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Wednesday, Feb 28, 2024

Companies Vying for Booming New Market

Once considered to be the largest and most financially lucrative generation in America, baby boomers have lost their title to a younger group they know well: their own children.

Baby boomers’ kids, now some 80 million strong, are quickly supplanting their parents as the largest and most sought-after market, arguably becoming the most targeted demographic in America.

Cutting a wide swath across these kids, dubbed as either Echo Boomers or Generation Y, is the burgeoning action sports industry, those freewheeling youths who have taken skateboarding, surfing and motocross to new levels while simultaneously bringing snowboarding and mountain biking into the collective mainstream.

With more than 140 million participants worldwide and growing in participation levels by more than 30 percent every year, action sports is arguably the fastest-growing sports demographic.

In San Diego County, where youths grow up at the beach, in the mountains and near the desert, the local boom in action sports participants is no surprise.

Also growing is the number of companies looking to cash in on what’s grown well beyond a niche market. From the apparel firms selling the gear to media agencies seeking airtime for those products, as well as the host of action sports events, capturing the attention of free-spending youths is an extremely competitive business.

The purchasing power of youths is unmatched by past generations, spending more than $200 billion annually and influencing some $300 billion to $400 billion in expenditures.

“It is becoming more and more one of the spots to cover when you want to reach these (youth) audiences,” said Gregg Witt, a partner with Premise, a full-service action sports consulting and marketing agency based Downtown. “Even beyond consumer products, people that need to reach the youth market authentically are turning to youth marketing and action sports.”

Premise, which has worked with companies varying from Glaceau, which makes a product called Vitamin Water, to the U.S. Air Force, has experienced a 40 percent growth in the past year, with revenues projected to reach $2 million in 2005.

But the challenge for marketers often is as unorthodox as the demographic they are marketing to , advertising and implementing more cultural and lifestyle-based marketing campaigns.

“The majority of companies haven’t realized how to reach youths effectively or continually,” said Matt Martelli, the owner and creative director of Mad Media Design, an Oceanside-based multimedia agency that focuses on the youth/action sports market. “They fall into the same typical kind of patterns where they say, ‘We’ll throw money at this, we’ll throw money at this.’ ”

Companies must embrace the action sports lifestyle in order to authentically and effectively reach the market, Martelli said.

“Once they (youths) feel they are being marketed to, it’s over,” he said.

Martelli, who employs a staff of five, said companies large and small are steadily realizing the benefit in reaching out to the youth market.

“San Diego is a hotbed of youth culture,” Martelli said. “There are people in the Midwest who have never seen the ocean and are wearing a surf outfit.”

As action sports enthusiasts, Martelli and his staff can connect with youths on a peer-to-peer basis , something this generation is more likely to respond to, he said.

“A guy who is sitting on the hundredth floor of an office looks at a skateboard kid and says, ‘What a punk.’ And because we grew up in it, we are a part of the culture. It is something we totally preach.

“We surf, we skateboard, we ride motocross. We do all the things that we essentially sell. Those are our lifestyles,” Martelli said, adding that it’s crucial for brands to think the same way.

“We term it as cultural immersion,” he said. “What we do with brands essentially is bring them in and give them more realistic guidelines and goals.”

His 7-year-old company, which has worked with such high-profile clients as McDonald’s, Wrigley Co.’s Winterfresh chewing gum and Nintendo, anticipates revenues to reach nearly $750,000 by the end of 2005.

Wendy Watson, a youth marketing specialist and senior vice president with the Los Angeles office of global public relations firm Porter Novelli, said companies are targeting the youth market not only because it is so large, but because it is such a powerful and influential purchasing group.

“They are the only demographic where 100 percent of their income is discretionary,” Watson said. “This market is paving the way and dictating trends for the rest of the world. A couple of decades ago you were either a skateboarder or a football player, but today kids are embracing both. They make their choices by what wetsuit their friends are wearing when they are surfing.”

Sponsored events play into the picture as well, she said.

“We are seeing a lot of sponsored events or local events, rather than traditional marketing, because it’s not how they make their choices,” Watson said. “It is very grass-roots marketing rather than a major national advertising campaign. Connecting with their lifestyle actually seems a more meaningful way (to market).”

Action sports-related magazines are another gauge.

TransWorld Media in Oceanside publishes six consumer and two trade magazines for the action sports market and has experienced an increase in both readership and advertising sales for its eight publications.

Brad McDonald, TransWorld Media’s group publisher, said advertising for companies not affiliated strictly with the action sports market, such as companies like Apple, Nissan and Coca-Cola, has increased by 30 percent in the past year.

“Core action sports brands are the backbone of our business,” said McDonald, whose publications are owned by New York-based Time 4 Media, a division of Time, Inc. “But we are seeing an increase in mainstream companies that are coming to TransWorld to advertise. We are one of the most effective ways to reach young males. Readers are very engaged with our magazines, and I think that translates into advertising response.”

Combined, the group’s publications, which include TransWorld Skateboarding, TransWorld Snowboarding and TransWorld Surf, have a circulation of more than 600,000, with total readership reaching 3.6 million.

“Reaching teenage males is pretty difficult through conventional marketing,” McDonald said. “There is so much clutter and it is easy for people to tune out. Magazines are a really good environment for getting past that.”


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