Brands have always focused advertising on younger audience. In 2010, this is an incorrect approach. A recent study from Nielsen Company validates this line of thinking.
This is why Boomers should not be neglected as a target market for advertising
* In 2011, approximately 30 percent of the United States’ population will be over 50 years old.
* Boomers have more disposable income than their younger generational counterparts. The Boomers are expected to outspend their younger peers by over $1 trillion in 2011. Also, Gen Y (considered to be birth years 1980-1994) has been disproportionally affected by the downturn and is unable to spend in a significant fashion.
* Boomers account for 38% of consumer package goods (CPG) purchases, yet major CPG brands are only currently spending 5% of their advertising budgets on this group. There is opportunity for growth for companies that can connect meaningfully with Boomers.
* The Boomers are unlike other 50+ markets in the past, as they have shown less brand loyalty (open minded to change) and a willingness to adopt technological products into their lives at the same pace as younger generations.
This article down here discusses comprehensively on why our marketing efforts should focus on the baby boomers. It is written by David Mitchel, Vice President of Norton Mitchel Marketing.
The Nielsen Company released new research this past week indicating that the Baby Boomer generation is being neglected by brand marketers, particularly consumer packaged goods (CPG) brands. This is not radical new insight, but it does highlight how this notion is becoming more mainstream. Those who follow demographic trends have known for a long time that the United States’ population would skew older as the Baby Boomers aged. In 2011, approximately 30 percent of the United States’ population will be over 50 years old. With an aging population, it is important for brands to learn how to market to those 50+, an uncommon practice in recent decades for most brands. Nielsen’s conclusion that the Baby Boomers are neglected by brand advertising and shouldn’t be is a correct conclusion. However, their basic analysis posted on the website failed to mention a key driver of their conclusion. Brands that are able to connect to this group meaningfully in the years to come should reap rewards from a revenue and profitability standpoint.
Nielsen was quite accurate in their conclusion that Boomers have tremendous spending power. The standard definition of the Baby Boom Generation is those born between 1946 and 1964. Today, Boomers are between the ages of 45/46 and 64. At this stage in life, many of the older Boomers are nearing retirement age and the younger Boomers are in a mature stage of their careers. This means that Boomers have more disposable income than their younger generational counterparts. The Boomers are expected to outspend their younger peers by over $1 trillion in 2011. It is noted that Boomers account for 38% of CPG purchases, yet major CPG brands are only currently spending 5% of their advertising budgets on this group. Two major conclusions can be drawn from this information. First, CPG brands are getting a tremendous return on investment by spending advertising dollars on Boomers. Next, those brands that recognize this trend and further look to capitalize on the Baby Boomers will demonstrate revenue growth in the years to come. In this depressed economic era, finding a source of growth and exploiting it represents a major competitive advantage.
The current economic downturn should be a major force examined by market research and considered by brands when charting a course of action. In an economic downturn, the vast majority of people suffer. Those who suffer the least emerge as winners. With regard to Baby Boomers, they have suffered less than other generational cohorts. The generational cohort that been disproportionally affected by this downturn is Generation Y (often considered birth years 1980-1994). Generation Y is currently between the ages of 16 and 30. Marketers have always paid a lot of attention to the 18-30 age group in the hopes of building brand loyalty amongst the youth. In this era, that is the wrong strategic approach. Generation Y has little spending power as compared to 18-30 year olds in the past. This is because youth unemployment is extraordinarily high. This is a social crisis brewing and has been underreported by major media outlets save for the exception of BusinessWeek in October 2009, but that is not the focus of this analysis. This is relevant knowledge to brand marketers when considering the Boomers. Boomers have been far more likely to keep their employment, thus producing income that can generate demand for products. The insights from this paragraph represent the key bits of information that Nielsen didn’t share in their basic analysis of marketing why Boomers have spending power and why brands should focus on them.
Focusing greater efforts on the Boomers, who are mostly 50 and up at this point, will be a new approach for brands. Over the past few decades, the majority of brands have focused their advertising efforts on those ages 18-49. The highly satirical writing staff at “The Simpsons” noticed this trend and mocked it in a 1994 episode entitled “Lisa vs. Malibu Stacy”. “Lisa vs. Malibu Stacy” parodies many aspects of brand marketing. From the 10:26 to 10:41 mark, this marketing trend is lampooned in a short dialogue between Lisa, Abe and Homer Simpson.
The majority of mainstream brands had never really considered the 50+ market in their promotion strategies for a myriad of reasons. The primary reason is they have not been considered a profitable segment of the market. It has been that these types of brands considered this market to be set in their ways, unlikely to be open to new brands and not extravagant spenders. They have also associated 50+ individuals as a declining market, and brands often desire to be associated with ascending or peak maturity markets. However, the Baby Boomers, poised to make up the overwhelming majority of the 50+ market in the years to come, are fundamentally different from 50+ individuals and senior citizen markets of the past. Modern medicine has allowed for many to have longer and more active lives. Additionally, from a psychographic standpoint, Boomers are markedly different than 50+ individuals from predecessor generations. They are less likely to be brand loyal than predecessors. They are a very open minded generation, and have embraced technologically innovative products. Boomers have adopted cell phone technology at a rate nearly consistent with their younger counterparts. In 2008, the Boomers had a more significant presence on the Internet as compared with 2000. Unlike their parents, the generation that spent their formative years during the Great Depression and World War II and were significantly scarred as a result, the Baby Boomers grew up during an era of prosperity and are more likely to have an optimistic outlook. They are also more likely to spend money more freely than the children of the Great Depression.
Since we have established that the Boomers are a cohort worth pursuing, how do brands go about promoting their products to them? Larger brands with larger advertising budgets should consider television advertising. Television isn’t the least expensive medium, but it has always been known as a medium of great reach. The Baby Boomers have been voracious consumers of television. This was the initial generation to grow up with television, and they perceive the medium favorably. The broadcast networks, the very same networks that the Boomers grew up with, are a quality place to start. The median age of prime time broadcast television is 51 years old. The median age of broadcast nightly news viewers was 62.3 years old in 2009. Median age of broadcast network morning show viewers was 55.2 in 2009. The median age of “The Tonight Show with Jay Leno” viewer is 56. There are even opportunities on cable networks for targeting Boomers. Fox News Channel had a median age viewer of 65 in 2008, MSNBC’s “Countdown with Keith Olbermann” has a median age of approximately 60 years old. CNBC’s median age viewer was 49.7 in 2006 and is now likely over 50. CNBC also has the most affluent audience of any television network, making it a great fit for luxury brands.
One of the hottest buzzwords in marketing right now is social media. Conventional wisdom would indicate that the social media space is the domain of the youth. While many social networks skew younger, that fact doesn’t tell the whole story. 60 percent of Baby Boomers consume sort form of social media. As of January 2010, the 55+ segment on Facebook is the fastest growing, as it grew 922.7% in 2009. Another fast growing segment on Facebook is 35-54, a segment that grew 328.1% in 2009 and is comprised of younger Boomers and the older members of Generation X. Twitter had a median age older than Facebook in 2009. LinkedIn has the oldest median age of the major social networks at 43 in 2009. A 43 year old in 2009 would be considered an older member of Generation X, but it is reasonable to surmise that Baby Boomers, especially the younger part of the generation, are a sizable portion of LinkedIn. Since Boomers have shown a willingness to adopt technology, it is no surprise that they are present in social media. Ignoring social media when targeting Boomers would be a mistake, especially considering that it is inexpensive compared to traditional media advertising.
The Baby Boomers are going to be a formidable force in product marketing now and in the years to come. This generational cohort will represent the overwhelming majority of the 50+ market in the years to come and a much larger share of the population will be 50+ soon. They have greater disposable than younger age groups, have adopted technology willingly, and are much different than the older cohorts of years past. The majority of brands need to continue to take this group seriously as they age. Brands that neglect this group do so at their own peril.