The Demographics of Cool

One of the cornerstone products that helped to shape Steve Jobs’s legacy, the iPod, just turned 10. It’s hard to believe now, but that ultramodern white half-pound jukebox with the touch wheel, which became the aughts’ harbinger of cool, was not instantly successful. It sold 150,000 units in its first nine months. (Compare that with the 190,000 sales per day that the iPhone has averaged for the past year.) Marketing pundits will say that iTunes turned things around, but Apple’s music delivery service underwhelmed at launch, too—only running on Macs and branded with a Beatles-era guitar at a time when the kids were listening to Usher. What really, finally made the iPod—and iPod owners—cool was hip-hop. As Steve Stoute, record exec turned advertising legend, tells it in his smart, entertaining book The Tanning of America: How Hip-Hop Created a Culture That Rewrote the Rules of the New Economy, Apple agreed to underwrite production of new videos from Interscope Records in return for product placement of iPods in those videos. The hottest artist in the world right then was Interscope’s rapper 50 Cent, and the highly anticipated video for his song “P.I.M.P.” started with him holding his iPod. Close-up on the product: He spins the dial until the menu highlights “Playlists.” Click. What follows is a vision of limitless, decadent luxury. “Not many could afford the fantasy life,” writes Stoute, “but they could afford the iPod.” Suddenly, “artists were calling up Interscope asking to get their hands on the devices. Once in the hands of the tastemakers, consumers gravitated en masse to Apple’s offerings.” Stoute does not include this anecdote in Tanning to showcase a smart cross-cultural or multicultural marketing strategy, which effectively draws in different demographic groups. No, this is about the devolution of those groups and what that means for marketers. Just look at the data. The 2010 census shows a smudging of traditional demographic lines—whether it’s distribution of urban-suburban populations or the growth in multiracialism. People who list themselves as of two or more races (not including Hispanic) now make up a not-insignificant 3% of the total population (more than 9 million people). And the category grew 30% between 2000 and 2010 (46% for those younger than age 18). What’s more, technology is helping us identify new, more complex “demographic” groups. With so much information collected, crunched, recrunched, and cross-tabbed, marketers have to see that what defines us and what we buy no longer maps easily to traditional categories. Patchwork Nation (patchworknation.org), run by the not-for-profit Jefferson Institute, has, for example, come up with 21 new divisions to describe us. The “Boom Town” type is someone who lives in a “fast-growing community with a rapidly diversifying population.” The “Shifting Middle” refers to people in “middle income districts in established suburbs and midsize cities [with] mixed ethnic populations and a growing Latino presence.” These categories offer a more nuanced look at the U.S. population, and they can reshape our understanding of current events. When others were reporting bad news in foreclosures this past fall, Patchwork saw good news in Boom Towns, which have in the past served as leading indicators for the site’s analysts. Still, Tanning is about more than just high-def demography. Stoute is arguing that out of hip-hop a new culture has emerged, one “shared mental complexion” that no demographics—not even Patchwork’s—can capture. Age, race, and income don’t matter. Location doesn’t matter. Only the mind-set matters. The Ivy League sophomore from Oregon, the 34-year-old Indian-born waiter in Queens, and the 16-year-old kid from Alabama may all be part of the same target market, all mentally “tan.” In a tan world, urban has nothing to do with place or race and everything to do with attitude. Stoute is as likely to see urban consumers in the O.C. as he is in D.C. These tan consumers, defined by hip-hop culture, choose what becomes cool and, more crucially, decide when something isn’t cool anymore. The iconic story is the one in which an exec at the company that sells Cristal champagne tries to distance the product from hip-hop, resulting in a boycott led by rapper and media mogul Jay-Z, who ends up investing in a competitor’s champagne, which immediately becomes a top seller and critical darling. Cristal, Stoute notes, hasn’t recovered its market share. Another theme that should scare marketers is the uselessness of analytics. The more you honor the tan psychographic, Stoute argues, the more meaningless the demographic data and quantitative research become. And when you define a market not by who’s in it but rather by how the people in it think, marketers have a far more complicated and expensive job. Suddenly, “female” and “affluent” are replaced with “adaptive mind-sets” and “people who seek authenticity.” “No longer can advertising lecture or dictate to customers; marketing to the group conversation—the megalogue—must be seamlessly incorporated.” The business heroes in Tanning are the ones who succeed by actively ignoring data and by “marketing to the megalogue”: the ubiquitous, constant conversation among trendsetting tan consumers. Part memoir, part history of hip-hop, part marketing playbook, Tanning is not technically a business book, but it is a book about business. Same goes for Those Guys Have All the Fun: Inside the World of ESPN, an exhausting oral history compiled by James Andrew Miller and Tom Shales that chronicles the ascendance of the sports media dreadnought. It’s harder to find the management lessons here amid all the narcissistic alpha male preening and insecurity, but they’re in there, and they’re similar to Stoute’s. Most of ESPN’s successes—from its founder’s counterintuitive bets that there was a demand for an all-sports channel right on down to its current coolest show, Pardon the Interruption (PTI) —are ones that demographics and analytics didn’t predict and can’t explain. PTI ’s executive producer Erik Rydholm recalls a colleague saying to him: “You have two old guys sitting around the table talking about sports. That is the antithesis of everything all of our market research tells us that people are interested in….Why do you think that this is going to work?” Rydholm responded: “Because no one showed me that research before I decided to take the job.” It’s no accident that Stoute, who focuses on hip-hop, is talking about the same phenomena as ESPN programmers, who focus on sports. Sports defy demographics more than any other product. Fandom is innately tan. Marketing to, say, Newâ€¯England Patriots fans requires understanding a shared attitude much more than it requires income and gender splits. Stoute shows any number of struggling or dying brands that become cool, as ESPN did, by marketing to a mind-set: Adidas, Reebok, Ray-Ban, Cadillac, McDonald’s. And Apple. Following its deal with Interscope, Apple sold 28 million iPods in 24 months and grabbed three-quarters of the nascent digital music business. Earnings have quadrupled. That deal spawned another important change at Apple, too. According to Stoute, Jimmy Iovine, Interscope’s chairperson, told the company’s execs that they should rebrand iTunes, get away from its boomer Guitar Hero sensibilities. Apple did, creating the now-iconic silhouetted hipsters sporting white earbuds, striking poses on bus shelters and billboards, and dancing to hit songs in TV ads. You can’t tell if those silhouettes are 18 or 34 years old, rich or poor, black, white, or Asian, from Brooklyn or from Tokyo. All you know for sure is that they’re cool.

The Demographics of Cool

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