Advertising Effect on Consumer Rental Patterns9 Sep, 2004 By: Melinda Saccone
There has been a noticeable increase in advertisements for discs in the past year — most of them exhorting consumers to buy — and this is also appearing to influence consumers' rental patterns.
According to Video Store Magazine's 2004 Consumer Home Entertainment Study, nearly two-thirds of the 600 households surveyed said they are likely to rent a DVD based on an advertisement they had seen or heard.
On a scale of 1 to 10, with 10 perfectly describing their choice to rent a particular DVD after they'd seen or heard an advertisement for the disc, consumers rated the effect of advertising on their rental choice at 6.54.
High-frequency renters (those who rent at least once a week) were the most likely to say they rent based on an advertisement (7.68).
Advertising had a greater effect on multiple DVD player households than their single DVD household counterparts as more video activity generally occurs in the former.
Length of hardware ownership also affected consumers' response to advertising. The longer consumers had owned their DVD players, the more likely they were to have rented based on an ad.
Pay-per-view (PPV) users and satellite owners were more likely to rent based on advertising than their unconnected counterparts. PPV users gave advertising influence a score of 6.98, while those who have not used PPV scored 6.23.
So where are advertisers and retailers getting the most bang for their buck?
According to the study, women were much more receptive to disc advertising than their male counterparts. Females gave advertising's effect on their rental decision a score of 6.83. By comparison, males were well under the overall average of 6.54, scoring ad influence at 6.14.
Age also played an important factor in consumers' receptiveness to advertising. Those in their 20s and younger were most likely to rent a DVD after seeing or hearing an ad, followed by those in their 30s. Advertising's influence on rental choice dropped off quickly for those 40 or older.
Households with incomes between $40,000 and $99,000 were the most heavily influenced group. At the bottom of the spectrum were households with incomes of more than $100,000 and households earning less than $20,000.
Latinos and African-Americans were much more receptive to advertising than their white counterparts, ranking advertising's influence on their rental decision at 7.28, 7.36 and 6.34 respectively.
Latinos and African-Americans collectively account for more than one-fourth of the U.S. population according the U.S. Census Bureau. These two groups are gaining in importance as they continue to grow in size. Their buying power is expected to nearly double by 2009. According to the Selig Center for Economic Growth at the University of Georgia, the combined buying power of these two groups will surpass $1.4 trillion in 2004 and is expected to reach nearly $2 trillion by 2009.