FRIDAY, 25 JULY 2007

AFR BOSS CLUB

NARELLE HOOPER, AFR BOSS MAGAZINE
MONIQUE TALBOT, TEMPEST MEDIA
ROSS HONEYWILL, NEO GROUP

Transcript

NARELLE HOOPER: Good evening. Welcome to tonight's AFR BOSS Club event. I'm Narelle Hooper.

Tonight we have two speakers to make it doubly worth your while coming along. We have Ross Honeywill and Monique Talbot.

Ross is a consumer behaviorist and executive director of the consumer think tank, The Centre for Customer Strategy. He is also the boss of Neo Group. He is formerly with KPMG and before that he did some very interesting things on the brand front. Ross is literally talking his own book tonight, actually his book and Verity Bythe's book. He is co-author with Verity of "Neo Power: How the New Economic Order is Changing the Way We Live, Work and Play".

Neos also dominate the Internet and technology and they are the ones who are really driving a lot of the tech boom, which is where the last person I introduce but our first speaker tonight comes into play, and that's Monique Talbot. She is the founder and chief executive of Tempest Media, Australia's largest independent media sales network.

MONIQUE TALBOT: Good evening everybody. I am particularly ambitious. I have ten things I would like to tell you in the next ten minutes. The first one is what Tempest is, online advertising landscape, broadband penetration, changing media consumptions, where are your customers, future possibilities, bridge to TV, corporate website, social networks and consumer control, and your time starts now.

Tempest is probably more famous for its customers and clients rather than for who we actually are. We wrote a business plan to represent individual websites that are not part of a major network. So Car Sales being the number one car site in Australia, eBay for shopping, Ticketek for entertainment, SEEK for jobs, You Tube definitely for entertainment and videos and Coles Online for online shopping. So you can see what we did was put a portfolio of sites together and we exclusively rep these sites in Australia. So the only thing that we do is online advertising revenue. So our sites and our partners rely on us to deliver advertising revenue to their sites for them in integrated media and banner ads.

In the past eight years we've managed to amass over ten million unique visitors per month in the Tempest network through eBay, You Tube, SEEK, Car Sales, et cetera. You can see the size of our network there. Unfortunately I can't say that that actually represents revenue or I'd probably be in the Bahamas rather than be still in Sydney.

Things that you might need to know about the online advertising market that you don't already know. A billion dollars was spent in online advertising in 2006 calendar year. 26 percent of that was in display advertising, 27 percent of it was in classified advertising, and 47 percent of it was in search marketing. To give you a global perspective, in the US the online ad market is worth $20 billion and the UK is worth $4 billion. We think at Tempest we are probably around 2 years behind the US, maybe a little longer, in terms of trends of advertisers, and maybe only a year to 18 months behind the UK. So it a great thing for us to go over and see what they are doing because it does seem to translate quite well to what advertisers are demanding in the future from us, but I will talk a little bit more about that in a couple of slides coming up.

15 percent of media time is spent online, yet only 5 percent of advertising dollars are going online at the moment. So you can see we have got a long way to go. The online advertising revenue actually grew at a massive 51 percent in Q1/2007 versus Q1/2006 according to the AIB, which is the Internet Advertising Bureau in Australia. But I think more telling is the fact that only 5 percent of time is actually spent on Google and search engines. Much to my friend Kate Vale from Google's dismay, she might get all the money but some of the sites out there are actually getting a lot more time spent on sites. And some of the new measurement tools that are coming out are actually measuring how long people spend on sites rather than just what sites they went to and whether they went to a search engine or not.

It is also important for you to understand that there are only about 4 to 500 websites in Australia that take paid advertising. Just again to give you a global perspective, in the US there are around 3 to 4,000 networks. Actually, there is 1,200 networks but some of them have up to 3 to 4,000 networks in each network. So in Australia your choices are actually quite limited, but in a good way, so that you should have a greater understanding of the websites that you're partnering with when you put your advertising dollars on them.

The other good number is the ten million unique Australians each month on the web. I think the 85 percent broadband penetration is another great number for us. It also will lead to my next sleight slide, which is the growth of broadband penetration, which again leads to my next slide, which is influencing the amount of time people spent online. So I think the time spent online has actually doubled from 2006 to 2007 of 9 hours to an average 18 and a half hours a month. I don't think anyone in the room would be surprised at that number.

One of the things that we see as a future of the business is definitely the consumption of video. We represent You Tube in Australia and we estimate that there are between 48 and 55 million videos watched every month by Australians on You Tube alone. So one of the things that we see as a potential for advertisers in the future is perhaps making TV sees that they will use for online and maybe even making two versions, one that they want to have targeted to women and one that they want to have targeted to men, or one that they want to have targeted to a younger demographic and one that they want to have targeted to an older demographic. You can see the slide up there is mainly US-centric, but I think the growth of video spending I think definitely needs to be put in your hmm, we should think about that in the future when looking at our marketing spends for online.

We went to the States earlier this year and talked to quite a few people and one of my absolute favourite things that came back was behavioural targeting. I am not a direct marketer by trade, but some of the things that direct marketers have applied previously we are now going to apply in the future to online. So behavioural targeting is just the systematic tracking and monitoring of consumer behaviour online. One thing that is definitely missing from that sentence that should be there is "anonymous". I was unfortunately watching Sunrise this is this morning to see David Koch and Nat talking about how scary it was that people were looking at their cookies and someone might track their behaviour. And I wished somebody had asked them ooh, so that someone might put an ad in front of you that was relevant to you, you didn't want that? So yeah, I have a hard time with the understanding of some people and cookies obviously.

Behavioural targeting for me is what is going to make the leap between direct marketing and digital marketing. Behavioural marketing will just ensure that you are able to reach an audience you want with the right message at the right time on the right website. It is not here yet. But in the US 11 percent of the display budget in online are spent on behavioural targeting. It is not scary, it is not cyber-stalking. It is putting your message in front of somebody at the right time. Tivo in the US, actually only 70 percent of people turn off the ads with Tivo. Hmm, let's do the maths. 30 percent of people still watch the ads. That means they were relevant to them. So all behavioural targeting allows you to do is put the relevant ad to the relevant person at the relevant time.

In the time available, I have six ways for you to try and reach target customers with behavioural targeting. So if you want new customers, existing customers, customers that have bought one product but they might not have bought another yet, prospect conversion, shopping cart abandoners - people that all the way through and stop. You want to get to them again. You don't want to them to get to that stage and then disappear and never see them again. And my own personal favourite is low value customers. If you've got a product that you know that your low value customers keep taking up - say it is a coupon, say it is a special offer - and your low value customers keep taking it up, you go hmm, I'd actually not like to show my message to those people. You can do that with behavioural targeting.

You can see upselling, retargeting, you can actually place a cookie on an advertiser's landing page or a home page, then retarget that person anywhere on the web with your behavioural targeting and the ads will only be shown to users that have visited that home page or that landing page. Again you can upsell. The Macquarie example there is a cookie can be placed on a product page and again you could show someone the ad again if they have registered or going to purchase a complimentary product. So it is just DM principles but the geeks have finally got hold of it and they have put some really smart technology behind it.

One of the other things that I think is important to remember is, my friend Kate Vale from Google always tells me, that they are so important to the web and Google drives all the traffic. Think as an advertiser you also need to be aware what does your website say about your brand once someone gets there. How do you drive traffic to your website? Once someone goes from Google to your website they might voluntarily engage with your product and your brand for - I don't know - 10, 15, 20 minutes. They're searching your website, they're looking at your products, they're researching. How valuable is that to you? How much more valuable is that to you than a TV see for 30 seconds during Big Brother. So think about what content you have got on your website and make sure it is rich and relevant. Make sure that it is great for people to research their products. That's why they're going to your website. And again, recognise that online's interactive. Look at where did they leave. Get your IT people to tell you where did everybody go? Why did everybody get to our sign out page and they didn't signed up? Why did no one buy anything? Why did they abandon the cart? These are all things that you can know and can easily find out from your website but don't be afraid to ask.

Again social networks, my new favourite thing as well. Yes, I'm a facebook member. I think the great thing about social networks that you can work out from a brand and marketing perspective is go on and listen. See what people are saying about your brands. See what they're saying to each other, see how they communicate.

Just one word of warning with social networks. Always ask, if you are going to spend advertising on there, what is your share of voice going to be. Facebook is the number one site it the world for page consumption. 60 percent of their users go back every single day. So if you want a campaign where you want to show them the ad again and again and again that's brilliant, but if it's chewing up your marketing dollars then be aware. Ask the person that you are dealing with how many times is my ad going to be shown? What is my share of voice? And, more importantly, what is the person doing while they are looking at my ad? Because if they are busy doing something like a job on SEEK, buying a car on Car Sales, or filling out or writing on somebody's wall in facebook - I know how to do that - they're probably not going to engage with your ad. So what is the mindset of the person while they are on the web at that particular time is probably the most important question you can ask when you are doing online marketing. And that is my pearl of wisdom for the night.

Thank you.

ROSS HONEYWILL: Good evening everyone. I'm going to talk about the new economic order and give you some insights into what is happening with consumers in the digital world.

Verity and I spent the best part of seven years now researching and finding evidence for what is approaching a million consumers. We did that to explain why 4 million consumers in Australia are really redefining the digital market. I probably should say at this point that we have an alliance partnership with Roy Morgan research. We use their single-source database and their single-source database are considered to be one of the best consumer databases in the world.

What is happening is that the businesses that we deal with and the people we talk to are increasingly demanding evidence-based metrics, the ways we measure the value of digital consumers in particular. What we've got is a new way of identifying those consumers. We have data from across four centuries - four centuries, I wish. I feel like it. Four continents, there is about 120,000 respondents we have each year, and we have round about 2,000 different consumption variables. So we have very, very rich information about each of these consumers. There are a number of people who have adopted it, we will talk about shortly.

So these Neos that we talk about, who are these Neos? Let's just think about what they mean to the economy and who they are. They're a 24 percent of Australians are Neos and that 24 percent account for 52 percent of all discretionary spending. We are most interested in discretionary spending.

Does everyone get discretionary? It is the spending we do after we have paid for the basics. We think about supermarkets as being really basic needs and not discretionary. David Jones is really discretionary and supermarkets are really everyday needs. I can tell you that 60 percent of products in a supermarket are discretionary. Can you anyone tell me what the ultimate discretionary item in a supermarket might be, and don't say toilet paper?
AUDIENCE: Chocolate.
ROSS HONEYWILL: Chocolate is a very popular response and completely wrong. AFR magazine is not a discretionary choice. BOSS is compulsory. No, it is bottled water. The stuff that used to fall frequently from the sky, ostensibly free, is now put in plastic bottles and shipped halfway around the world and we pay $5 for it, or whatever we pay for it in the supermarket. So we are interested in discretionary spending.

The largest group of consumers in society are Traditionals. They are called Traditionals because they are traditional. We are very creative in our organisation. Traditionals are 50 percent of the population but account for only 24 percent of discretionary spending. They are reluctant spenders. They're motivated - no, let me put it another way. Consumption arousal in this group is created by a deal, by discounts, by price. Whereas for Neos it is a completely different thing.

A quick example: A Traditional would call a travel agent and say, "I've got $2,000 to spend and I would like a holiday on the Gold Coast. Get me the most bang for the buck. I want to get as much as I can for my $2,000." A Neo would ring a travel agent, just to be consistent with the story - they probably wouldn't ring a travel agent, they'd book online. But if they rang the travel agent they'd say, "I've been online and I've found Silky Oaks in tropical North Queensland. It's a gorgeous place in the Daintree with villas literally in the treetops overlooking the Mossman River. Food's wonderful. It is owned and run by Voyagers. I've fallen in love with it, now get me the best price."

Everyone wants the best price but for a Traditional it always starts with price and for a Neo price is just the cost of falling in love. Price is just the cost of satisfying deep desire. It is a completely different thing. Let's just thing about execution, creative execution. Think about a Dell computer ad. Now, a Dell computer ad is a classic ad for Traditionals. Traditionals love function, feature, price, deals. What does a Dell computer ad have? It has function, it has features, it has price, it has deals. Then think about an iPod ad, which is a perfect ad for Neos. An iPod ad has no function, no features, no price, no deal. Just imagination, beauty, design, creativity; the things that motivate Neos first and then they're interested in the price. Everyone wants the best price.

There's a group in the middle called Evolvers. They could be called evolving Neos; they are more like Neos than anybody else, but they are the kind of conflicted group. A Neo would see a beautiful table and if they can afford it would just buy it without thinking, because it's gorgeous. An Evolver would look at the table - a Traditional wouldn't even see it. An Evolver would look at the table and say, "Wow, that's gorgeous, but I think I could probably get it cheaper. I can get someone to knock it off, that's what I'll do or I'll see if I can get it," and then spend the next three years going gee, I wish I got the real thing in the first place, this table is really crap. So they're conflicted in that way.

As I do this I have to tell you that I am a kind of quintessential Neo, so I really apologise for making Traditionals sound a little tawdry. They're not. They are half the population. We cannot exist without Traditionals. We love Traditionals. Our chairman of our consulting company is a Traditional, a wealthy Traditional. Kerry Packer was Australia's most wealthy Traditional.

Anyone that has ever been to Park Street, to the ACP headquarters, would know they have got these disgusting couches in the foyer. I mean they're really, they are shockers. And every time there is new management - anyone from ACP here? Every time new management comes in Space Furniture said, "We'll give you new couches, just get rid of them." Someone actually got them out of the building and into a skip at the back of a building, and Mr Peers, as he is affectionately known, said, "Where are those couches? I paid good money for those and they're still perfectly functional." And they were taken out of the skip and brought back in, more stained than when they left. This is classic Traditional behaviour. But the point of that story is there are wealthy Traditionals. They just don't like parting with their money. So this is a mindset.

There are 4 million Neos there are 8 million Traditionals. Neos really define the economics. They're 24 percent but punch above their weight. There are 59 million of them in the US, 12 million in UK and 4 in Australia. They dominate the top quartile of discretionary spending. 99 percent of them are online frequently. The other 1 percent their computers are down. They are also leading the digital shift in consumer behaviour. Where they go, watch. Because where they are going is where we're all going eventually. They're very consistent. We used to call them constant consumers because they just keep consuming. In the last recession they munched and drank their way through the recession. The restaurants in Sydney and Melbourne were full of these Neos and they are the new standard for consumer value.

There is a whole bunch of people who use Neos as their core consumer base, including the wonderful Westpac Broking and Moet Hennessy, our favourite client come Christmas. They have also been picked up by the media. This is one of two entirely gratuitous slides for which I apologise. The second one isn't completely gratuitous.

The Lexus story is fantastic. Lexus uses Neos as their core customer base. Over a period of 12 months they conducted a whole series, every launch they did, particularly the hybrids and so on, were all directed at Neos. In the past 12 months they have had sales increases of, in a market that was, in the luxury car market that's increasing by about 3.8 percent, they are putting on sales increases of more than 19 percent with Benz and BMW below 5.

We said that Neos dominate the online channel. Look at the Traditionals and look at the population. Digital Neos, these digital Neos dominate online spending. This is an index, a hundred is a baseline, what we would expect of the population as a whole. So they are 3.2 times more likely than anyone else in the population, including themselves, the whole population, to give their credit card details on the Internet. Look at the Traditionals. It is the pizza at the end there. The Neos just figure how can giving your credit card details on a fully encrypted site be more dangerous than giving them to a cab driver in Sydney, or a junior in a florist shop over the phone or a stranger in a hotel at the front desk. They just figure that that's madness. Whereas Traditionals feel if they give their credit card details over the Internet then they will be getting letters from Nigerian banks immediately.

It is important to point out they earn more because are Neos, they are not Neos because they earn more. Things like demographics are very poor determinants of consumption behaviour. Narelle mentioned Gen X and Gen Y, and I have changed my medication so I am not going to get really upset about this. But when we think about Gen Y, Gen Y is what age group? 14 or 15 to 28, that kind of thing? What do we know about Gen Y?

AUDIENCE PARTICIPANT: They like Harry Potter.

ROSS HONEYWILL: Well, they like Harry Potter. They like work/life balance, they are very techno savvy, they are very upwardly mobile. Sorry?

AUDIENCE PARTICIPANT: They don't like working.

ROSS HONEYWILL: Yeah, that's a bit--

AUDIENCE PARTICIPANT: Still living at home.

ROSS HONEYWILL: Still live at home, that's true. A whole bunch of these kind of really - they're professional, you know, the executors who are fighting the glass ceiling or whatever the ceiling is that the groups above them are, you know; all that kind of stuff. Let me tell you that in Gen Ys, 4 percent of Gen Ys are in management or executive positions. When you add in Neos to Gen Y that jumps to 28 percent.

ROSS HONEYWILL: What’s the car, the Toyota Prius, Neos who are in the Gen Y group are--

VERITY BYTHE: So imagine Gen Y as a whole, okay. We have got these ideas about what Gen Y are. Imagine Gen Y Neos, who are about 35 percent of the population, and those people, they're buying intentions for the next 12 months for Toyota Prius, 330 percent more likely than the rest of the population to intend to buy a Toyota Prius. The rest of Gen Y, 60 percent less likely than the population to intend to buy a Toyota Prius.

ROSS HONEYWILL: Thank you, Verity Bythe.

So when we think about this group it's one factor. That factor is age. So what is it really good at telling us? It's really good at telling us how old someone is. It's not necessarily any good at telling us how they want to behave, what their values are, what their attitudes are. The Neo typology is underpinned by 194 factors. There are 100 behavioural factors, there are 82 attitudinal factors and 12 discretionary spending factors.

Having said that, they are younger so they are more represented in the younger age group, more statistically highly represented, and the Traditionals tend to be older. These Neos dominate executive ranks. They are six times more likely than anybody else to hold executive positions and they spend more. We are interested in spending. We are not interested in how much someone earns. We all know people who have big fat wallets and all they do is sit on them. So what is the mindset that makes them spend? Whole bunch of stuff up there.

Mercedes and BMW. If we take BMW, for example, both Traditionals and Neos buy BMWs. But they buy them for fundamentally different reasons and this is where we have to unpick it. A Traditional would buy a BMW for the badge. It's status. It's to say something to somebody else about them. Whereas for a Neo it is just a whispered secret to themselves. It is actually to say something to them about themselves, not something to somebody else

So quick flick through, what are the things that, what is the DNA that drives these people and how do we think about reaching them and motivating them, acquiring them, retaining them? Individuality is critical. We really need to deal with them on a totally individual basis. We need to personalise everything, not just customise. Customising things, you know, in the world of customisation. Customisation is really a corporate construct. We put together three things in some kind of bundling and say we've customised this for this age segment, this demographic segment, but it is actually suiting us. What Neos want, they want it personal. They want to create for themselves their own options. So give me the options and I'll choose the three I want. Don't you tell me which three I want. Now it might be the same three that everybody else is choosing but it doesn't matter. I chose them. You didn't choose them for me.

Relationship is critical. There is nothing wrong with transaction, without transactions none of us would be in business. But the relationship really drives the transaction with Neos. So experience, you know, patience is rewarded. These people will give you all the information about them, but they'll only give it to you once. Don't lose it, and respect it.

Information is oxygen. They want really rich information all the time. They don't want mass, they want narrow casting. BOSS, for example, is the number one Neo magazine in Australia and they love the fact that it in fact gives them insights, particularly since Narelle has been editor, insights into how leaders think, how successful people think. These people love provenance. They want the story behind the facts, and provenance is really about authenticity. What is the story behind it? What you stand for is critical. Think about Al Gore. Al Gore is a politician. How many politicians do we know that are as famous as Al Gore other than the goose in America, not that I have particular views on this. Al Gore actually stood for something and has become famous for standing. We are so unused to. Actually so unused to politicians standing for something.

Be edgy. Give me the options. Who's that famous singer? Bob Geldof said, "Give me the options and I'll take the path less travelled." That's the Neo credo.

Technology. Don't think these people are just early adopters of technology. They're not. They will only adopt new technology, new products, when in fact they deliver something sensible to their lives. When they help them jettison mundane tasks, where they actually help them add some value to their lives. It does not matter about complexity, paradox, they are absolutely fine. Change. Keep evolving.

And finally design. Things need to be beautiful. If you're going to touch the spirit, and as a consequence the wallet, of a Neo then it actually has to be beautiful. If it is just transactional, if it is just stuff, forget it. Isn't that a great - Verity found that in Carlton in Melbourne on a fence, just painted on a fence: Let beauty - I mean, wow.

So you need to ask yourself, are you in business for Neos? Neos are employees as well as consumers. Do you need to hire them? Are they going to cause trouble? They will cause trouble unless you challenge them. Are you a Neo and actually how does that impact? And if you are working with non-Neos it is completely counterintuitive to them, so you need to train them, you need to help them. So in the workplace, in the market, Neos spend more and expect more, they dominate white collar occupations, they are influenced by personalised communication, whispered secrets that make them feel like individuals.

Dealing with these people you have to be the corporate Casanova. Casanova wasn't particularly attractive…The thing that Casanova had that was the most remarkable was that he made every woman that he was with feel like she was the only person in the world, and that's the secret with Neos.

In the workplace Traditionals favour the status quo, they dominate white collar occupations, they're happy with generalised communication and they thrive on certainty, rules and structure. They're completely different.

This is the book that - it's a really fine book, available in really all good book stores for an amount of money that qualifies as a charity, and you can find more information on neogroup.net about these people and that is completely free. Thank you very much.

NARELLE HOOPER: I wondered about this. Are Neos born or are they made?

ROSS HONEYWILL:

You are born a Neo and you die a Neo. You are born a Traditional and you die a Traditional. The Evolvers do move in and out of Neo-ness and particularly, for example, a professional woman in her thirties out of the work force for a couple of years to have kids, she is not spending enough and we are unashamedly commercial in how we approach this. So if you are not spending enough the algorithm will tip you out into being an Evolver but you will still have, for example, all the Neo characteristics and when you are spending enough it will take you back in. That's why it is so powerful as a commercial tool.

NARELLE HOOPER: Would they switch off if they were identified as Neos?

ROSS HONEYWILL: They do. So we only ever talk about Neos to people like you. We are about to launch an online site which is the first consumer business we have done, something called neoneighbourhood.com and we struggled for months about whether we were going to say welcome to Neos or describe Neos and we've just decided that's just completely the wrong thing to do. This is a recommendation engine where five cherished experiences are more valuable than 5,000 search results, sorry to Google. It was completely clear to us that if we in fact pigeonhole them then they'll be really unhappy about it. So it is just a place they're going to come to, Neos will love it because it is gorgeous and really helpful and cuts out all the kinds of dross, and Traditionals are going to come to it and go boy is this a crap site. Where are the deals? I can't see any prices, I can't see any discounts. So we are all completely self-selecting in life. That's a great question.

NARELLE HOOPER: I want to learn more about this behavioural targeting.

TALBOT: You can use behavioural targeting two ways. One of the ways that we will use it in the future for some of our clients, like Car Sales and eBay and things like that, is you can actually use behavioural targeting for intra-site targeting. So targeting somebody that is on your site, for argument's sake, in Car Sales that is on the new car section. BMW might want to get to that person when they are in the private-to-private section of Car Sales because the person about to look at the 60, 80, 100 thousand dollar BMW might actually want to know well, in 2 years time if I want to sell it how much money am I going to get for it? But BMW, as a manufacturer and an advertiser, they don't want to get to the private-to-private people selling because that's a waste of time for them. But if we can track the person going from new, looking at the brand new BMW 3 Series convertible - beautiful - to how much I'm going to get for it, that person is still valuable if they are looking at how much that BMW is going to be worth in 2 years time. And what we haven't been able to give clients before, or advertisers, manufacturers before, is the ability to track that person. And as much as the people on Sunrise this morning were spruiking the scariness and the Big Brother-ness of it, it was appalling to me to see people that were propagating the fact that cookies and tracking behaviour was something we were going to get the Nigerian bank accounts and the things like that. Getting the right advertiser in front of the consumer at the right time is the whole goal of behavioural targeting.

ROSS HONEYWILL: You're a bit tough on them. It was a highly intellectual discussion.

NARELLE HOOPER: All I want to know is how someone can do that and translate that to my letterbox.

MONIQUE TALBOT: You know what we're going to do? We're going to take the letterbox theory and we're going to put it into the digital theory, so you only get offers that you want in your email box.

AUDIENCE PARTICIPANT: Hello, Ross. Hello. You've described a very interesting group of the Neos in terms of their spending habits and discretionary spend. What is their wealth or value profile looking like? Are they living on credit? Are they spending more than they're actually earning?

ROSS HONEYWILL: Of all the people with outstanding credit balances, if you think about credit cards, all people who are revolvers as they are called in banks, with outstanding balances on their credit cards of $10,000 or more, half of them are Neos. So Neos see debt simply as an enabler. They don't see their credit card as a lender of last resort and they're completely confident - I won't say cock sure, but completely confident - that they in fact can pay that debt down whenever they need to. It is just an enabler. But they also have vastly more investments than anybody else. So they dominate broking, particularly online broking. They dominate housing investments, residential investments. So they build wealth but they build wealth - everyone wants to pay down their mortgage. Traditionals pay down their mortgages and sit. Neos pay down their mortgage and leverage it immediately into equities, into investment properties. So they're constantly looking for the next investment opportunity

AUDIENCE PARTICIPANT: To what extent can you break down Neos below a single bucket.

ROSS HONEYWILL: The thing I didn't point out about Lexus is Lexus actually targeted for their hybrid vehicle launches, they targeted what they like to call Super Neos, which were the top two deciles of Neo-ness. We have 5 percent increments throughout the whole Neo thing. So there are 20 different scores. It is interesting that the bottom decile of Neos - no, the top decile of Neos behaves quite differently to the bottom decile. They're all Neo behaviours but the top ten are like frenzied in terms of the amount of things they're doing, the way they're living, as opposed to Traditionals. In the top decile of Traditionals, compared to the bottom decile of Traditionals, there is very little difference. Whereas the more Neo you are, the more of this stuff that you do. Which is why Lexus went after the top two deciles

AUDIENCE PARTICIPANT: Can you give us a bit more information about the way Neos work online?

ROSS HONEYWILL: There is a couple of things I can tell you. One is that they actually don't mind ads on online. There are these kind of myths that people dream up about Neos, one of which is gee, these people sound like yuppies or these people sound like the me generation. One of the things we need to be aware of is that these Neos were interested and passionate about climate issues when Al Gore was still a politician. They're very interested in ethical issues. So don't get locked into the cliche thing. When we're talking about online you would think these people would hate advertising online. In fact, they - not Traditionals but Neos - work out the trade-off. They have worked out that if I'm getting all this information free then someone is paying for me to get it for nothing. Therefore, I am not notice that ad, I'm really good at ignoring that ad if it is relevant to me, but I accept that someone has the right to put it there. Whereas Traditionals go, you know, get the ads off, I hate those ads.

They really are very active. They stay online, they research online, they buy online. I mean, they really live their lives online. One of the reasons is that it is the universe that they control. Not some corporation. So it is the place that they can be themselves. They can find themselves. There is a thing that we like to say, that some people like to read books to find themselves. Other people like to read books to lose themselves. In the case of Neos they're really finding themselves and particularly online.

AUDIENCE PARTICIPANT: With the Neos, are they very fickle or high maintenance? Is today's trendy thing next week or next month or next year's passe. You mentioned Moet Hennessy; is it something else next year? If it is BMW, Mercedes Benz, it's Saab or Volvo in '08 or '09.

ROSS HONEYWILL: There are two parts to the question, one is are they fickle and the second part was are they high maintenance? Yes to the second; yes, they are high maintenance. But they aren't promiscuous consumers. Traditionals are the most promiscuous consumers in the economy because when it works on price the person that comes and offers them the next price they'll move. Whereas Neos will stay with a brand, but they'll only stay with a brand if it aligns with their own values. They'll stay with brands that get it. And if they don't get it then they'll move. So they're not fickle but they are prepared to vote with their feet and their money. So if they are unhappy about something they'll go. But only if you're getting it wrong for them.

AUDIENCE PARTICIPANT: If I'm a Neo and I want to drive an Audi and my wife's a Traditionalist and she wants to drive a Holden, how do they come to a decision point?

ROSS HONEYWILL: Your wife's the Traditional, just say--

AUDIENCE PARTICIPANT: Arguably.

ROSS HONEYWILL: Well she will have got a better deal than you did when she bought the car. Neos and Traditionals do marry. Because we're self-selecting in life it is way more likely that Neos will marry Neos, but it isn't unheard of. Verity actually married, sad, tragically for me, a Traditional. And Verity sent him off to buy a Sony DVD player that she'd researched online, had thought about carefully, it matched the decor, it did this, it hooked up with the new flat screen TV they bought, and gave him the $420 to go and buy it. He went off to a shopping centre in a suburb that had Retrovision on one side and Harvey Norman on the other side of the mall and went backwards and forwards until finally said the guy said, "Mate, you don't want to buy that. Buy one of these and I can--". Anyway, he came home beaming. He gave her a hundred dollars change and had three DVD players from Korea. And to this day he can't understand why she was pissed off with him, because he got such a deal that he couldn't resist it. So to come to the point, it is extremely handy because the Neo can identify what's worth buying and the Traditional can get the best deal on it.

MONIQUE TALBOT: And the Neos pay for it.

NARELLE HOOPER: There is this contradictory behaviour which is that they are socially progressive, conservative politics, they're rampant consumers, yet they care about the environment. How do we reconcile that by the push to consume less over time?

ROSS HONEYWILL: There are two things in that. One is when we talk about conservative politics, they actually have extremely progressive social attitudes. They helped get John Howard over the line last time. 52 percent of Neos voted for John Howard and 48 percent of Traditionals did. But they were voting for the Coalition not because they thought this was some wonderful government, but because it was actually safe economically. Because their life's economic rationalists it was a kind of a sensible, solid state, economic decision they made. It was about the economy, not about politics. This time the scene is completely different. They're social progressive attitudes are being given voice because there is a possible alternative.

In terms of consuming less, when we talk about consuming we are not talking about shopping. I mean, we consume air. There is lots of things we consume that we don't necessarily pay for and there is an increasing trend for actually consuming fewer things and more experiences, and Neos are completely at the forefront of that. It does not mean they are spending less. It does mean that they are making really careful choices about how they spend. So they are not just buying stuff en masse. They're buying really high quality experiences in particular, but they are tending to buy fewer things that are more beautiful, fewer experiences that are more wonderful, rather than just kind of buying stuff for the sake of it.

NARELLE HOOPER: Thanks to Monique Talbot from Tempest Media and Ross Honeywill from Neo Group.