BOSTON (MainStreet) -- There's a lot of talk about the polarization of wealth and the shrinking of the "middle class." A sea change for companies as they market, brand and advertise has more to do with the fate of the "Mass Affluent."

A recent study by Digitas, a global integrated brand agency, found that those with a $100,000 to $199,000 household income level have all but disappeared.
Are these people rich, middle class or part of the "Mass Affluent"? Even as the wealth gap widens, definitions are changing.

"They don't have the leveraged spending power they once had and now have to live on income alone," the study says, adding that 53% of this once-dominant demographic now considers themselves middle class.

The study, Affluence in America: The New Consumer Landscape, was developed as a white paper for Advertising Age with Ipsos Mendelsohn, a global market research company that specializes in advertising and marketing. Mass affluence has given way to the spending power of the truly and the up-and-coming affluent -- the "Class Affluent" and "Emerging Affluent," it found.

The Mass Affluent, earning between $100,000 and $199,000 in household income, is rapidly being absorbed into other categories, including the Emerging Affluent, or those under the age of 35 earning $100,000 to $199,000; the Class Affluent, a growing segment with between $200,000 and $1 million HHI annually; the merely "Affluent," with between $200,000 and $499,000 HHI; the "Wealthy," with between $499,000 and $999,000 HHI; and the "Rich," with $1 million-plus HHI.

"I believe they the Mass Affluent were always middle class but they were able to live above their income or their mean through leverage," says George Scribner, senior vice president of people planning for Digitas and the author of the study. "We are hearing ad nauseum today about how the typical middle-class, organized-labor careers -- teachers and government workers and social services, those kinds of jobs -- are either diminishing or have very limited upside potential. Shrinking jobs and limited income potential means the Mass Affluent are back to being middle class and they themselves are most likely to define themselves as middle class. The shift in assets continues to go to what we are calling the Class Affluent, the 8.5 million adults who have truly affluent lifestyles according to all the data we have looked at."

Where one falls on the wealth spectrum has traditionally influenced what they buy and the brands they favor.

According to Scribner, the Mass Affluent had grown in size and importance since the 1970s to become the highest tier of the mass market. He credits the trend for influencing "companies like Wal-Mart ( WMT - Get Report) to creep upwards into organics, Starbucks ( SBUX - Get Report) to make the $3 latte an everyday occurrence and Mercedes to create the C-class to stretch into a lower price point and larger customer base."

As economic shifts pushed those once willing, if not able, to make luxury purchases back to being middle class, they now gravitate towards middle-market brands such as Lee, Plymouth and Virgin Mobile ( VM) and stores such as Kmart, J.C. Penney ( JCP - Get Report) and Sears ( SHLD).

"I look at shifts in language, and we noticed the return of the word 'frugality.' The other language shift we noticed when we started this study a year ago was references to 'the rich,'" Scribner says. "The words 'the rich' have never appeared in the popular press on an ongoing basis until the last two or three years. It is something you might imagine from the 1920s or something. It is is very much a new kind of conceptual class that has been created."

"When we asked people to self-identify, those with incomes under $200,000 were most likely to say they were 'middle class,' and people over $200,000 were most likely to say 'upper middle class,'" he adds. "Nobody in America is going to call themselves rich. It is just not culturally acceptable."

The trick for advertisers and marketers is determining how to adjust to a landscape where spending habits have shifted.

"My No. 1 recommendation is to do what they did during Watergate -- follow the money," Scribner says. "We've all grown up in the period of mass merchandising. We've grown up in a period where the middle class drove elections, cinema, sales and merchandising. But that's changing now, and we really need to change our marketers mindset and look where the scale of assets are and not what the headcount is."

The rise of the Emerging Affluent holds what may be the greatest potential. This category, 5.5 million Americans, works in careers that will eventually deliver affluence -- financial services, legal services and engineering -- but they are still in the low- to middle-management tiers.

Adapting to technology is a key strategy for reaching this segment, Scribner says.

"If you are not digital, you do not exist. You have no future, because the emerging 18-34s are highly, highly digital," he explains. "Level of affluence also drives digital behavior. Among people of the same age, the more money you have the more likely you are to be an early adopter and to be very digital. You have a mobile, and global, lifestyle."

To the Emerging Affluent, "everything is cross platform and it's simultaneous." And where companies have traditionally taken a big-tent approach to reaching a mass market, the new paradigm will benefit brands that have a unique character and vision, Scribner says.

"My observation about brands is they start out small and focused and as they become more successful they need to incorporate a wider variety of people," he says. "In that regard they end up defending their brand, as opposed to really championing and evolving their original reason for being."

There are exceptions to that, however. A common denominator among the Mass Affluent, Class Affluent and Emerging Affluent: Apple ( AAPL - Get Report) is their favorite brand.

"They are a brand that really believes in something, and everything they do reflects their mission," Scribner says. "Most brands aren't on a mission anymore. They have a good business, a brand philosophy and a coherent ID, but you don't really get the feeling that their employees wake up looking to change the world like Apple, Patagonia, lululemon ( lulu) and various niche brands do. I think that's something people really hunger for today, especially the emerging class. We all want to belong to something that's bigger than ourselves. Because the world is so complicated these days and politics is so screwed up, it's really nice to be able to align yourself to something that's noncontroversial and clear, like a really well-articulated brand."

But those popular product lines can't afford to rest on their laurels.

"The Emerging Affluent are very savvy," Scribner cautions. "They are very aware you are marketing to them and they are OK with that. But they are also very demanding and they expect to have whatever they want, whenever they want it, however they want it. If there is a superior offering, they are gone. They value the end result and they are not going to lose the opportunity to get something better because of a previous brand association."

-- Written by Joe Mont in Boston.

>To contact the writer of this article, click here: Joe Mont.

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