The case for targeting older folks
Advertisers tend to focus on adults 18-49, but boomers have $
October 25, 2012
Two years from now, the last of the baby boomers will turn 50 years old, aging out of the key adults 18-49 demographic that became so popular among advertisers four decades ago when they began targeting the oldest of the boomers, the generation born between 1946 and 1964. According to a recent study from Nielsen, there are now nearly 100 million consumers over age 50, and the 50-plus segment will grow 34 percent over the next 18 years, compared to 12 percent growth for 18-49s. And yet advertisers continue to focus on younger consumers. Upfront TV advertising is sold on the 18-49 demo, and one study found that advertisers spend 10 times as much targeting 18-34s as they do 50-65s. All this is bound to change as the boomers grow older. They still command some $3 trillion in buying power, and by 2050 there will be 161 million consumers ages 50 and older in the U.S. That’s already leading to ventures like RLTV, which targets those over 50, and Huff/Post 50, aimed at boomers. Paul FitzPatrick, president and chief executive officer at RLTV, talks to Media Life about why advertisers undervalue older consumers, how this is changing, and why it’s taken so long.
Do advertisers undervalue the over-50 crowd? Why or why not?
There is definitely a huge opportunity for growth with the over 50 audience for marketers. Increasingly, advertisers are re-examining the 50-plus audience, realizing that they are a relevant and important audience—100 million, growing to 120 million in a few short years. In three years or so, some estimates have 50 percent of the population 50 and older.
They are the most affluent and biggest-spending demographic by far, yet the U.S. marketing spend [to reach] 50- to 65-year-olds in 2009 was $1.5 billion versus $150 billion against the 18-34 audience, so there is a lot of room for growth.
There is also a huge demand for content targeting the demographic. We recently fielded a study with Millward Brown that showed that 50-plus viewers are craving programming that is made for them and relevant to their lives, just as it was when they were in their 20s, 30s and 40s. Most importantly, this study also demonstrated that these consumers are more likely to pay attention to the advertising when it’s delivered in programming that is relevant to them.
Why has there traditionally been such an emphasis on reaching those under 50 through advertising?
The 18-49 category was originally created 40-plus years ago specifically to target the boomer generation, which has always been the largest, most influential, marketing-friendly demographic our society had ever seen.
As boomers aged, their influence, market power and wealth grew exponentially. Boomers became accustomed to being the center of attention and the driving force in every facet of society, including marketing – and television programming. It’s not too surprising, however, that it’s taking the marketplace a while to adjust to a new world, a world in which the last boomers will turn 50 in 2014.
Will the ad industry need to rethink its longtime focus on 18-49s now that we're seeing such a sea change in demographics, with the boomers aging into retirement?
There is a sea change going on, and, as Nielsen pointed out in its recent report on boomers, the 50-plus audience is just too valuable to ignore.
Generation 50-plus accounts for 59 percent of all U.S. spending, buys 40 percent of all technology products in America, books 80 percent of all luxury travel and purchases 63 percent of new cars. They also stand to inherit $15 trillion in the next 20 years. And boomers, 80 million strong, have never been particularly passive spectators and don’t like to be ignored or taken for granted.
With advertisers, it’s not a seismic shift that’s happening overnight, but more and more marketers are recognizing the value of the 50-plus audience, and the ones who have done so already are reaping the benefits.
Pharma, travel, financial, insurance and health and wellness have all moved in the 50-plus direction, and even feature films, both with their casting and their target audience. Such recent and upcoming films as "'Hope Springs," "Greatest Exotic Marigold Hotel" and "Lincoln" have recognized the value of this 50-plus audience.
What's something that advertisers tend to overlook or forget about boomers that they really shouldn't?
There are several important factors to note about this incredibly powerful consumer group. There is a misconception that boomers are stuck in their ways and won’t change brands, but multiple studies show that they are just as likely to switch brands and experiment with new products as younger generations.
Another misconception is that boomers are slow to adopt or use new technology, yet this audience is going online, spending online in record amounts, and are the fastest-growing segment using social media platforms. According to the Nielsen boomer study, more than 40 percent of customers paying for Apple computers and 40 percent paying for wireless service are boomers.
A separate Nielsen report last year found that boomers are helping drive a rapid growth in mobile social media. And we don’t see any signs of that slowing down any time soon. We work with several experts in the field of boomer marketing, and what we know is that this group intends to keep spending money and doing interesting and fulfilling things that cost money until the day they die. This powerful consumer group knows that they’ve got a good 30 years left to live, and they have the desire and the where-with-all to make those years the best they’ve ever had.
Another factor to note is that generation 50-plus members not only buy for themselves, they buy for their kids and grandkids. In many cases, they are buying the cars, paying for the trips and purchasing other goods and services for their millennial offspring.
Do you expect to see more media targeting 50-plus consumers? What types?
We expect virtually all types of media will increasingly target 50-plus consumers. We know that the 50-plus audience is among the fastest growing segment in smartphone use, online and in use of most social media platforms.
However, the 50-plus generation, first and foremost, is the television generation. For 50 years, television programs were made for the interests and life stages of viewers who are now either boomers or seniors. They are cable operators’ most loyal customers, and remain television’s biggest fans. But they want to be spoken to with programming that is relevant, inspiring and respectful.
And that’s where RLTV comes in. RLTV is unique. We are focused on the 50-plus target and, accordingly, produce programming that serves their varied interests — health and wellness, relationships, transformation, exploration and, of course, finance and political and public policy issues.
What sort of spending power do boomers have compared to other demographics?
Generation 50-plus, with its 80 million boomer segment, spends approximately $3 trillion annually versus $170 billion for millennials, and boomers’ per capita discretionary spending is 2.5 times greater than 18-34.
Adults 50-plus also are set to inherit $15 trillion over the next 20 years, and they control approximately 60 percent of all disposable income. They account for $230 billion in sales for consumer product goods, and 49 percent of total sales. They buy 63 percent of all new automobiles and make 80 percent of all luxury travel purchases.
How does boomers' brand loyalty compare to younger people's?
A Roper ASW survey shows that consumers in their 20s and 30s are actually more averse to trying new brands than those in their 50s and beyond.
A Yankelovich study determined that fewer consumers 50-plus feel it’s risky to buy an unfamiliar brand than did shoppers 16 to 34.
Boomers are savvy and discriminating purchasers. They’ve been around. They look for value and are not afraid to change brands for a better product.
Why did you decide to rebrand? What's the goal and focus of it?
RLTV originally launched as a four-hour programming block. While the mission was content for the 50-plus audience, it was called Retirement Living TV. That had the unintended consequence of creating a misperception about the core purpose and audience.
Moreover, retirement has been undergoing a redefinition in recent years, driven by new life stages, goals and economic realities. We retained the RLTV name, doing so by using a core group of "R" words – for example, redefining, re-imagining, rethinking, relevant – and imagery that reflect RLTV’s mission and target audience aspirations and experiences to help redefine the name RLTV.
And importantly, we have unveiled a new brand tagline, Experience Matters, which succinctly reflects our two goals: describing the essence and value of our audience and inviting advertisers and distributors to embrace this unique, powerful and discerning consumer segment that will increasingly make a difference to their business objectives.
Why do you describe your target audience as "happier with age?"
Personally, I feel it. And so many of my personal and business colleagues of the generation 50-plus feel similarly. This is borne out by research. This is believed to be based on the theory that with acceptance of aging comes contentment. And we know that happier people tend to enjoy life more.
Boomers are not like any previous generation when it comes to aging. They don’t see themselves as "old." They believe themselves to be nine to 11 years younger than their actual chronological years. And they believe the best is still ahead of them. That’s not to say that we don’t have challenges. That’s life, after all. But the 100-million-person segment has the benefit of experience and wisdom and the tenacity to deal with life’s challenges and opportunities. RLTV’s goal is to be a resource in this next stage adventure.
So tell us, how are upfront negotiations going?
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