Finding Opportunity Online with the Mass Affluent

FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT

FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT Copyright © 2014 The Nielsen Company 1 FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT In the face of economic recession and recovery, consumers have struggled to retain the wealth they amassed during brighter days. Median wealth among U.S. consumers diminished to only $14,450 in 2012, but rose to $17,050 in 2013—a positive sign of economic recovery. Those who have managed to weather the economic storm and retain their assets represent significant consumer spending power in the marketplace.

Online marketers with goods or services to sell are likely looking for consumers with spending power. With sizable bank accounts and liquidity, the Mass Affluent is a good place for them to start. Nielsen defines the Mass Affluent as those households with $250,000 to $1,000,000 in liquid assets, excluding real estate.

The Mass Affluent may only represent 12 percent of U.S. households, but they have massive spending power, making them an attractive consumer segment for retailers and financial institutions. However, this wealthy group is highly concentrated and difficult to reach, especially through traditional direct marketing channels, such as print, mail and phone. Despite the challenges that traditional channels present, the Mass Affluent have a strong online presence, and digital precision marketing has become an effective way to reach this valuable audience.

2 FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT MASS AFFLUENT REVISITED

INCOME PRODUCING ASSETS BETWEEN $250K-$1M (MEDIAN IPA = $452,750)

TWO-THIRDS ARE OVER AGE 55

SUBURBAN EMPTY NESTERS

MEDIAN HH INCOME = $87,500

WORK IN FINANCE, MANAGEMENT, OWN BUSINESSES, OR RETIRED

PRIMARILY CAUCASIAN, ABOVE AVERAGE LIKELIHOOD TO BE ASIAN

AVID READERS – ONLINE & PRINT

SIZING WEALTH

PERCENTAGE OF U.S. PERCENTAGE OF HOUSEHOLDS TOTAL WEALTH

6% 13% 12%

82% 61% 26%

MASS MARKET MASS AFFLUENT AFFLUENT (IPA $1M+) (IPA <$250K) (IPA $250K- $1M)

Source: Nielsen Financial Track, Q1-Q3 2013

FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT Copyright © 2014 The Nielsen Company 3 WEALTH MATTERS AS MUCH AS INCOME Finding wealth presents challenges, but understanding the affluence landscape is essential in identifying key segments of the population that have the ability to spend. Wealth is concentrated in a relatively small group of households, and thus hard to pinpoint. Nielsen measures consumer income-producing assets as an important indicator of liquid wealth. Nielsen Income Producing Assets (IPA) includes the value of checking accounts, savings products, money market accounts and CDs, investment products, retirement accounts, and other asset classes that are relatively easy to liquidate, and does not include the value of any real estate owned by the household.

Other measures like age and income do not give us this refined view of the population. High household income does not necessarily indicate high wealth and thus greater ability to spend. Among those with over $100K household income, only about half have assets that exceed $100K. And among those with over $100K IPA, only about half have $100K or more household income.

Wealth represents financial stability and is a truer measure of the ability and confidence to spend than income alone, especially on big-ticket items like cars, homes and luxury goods.

4 FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT THE MASS AFFLUENT ONLINE The Mass Affluent are spending much of their time online. In addition to going online to keep tabs on their finances, the Mass Affluent are also more likely than the average consumer to visit websites that reflect their interest in sports, including the U.S. soccer site (www.ussoccer.com), as well as home, travel and food websites, like the Food Network. And, they’re not just visiting these sites; they’re making purchases online related to these interests. The Mass Affluent purchase sporting goods as well as appliances and housewares online at a higher rate than the average consumer.

These heavy travelers also make most of their travel plans online, spending on airline and hotel reservations. The Mass Affluent (still in the workforce) are at the height of their careers with heavy business travel. They access the Internet from their homes, offices and hotels while on business trips. And, these avid readers purchase books, e-books and e-readers online as well. Despite being tech-savvy and comfortable using technology, the Mass Affluent are disproportionately concerned about Internet privacy and security, using spyware and antivirus software to keep their computers and private information safe.i

TOP INDEXING ONLINE CATEGORIES FOR THE MASS AFFLUENT

154 151 147 142 132

SPORTS FINANCIAL FOOD HOME TRAVEL

The Average Household Index = 100. Therefore, the Mass Affluent are 54% more likely than average to frequent sports-related sites online. Source: Nielsen @Plan, Q2 2013

iNielsen @Plan, Q2 2013

FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT Copyright © 2014 The Nielsen Company 5 Within the Mass Affluent, those who are working and those who are retired use the Internet for different purposes. Those still in the workforce tend to use the Internet for news, sports and research while the retired Mass Affluent tend to play online card games, trivia and gamble. Those still in the workforce are more tech savvy than their older counterparts, owning four or more home computers and exhibit a higher propensity to use Mac/Apple computers. The less tech-savvy, retired Mass Affluent have only one computer in the home and tend to use AOL.ii However, both subsets of these savvy consumers use the Internet for financial considerations. The working Mass Affluent are 40% more likely than the average consumer to monitor their investments and stocks online while the retired Mass Affluent are 84% more likely than the average consumer.iii Understanding the Mass Affluent’s online behavior is vital to understanding how to engage with these key consumers.

TOP 10 ONLINE ACTIVITIES FOR WORKING MASS AFFLUENT AND RETIRED MASS AFFLUENT

WORKFORCE MASS AFFLUENT RETIRED MASS AFFLUENT

Read Political News (index = 141) Monitor Investments/Stocks (index = 184)

Monitor Investments/Stocks (index = 140) Look at High School/College Alumni Info (index = 143)

Watch Online Sports Videos (index = 129) Research Politics/Campaign Info (index = 140)

Read Books Online (index = 121) Access Personal Healthcare Info Managed Online (index =133)

Research Product Purchase for Home (index = 119) Use Yellow Pages/Local Search (index = 132)

Use Work E-Mail (index = 117) Pay Bills Online (index = 128)

Access Personal Healthcare Info (index = 116) Play Board/Card Games Online (index = 126)

Use Online Wallet/Payment Services (index = 114) Play Puzzle/Trivia Games Online (index =122)

Research for New/Used Car Purchase (index = 114) Play Online Casio/Gambling (index = 120)

Read Sports News (index = 114) Download Online Coupons (index = 118)

An index of 100 = average propensity to exhibit the behavior. For example, an Index of 141 means that they are 41 percent more likely than the average consumer to read Political News.

Source: Nielsen @Plan Q2 2013

iiNielsen @Plan, Q2 2013 iiiNielsen @Plan, Q2 2013

6 FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT FIND AND REACH THE MASS AFFLUENT ONLINE The Mass Affluent are valuable–but pinpointing them online presents challenges. These savvy consumers are a smaller portion of the population at 12% of U.S. households, so broad sweeping marketing efforts are not efficient in reaching this group. Precision marketing provides a more accurate means of finding and reaching these likely big ticket spenders.

Precision marketing isn’t anything new–it’s been done via television, outdoor and print for years, yet precision marketing is now digitally enabled and extremely effective at reaching niche audiences. Key consumer segments like the Mass Affluent can be identified and activated online, and media can be purchased against these groups through the Nielsen Digital Alliance Network. Once activated, key consumer segments can be reached online and performance of these campaigns can be easily measured.

REACH YOUR AUDIENCE

REACH THE MASS AFFLUENT ACTIVATE AND MEASURE PERFORMANCE ONLINE

IDENTIFY PLACE YOUR MEDIA BUY THROUGH THE YOUR BEST NIELSEN DIGITAL CONSUMERS ALLIANCE NETWORK

ACTIVATE THE MASS AFFLUENT

FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT Copyright © 2014 The Nielsen Company 7 PRECISION WHILE PRESERVING PRIVACY Digital precision marketing is unique and can be done easily and accurately via cookie technology. With this approach, offline segmentation can be taken online with the help of third-party data on- boarders. Consumers can be tagged for wealth metrics like IPA, as well as syndicated lifestyle segmentation like Nielsen PRIZM, significantly increasing the likelihood of reaching the intended audience. Use of segmentation preserves privacy as only segment assignments are stored rather than personal information. This approach expands the pool of potential customers from only those who are in-market to all online consumers who fit certain behavioral and lifestyle characteristics. Instead of focusing on only the Mass Affluent who have visited a particular website, the entire Mass Affluent population can be found and reached online with display advertising, online video and mobile. And Nielsen knows how the Mass Affluent are spending their time online, which sites they are visiting, and how they are using those sites for a 360-degree view of the consumer.

8 FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT HOW NIELSEN DIGITAL PRECISION MARKETING WORKS

ALL INTEGRATED PERSONALLY COOKIES AND SENT ARE USED TO NIELSEN SENDS IDENTIFIABLE TO ONLINE INFORMATION SERVE DISPLAY DIRECTORIES PLATFORM (AD ADVERTISING, TO “DATA ON- IS STRIPPED NETWORKS, OUT AND ONLY ONLINE VIDEO BOARDERS” DSPs & AND MOBILE SEGMENT # IS PUBLISHERS STORED

NIELSEN DIRECTORIES/ ADDRESS MATCH

3RD PARTY “DATA ON-BOARDERS” MATCH OFFLINE DATA TO COOKIES

24 1

63 4 13

FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT Copyright © 2014 The Nielsen Company 9 Digital shouldn’t be viewed in a vacuum. Cross (multi) screen dynamics are an important component to success with digital precision marketing. Consumers are exposed to content on many devices from TVs to smartphones to PCs, and the Mass Affluent are no exception. The most successful campaigns blend digital efforts with more traditional precision marketing mediums like television.

In a recent brand study conducted for an upscale automotive manufacturer, a group of consumers were exposed to an advertisement on TV only, online only, or both TV and online. Consumers who were exposed to both the TV advertisement and the online advertisement had the highest brand recall, 1.2 times higher than those exposed to TV only, demonstrating superior results when consumers are reached across mediums.

AD RECALL IS HIGHEST AMONG THOSE EXPOSED VIA TV & ONLINE

64%

59%

54%

TV ONLY ONLINE VIDEO ONLY TV & ONLINE VIDEO

10 FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT MEASURING SUCCESS The impact and success of digital precision marketing in finding and reaching distinct groups of consumers, like the Mass Affluent, can be easily measured as the digital landscape is highly connected. Digital precision marketing can be measured throughout the consumer purchase journey. Impact can be quantified by tracking consumer awareness through direct response metrics like click-through, understanding online intent and capturing impact on retail sales.

IMPACT CAN BE MEASURED THROUGHOUT CONSUMER PURCHASE JOURNEY

MEASURE ONLINE CAMPAIGN RATINGS REACH

EFFECTIVENESS, MEASURE RECALL AND RESONANCE INTENTION

IMPACT ON MEASURE RETAIL REACTION SALES

FINDING OPPORTUNITY ONLINE WITH THE MASS AFFLUENT Copyright © 2014 The Nielsen Company 11 HOW NIELSEN CAN HELP: SUCCESSFUL DIGITAL CAMPAIGNS REVISITED Example 1: Nielsen has built expertise in implementing successful digital campaigns to reach hard-to-find segments like the Mass Affluent. To illustrate, Nielsen worked with a major book publisher who was releasing a new Sci-Fi title, but they were challenged with a short, seven day promotional window. Lifestyle segmentation was used to zero in on younger consumers who had recently purchased a Sci-Fi book as the intended audience for the campaign. Using digital precision marketing in conjunction with lifestyle segmentation, they we able to produce a successful online campaign for the book publisher. Success for this campaign was determined by reach, measured by click-through rates. Click-through rates were 17 times higher than the industry average on the first day of the campaign and continued on throughout the weeklong campaign.

Example 2: Nielsen also helped a telecommunications company increase customer acquisition rates and increase online sales using lifestyle segmentation to classify consumers by their likelihood to adopt new technologies like smartphones and tablets. Using digital precision marketing in combination with consumer levels of new technology adoption, the telecommunications company was able to find its best segments online and implement a successful campaign against these consumers. Success for this campaign was determined by reaction, measured by conversion rate. Consumers exposed to the digital advertisement showed a 300% lift in conversion, confirming that consumers exposed to relevant advertisements convert at a higher rate.

12 CONCLUSION Nielsen can help you to understand, find and reach the Mass Affluent, a valuable portion of the population with money to spend. The Mass Affluent are only 12% of U.S. households, but they control 26% of total wealth in the U.S. However, given their small size, finding this distinct segment requires focused efforts. These wealthy consumers should be found and reached where they’re spending their time–online handling their finances or monitoring their favorite sports teams. Digital precision marketing efforts can be deployed to find and reach the Mass Affluent online, and the impact of these efforts can be measured to gauge success.

ABOUT NIELSEN

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