January 31, 2013

Marketing's Oldest Old Wives' Tale


There a few themes that keep popping up in this blog. They are:
1. Misconceptions about "branding" and how brands are built
2. The folly of listening to "marketing experts"
3. The over-promise of online advertising
4. The over-promise of social media
5. The "death of advertising," "death of TV," and "death of marketing" nonsense
6. The chronic, silly belief in "the thing that will change everything"
7. The foolishness of marketers' obsession with young people
Over the past few weeks I've written a number of posts about #7. But I haven't really dealt with the main thesis that drives marketers to focus on young people when every trend in demographics and economics points to people over 50 as the drivers of consumer spending.

In case you haven't been paying attention, here are the key facts:
  • Over 70% of the wealth in the U.S. is controlled by people over 50.
  • Half of all consumer spending is done by people over 50.
  • People over 50 have an average net worth 3 times that of younger generations
  • They account for 55% of consumer packaged goods sales and dominate 94% of CPG categories
  • Baby boomers spend an average of $650/month on technology, more than either Gen X or Gen Y
  • Younger boomers outspend younger adults in every major category
  • Baby boomers are the Internet’s largest constituency
  • Between now and 2030, the population over 50 will grow at about three times the rate of people 18-49  
  • They buy over 60% of all new cars
  • They are the target for 5% of all advertising.
So the question is, if people over 50 are so economically dominant, how can it be that, as Forbes says, they are "the most neglected wealthy people in the history of marketing."

There are a number of reasons. In a recent post entitled The Invincible Blindness Of  Advertisers, I mentioned a few of the fictitious beliefs that drive this, including:
  • People over 50 are already too brand loyal to convert
  • People over 50 are too price-conscious
  • People over 50 don't spend much
  • There is a "lifetime value" in targeting young people
It's all nonsense. But perhaps the largest delusion about people over 50 is that they want to be like young people.

Do they want to feel young? Yes. Do they want to be like young people? No. This is a distinction that seems to be completely lost on marketers.

The baby boom is Barack Obama and Tom Hanks. It is Bruce Springsteen and Condoleezza Rice and Yo-Yo Ma and Steve Jobs. It’s Stephen Spielberg and Magic Johnson and Jonathan Franzen and Oprah Winfrey and Jerry Seinfeld.

The idea that these people and their contemporaries want to be like a 25-year old barista or a doofus college frat boy is absurd. The belief that they aspire to be like the knuckleheads who inhabit Bud Light, or Taco Bell, or KFC ads is beyond ridiculous.

The marketing industry does not understand this. They think of baby boomers as grandma and grandpa. They are not. They invented the personal computer. They grew up listening to the Rolling Stones and smoking weed. They didn’t invent sex, but they invented the sexual revolution.

And yet, the idea that people over 50 want to be like young people is the hopelessly out-of-date fiction that the advertising and marketing industry clings to while they waste hundreds of millions of dollars pandering to people who don't and won't buy their products.



18 comments:

Anonymous said...

Totally agree, but just to pick nits, Brin and Page were both born in 73 so are not Boomers - definitely Gen X.

Anonymous said...

Over 50 is young now. People do not realise this at all. Good article!

Patrick Goff said...

Thank you. So many designers are young and don't think outside their own youth bracket. This especially so when defining luxury in hotels, where the 'yoof' market image dominates

Anonymous said...

Know your customer and see your customer real. The young ad hacks today see the world like themselves via a narrow and jaded lens... and try and say the world is like them. WRONG! Keep rockin' TAC!

The Ad Contrarian said...
This comment has been removed by the author.
The Ad Contrarian said...

Per Anonymous #1's comment, I have removed an ill-phrased sentence in which I stated that Google was "invented" by baby boomers. While Eric Schmidt is a baby boomer, he didn't "invent" Google.

David said...

The brands you cite are perplexing, though ... I don't know anyone over 45 who would willingly shovel Taco Bell or Bud Light into his mouth hole.

Can we add "• Develop Taste" to a list of yours somewhere?

Anonymous said...

To David - Thank you! Just what I was thinking.

geoff said...

Gotta agree with David's comment:
If ever a brand should be aimed at 20-something duffuses, it's Taco Bell.

Bad example, but valid points!

Paul Benjou said...

My niece just turned 50. I'm sending her this post.

Heather Physioc said...

It's as if the world has forgotten that when the world wide web, this pinnacle moment in technology and communication, really began to proliferate was 20 years ago -- when the over 50 demographic was in their 30s. No longer is the over 50 demographic the luddite, antiquated, low-tech generation.

Jim said...

So why do marketers do it? Why are the say happy to drink from the idiot well?

Chris S. said...

Jim,

That's where idiots usually go to drink, right?

I think it has a lot to do with the violent common-sense allergy that afflicts the industry. I mean, if having sense resulted in deep cuts to profits, reduced bonuses, clients catching on to the bullshit and so on, wouldn't you be allergic, too?

We're so totally screwed by the inmates running our asylum.

Lubomir said...

Hello,
I guess you will like this because of #3, and #4, and hate it because of #7 :)

http://mashable.com/2013/02/01/audi-super-bowl-ad/

Anonymous said...

I am one of those over 50s you're talking about. I'm 54, female, married without kids (by choice). College educated, both of us. We are pretty immune to ost advertising because we have seen it all before. I became consciously aware of ads over 30 years ago, and have sen a million of them since then. Also, I'm no longer status conscious. There are more important things in life than whether you have the latest this or that.

Most people 50 and over have kids in college, a mortgage, aging parents and are trying hard to plan for retirement. Why should they pay attention to ads when they have more pressing things on their plate?

Advertisers aim at young people because, despite their lower incomes, they spend more on stuff than older people do. For the most part, their expenses are rent, food, entertainment and clothes. they don't have mortgages, kids, and everything that comes with that.

Anonymous said...

Anonymous (the last one) I disagree, at least in my Country which is Norway, the 50/60+ group are more ego than ever. They're nearly done or done with mortgages, and care less about stashing for their kids and grand kids. They spend on themselves! Holidays, cars, bikes, tech - everything! My point: we've got two iPads (we're nudging 40). Our three kids have 2 iPads, Playstations, Wiis, TVs - and our parents (65ish) have iPads, LCD wide screen TVs, smarthphones...
Yet again I root for Mr AC!

Anonymous said...

So true. I recently got a glimpse into what the young whippersnappers think about the Boomer audience. A young AE wrote some sample copy aimed at a Boomer target. It read: "Get the most out of your Golden Years..."

Clearly, they think anyone over 50 is sitting in a rocker, knitting a tea cozy.

California Girl said...

I've sold broadcast advtsg for 30 yrs. If Boomers were the largest target market then, why wouldn't they continue to be? This post answers that frustrating question.