact definition of the term is difficult to discern, as some people are inclined to level the “fake news” charge against anyone with whom they disagree.

Beyond this, I’ve noticed that some people assign nefarious motives – political or otherwise – to the dissemination of all such news stories.  Often the motive is different, however, as over-hyped headlines – many of them having nothing to do with politics or public policy but instead focusing on celebrities or “freak” news events – serve as catnip-like clickbait for viewers who can’t resist their curiosity to find out more.

From the news consumer’s perspective, the vast majority of people think they can spot “fake” news stories when they encounter them. A recent Pew survey found that ~40% of respondents felt “very confident” knowing whether a news story is authentic, and another ~45% felt “somewhat confident” of that fact.

But how accurate are those perceptions really? A recent survey from BuzzFeed and Ipsos Public Affairs found that people who use Facebook as their primary source of news believed fake news headlines more than eight out of ten times.

That’s hardly reassuring.

And to underscore how many people are using Facebook versus more traditional news outlets as a “major” source for their news, this BuzzFeed chart showing the Top 15 information sources says it all:

  • CNN: ~27% of respondents use as a “major source” of news
  • Fox News: ~27%
  • Facebook: ~23%
  • New York Times: ~18%
  • Google News: ~17%
  • Yahoo News: ~16%
  • Washington Post: ~12%
  • Huffington Post: ~11%
  • Twitter: ~10%
  • BuzzFeed News: ~8%
  • Business Insider: ~7%
  • Snapchat: ~6%
  • Drudge Report: ~5%
  • Vice: ~5%
  • Vox: ~4%

Facebook’s algorithm change in 2016 to emphasize friends’ posts over publishers’ has turned that social platform into a pretty big hotbed of fake news activity, as people can’t resist sharing even the most outlandish stories to their network of friends.

Never mind Facebook’s recent steps to change the dynamics by sponsoring fact-checking initiatives and banning fraudulent websites from its ad network; by the accounts I’ve read, it hasn’t done all that much to curb the orgy of misinformation.

Automated ad buying isn’t helping at all either, as it’s enabling the fake news “ecosystem” big-time. As Digiday senior editor Lucia Moses explains it:

“One popular method … is tapping the competitive market for native ad widgets. Taboola, Revcontent, Adblade and Content.ad are prominently displayed on sites identified with fake news, while there are a few retargeted and programmatic ads sprinkled in. Publishers install these native ad widgets with a simple snippet of code — typically after an approval process — and when readers click on paid links in the widget, the host publisher makes money.  The ads are made to appear like related-content suggestions and often promote sensational headlines and direct-marketing offers.”

So attempting to solve the “fake news” problem is a lot more complicated than some people might realize – and it certainly isn’t going to improve because of any sort of “political” change of heart. Forrester market analyst Susan Bidel sums it up thus:

“While steps taken by … entities to curb fake news are admirable, as long as fake news generators can make money from their efforts, the problem won’t go away.”

So there we are. Bottom-line, fake news is going to be with us for the duration – whether people like it or not.

What about you? Do you think you can spot every fake news story?  Or do you think at least of few of them come in below radar?

For many people, what’s “breaking news” isn’t breaking on traditional news media outlets.

First it was Jon Stewart. Now it’s social media. 

(AP)
(AP)

If you suspect that Americans are increasingly getting their news from someplace other than the standard TV/cable, print and online news outlets, you’re right on the money.

In fact, research conducted by the Pew Center in association with the Knight Foundation during 2015 reveals that the share of people for whom Facebook and Twitter serve as a source of news is continuing to rise.

More specifically, nearly two thirds of the 2,000+ Americans age 18 and older surveyed by Pew (~63%) reported that they’re getting news reporting from Facebook.

A similar percentage reported receiving news from Twitter as well.

That compares with ~52% reporting that they received news from Twitter back in 2013 … and ~47% from Facebook.

Although both of these social networks now have the same portion of people getting news from these two sources, the Pew research discovered some nuanced differences as to their strengths.

smnA far bigger portion of people follow “breaking news” on Twitter compared to Facebook (~59% versus ~31%), which underscores Twitter’s strength in providing immediate “as-it-happens” coverage and commentary on live events.

Seeing such behaviors, it shouldn’t come as any surprise that both social networks have been implementing more initiatives that strengthen their positions as news sources even more:

  • Facebook has launched Instant Articles, a functionality that allows media companies to publish stories directly to the Facebook platform instead of linking to outside websites.
  • Facebook has also introduced a new Trending sidebar that allows users to filter news by major topic categories such as sports, entertainment, politics, technology and science.
  • Twitter has introduced live events to its roster, thanks to its purchase of the live video-streaming app Periscope.
  • A related Twitter initiative, dubbed Moments (aka: Project Lightning), allows anyone – even a person without a Twitter account – to view ongoing feeds of tweets, images and videos pertaining to live events.

According to Pew, news exposure is on social media roughly equal among all demographic factors including gender, ethnicity and income. The one exception, of course, is age.

All of these developments underscore the fact that the “traditional” TV, print and online outlets are no longer dominant when it comes to news consumption. And it’s highly unlikely that the trend will ever be reversed, either.

The Sanders/Trump phenomenon: A view from outside the United States.

photo1This past Tuesday evening as I watched Bernie Sanders and Donald Trump vanquish their rivals handily in the New Hampshire presidential primary election, I received an e-mail from my brother, Nelson Nones, with his observations on “what it all means.”

As someone who has lived and worked outside the United States for years, Nelson’s views are often quite perceptive — perhaps because he is able to look at things from afar and can see the “landscape” better than those of us who are much closer to the action.

Call it a “forest versus trees” perspective.

And when it comes to the 2016 presidential election, it is Nelson’s view that the Sanders/Trump phenomenon is absolutely real and not something based on personality or celebrity — for good or for ill.

Shown below is what Nelson wrote to me.

… On the Underlying Dynamics

For context into what’s happening in the United States, the Pew Research Center’s recent report on the wealth gap in the United States is instructive.

In a nutshell, over the past 30 years Pew’s data points reveal: 

  • Upper-income families currently represent ~20% of the total, and their wealth (measured by median net worth) has doubled. 
  • Middle-income families represent 46% of the total. Their wealth barely changed (up 2%). 
  • Lower-income families therefore represent ~34% of the total, but their wealth fell 18%.

Now, after the end of the Cold War in 1992 until the onset of the Great Recession in 2007, the wealth of all three groups did rise, albeit by varying degrees: 

  • Upper-income by 112%
  • Middle-income by 68%
  • Lower-income by 30%

Here’s how they fared during the Great Recession (2007-10): 

  • Upper-income wealth declined by 17%
  • Middle-income wealth fell by 39%
  • Lower-income wealth fell by 42%

And after the Great Recession:

  • Upper-income families recovered 36% of their wealth lost during the Great Recession
  • Middle-income families recovered none
  • Lower-income families lost an additional 7% relative to their wealth in 2007

So, if we assume wealth to be a proxy for the feeling of well-being, then one could surmise that ~80% of American families feel like victims today — of which nearly half feel they are still being victimized.  

… On “Anger”

Are people feeling angry about this? You bet.   

Who are they going to blame? The other ~20% and foreigners, of course. 

Never mind the exculpatory hard data proffered by defenders of the nation’s elites revealing that big banks paid back all the bailout money they received during the Great Recession, or that bankers cannot be jailed for their alleged misdeeds unless and until proven guilty by jurors in courts of law (like anyone else), or that pharmaceutical companies’ margins on $45 billion of profit, at 12%, aren’t “quite” as obscene as they appear at first glance.   

None of those facts can ever restore wealth that’s been lost and never recovered, or is still falling. When you feel like a victim, such hard data are utterly and completely irrelevant.  

Both Bernie Sanders and Donald Trump are tapping into this anger with great success. As I watched both Sanders’s and Trump’s victory speeches, to vastly oversimplify, here is what I heard.  Sanders essentially said:

“It’s not fair that most Americans can’t get ahead or are falling behind. I’ll expropriate money from the rich by taxing Wall Street bankers and give it to you in the form of free tuition, student debt restructuring, lower healthcare costs and single-payer healthcare!” 

Trump essentially said:

“Political hacks are negotiating bad deals, letting China, Japan and Mexico take our money away from us every day. As the world’s greatest businessman, I’ll negotiate great deals fast to give you universal healthcare, and beat these countries so you get your money back – without having to share it with all those illegal immigrants!”

Photo2In my view, what both Sanders and Trump recognize is that ~80% of American families may have lost 40% of their wealth since 2007 with little or no hope of recovering it … but they haven’t lost any of their voting power.  

It makes no difference that the prescriptions offered by Sanders and Trump – squeezing money from Wall Street, China, Japan and Mexico, for example – are nonsense. As a lawyer I once knew always said, “Winning isn’t everything; it’s the only thing.”  To have any chance of accomplishing something useful (or not) as President, you have to win first.   

… On Populism being the Winning Ticket

In this election, under present circumstances, populism is a sure winner. 

The wealthiest ~20% of families (Democrats as well as Republicans) who represent the “establishment” in the eyes of the angry Sanders and Trump crowds, don’t quite smell the coffee yet.  

The angry crowds are out for money this election cycle, and I believe they hold enough votes to elect one of the two populist candidates (Sanders or Trump) who is promising “money.”   

… Not “experience,” “pragmatism,” “conservativism,” “liberalism,” “socialism,” “limited government,” “feminism,” “pro-life,” “pro-choice,” “pro-LGBT,” “hope,” “change,” or whatever.  But money.

To protect as much of their wealth and status as they can, the elites have little choice but to scuttle their aspirational platitudes and learn to deal with it.

So there you have it — a view of the presidential election from the outside looking in. I think there’s food for thought here — and very possibly a look at where we’ll be in another nine months.

What do other readers think? Agree or disagree?  Please share your observations here.

The disappearing American middle class? The Pew Research Center weighs in.

mcIn this political season in the United States — when is it ever not, one wonders? — we hear many of the presidential candidates refer to the so-called “crisis” of the middle class.

It matters not the political party nor ideological stripe of the candidate, we hear copious references to “the disappearing middle class” … the “middle class squeeze” … and that the middle class is “just getting by.”

Considering that the middle class income group represent the single largest block of voters in the country, it isn’t at all surprising that the presidential contenders would talk about middle class issues — and to middle class voters — so frequently.

The question is … is the hand-wringing warranted?

PewWell, if one believes a new Pew Research study on the subject, it may well be the case.

Based on its most recent analysis of government data going back nearly 50 years, Pew reports that there are now fewer Americans in the “middle” of the economic spectrum than at the lower and upper ends.

This is a major development, and it is new.

Pew defines a middle class household as one with annual income ranging from ~$42,000 to ~$126,000 during 2014. Using that definition, Pew calculates that there are now 120.8 million adults living in middle class households, but 121.3 million who are living in either upper- or lower-income households.

Pew characterizes this new set of figures as a kind of tipping point. And it helps to underscore the narrative wherein certain presidential candidates — you-all know which ones — are tapping into a collective “angst” about the decline in middle-income families, and the notion that they are falling behind compared to upper-income adults while unable to access many of the support services available to lower-income households.

Looking at things in a bit more depth, however, one can find explanations — as well as other data points that go against the “narrative” to some degree. Consider the following:

  • Senior citizens have done quite well shifting into the upper category since the 1970s — their share increasing by well over 25% in the upper-income bracket.
  • African-Americans have experienced the largest increase in income status over the same period, meaning that their lower-income category share is lower today.
  • The rapid rise in the number of immigrants in the late 20th century has pushed down median incomes because those new arrivals, on average, make less in income.

I suspect the Pew study findings will be fodder for more discussion — and perhaps some additional sloganeering — in the upcoming weeks and months. But you can judge for yourself whether that’s warranted by reviewing more findings from Pew’s report here.

If you have your own perspectives about what’s happening with (or to) the middle class, I’m sure other readers would be quite interested in hearing them.  Please share your comments here.

Surprising statistic? One-third of American adults still aren’t on social media.

social mediaFor the many people who use social media on a daily basis, it may seem inconceivable that there are a substantial number of other Americans who aren’t on social media at all.

But that’s the case. The Pew Research Center has been tracking social media usage on an annual basis over the past decade or so, and it finds that about one-third of Americans still aren’t using any social networking sites.

To be sure, today’s ~65% participation rate is about ten times higher than the paltry ~7% participation rate Pew found the first time it surveyed Americans about their social media usage back in 2005.

According to Pew’s field research findings, here’s how the percentage of social media involvement has risen in selected years in the decade since. (The figures measure the percentage of Americans age 18 or over who use at least one social networking site.)

  • 2006: ~11% using at least one social networking site
  • 2008: ~25%
  • 2010: ~46%
  • 2012: ~55%
  • 2015: ~65%

In more recent years, the highest growth in social media participation rates has been among older Americans (over the age of 65), ~35% of whom are using social media today compared to just 11% five years ago.

That still pales in comparison to younger Americans (age 18-29), ~90% of whom use social media platforms.

While it’s a common perception that women are more avid users of social media than men, Pew’s research shows that the participation rate is actually not that far apart. Statistically it isn’t significant, in fact: a ~68% social media participation rate for women versus ~62% for men.

pew-research-centerSimilarly, there are more similarities than differences among the various racial and ethnic groups that Pew surveys — and the same dynamics are at work when it comes to differing education levels, too.

Regional differences in social media practice continue to persist, however, with rural residents less likely to use social media than suburban residents by a ten-point margin (58% versus 68%). City dwellers fall in between.

More details on Pew’s most recent field research on the topic of social media participation can be accessed here. See if you notice any surprising findings among them.

Fast Fade: Unpaid brand posts on Facebook are getting rarer by the day.

Lower ReachIt was just a matter of time.

Once Facebook ramped up its advertising program in order to monetize its platform and mollify its investors, unpaid posts by companies and brands were sure to be the collateral damage.

Sure enough, the recent monthly stats show that the “organic reach” of unpaid content published on company and brand pages on Facebook has been cut in half from where it was just a short time ago.

To illustrate, look at these stark figures gathered in an analysis by Ogilvy of 100+ country-level brand pages measuring the average reach of unpaid posts:

  • October 2013: 12.2%
  • November 2013: 11.6%
  • December 2013: 8.8%
  • January 2014: 7.7%
  • February 2014: 6.2%

What these stats show is that within the span of less than six months, the average reach of unpaid brand posts dropped by nearly 50%

To go even further, an anonymous source familiar with Facebook’s long-term strategy is claiming that its new algorithm could ultimately reduce the reach of organic posts to 2% or less.

Actually, the reason for the squeeze is more than just Facebook’s desire to increase advertising revenue.

Here’s a dynamic that’s also significant:  A Pew Research study conducted in mid-2013 found that the typical adult American Facebook user has around 340 friends.

That average is up nearly 50% from approximately 230 friends in 2010.

Of course, more friends mean more status updates eligible for feeds … and Facebook’s not going to display them all to everyone — even if it wanted to.

Also, Facebook users “like” an average of 40 company, brand, group or celebrity pages each, according to a 2013 analysis done by Socialbakers, a social media analytics firm.  That translates into an average of ~1,440 updates every month.

Compare those figures to five years ago, when the average number of page “likes” was fewer than five … yielding fewer than 25 monthly updates on average.

Clearly, there’s no way Facebook is going to to be able to display all of these updates to followers.  So … the content is squeezed some more.

The final nail in the coffin is the rise in “promoted” posts – the ones that brands pay dollars to promote. It’s only natural that Facebook is going to give those posts priority treatment.

Thus, the hat-trick combination of more friends, more likes and more promoted posts is what’s causing “organic” brand posts to go the way of the dodo bird.

In retrospect, it was only a matter of time before a major social platform like Facebook would seek to monetize its program in a big way.

In some respects, it’s amazing that the free ride lasted as long as it actually did …