“Mass affluence,” as a new white paper from Ad Age, the advertising industry’s top trade journal, has just declared, “is over.”
The Mad Men 1960s America — where average families dominated the consumer market — has totally disappeared, this Ad Age New Wave of Affluence study details. And Madison Avenue has moved on — to where the money sits.
And that money does not sit in average American pockets. The global economic recession, Ad Age relates, has thrown “a spotlight on the yawning divide between the richest Americans and everyone else.”
Taking inflation into account, Ad Age goes on to explain, the “incomes of most American workers have remained more or less static since the 1970s,” while “the income of the rich (and the very rich) has grown exponentially.”
The top 10 percent of American households, the trade journal adds, now account for nearly half of all consumer spending, and a disproportionate share of that spending comes from the top 10’s upper reaches.
“Simply put,” sums up Ad Age’s David Hirschman, “a small plutocracy of wealthy elites drives a larger and larger share of total consumer spending and has outsize purchasing influence — particularly in categories such as technology, financial services, travel, automotive, apparel, and personal care.”
America as a whole, the new Ad Age study pauses to note, hasn’t quite caught up with the reality of this steep inequality. Americans still “like to believe in an egalitarian ideal of affluence” where “everyone has an equal shot” at “amassing a great fortune through dint of hard work and ingenuity.”
In actual life, the new Ad Age study points out, “the odds of someone’s worth amounting to $1 million dollars” have shrunk to “1 in 22.”
The new Ad Age white paper makes no value judgments about any of this. The ad industry’s only vested interest: following the money, because that money determines who consumes.
“As the very rich become even richer,” as Ad Age observes, “they amass greater purchasing power, creating an increasingly concentrated market for luxury goods and services as well as consumer goods overall.”
In the future, if current trends continue, no one else but the rich will essentially matter — to Madison Avenue.
“More than ever before,” the new Ad Age paper bluntly sums up, “the wealthiest households will be the households with significant disposable income to spend.”