Sometimes it is hard to overstate the cluelessness of the advertising and marketing industries.
We are exquisitely sensitive to every little gimmick or fad that pops up, and completely oblivious to dramatic, powerful change when it occurs.
The largest consuming group in the history of the world is moving into new territory and marketers are paying no attention. This change is vastly more important to business than mobile strategies or social media or content creation, or any of the other bonehead sideshows we are obsessed with.
The youngest members of the baby boom generation, the generation that changed marketing and essentially invented consumerism, are now turning 50. The oldest members are now over 65. These people are the financial powerhouse that drives our economy.
They control over 75% of the nation's wealth. They account for 50% of all consumer spending. They buy 62% of all new cars. They dominate 94% of all CPG categories. They are the target for 5% of all advertising!
Between now and 2030, while the drooled-over 18-49 segment is expected to grow 12%, the 50+ segment will grow at 3 times that rate.
Nielsen says “Boomers are the most valuable generation in the history of marketing." Yet the marketing industry essentially ignores them.
When it deigns to talk to them, it treats them as if they are a bundle of maladies that need remediation.
How can this be? The answer is simple. Marketing "leaders" are mostly mediocre lemmings who live on the fumes of fads and on leftover legends.
80% of all workers in the professional and business services sector are under 55. They are completely out of touch with the reality of who the consuming public is. They cannot see beyond their own noses and their own narcissistic vision of who buys things and why.
These people are frantically pissing away money and resources developing mobile Facebook apps for the .1% of the population who might ever use them and completely ignoring the people who actually buy the things they sell.
They operate under a set of fictitious beliefs about people over 50.
- That they are more (or less) brand loyal than younger consumers. Nonsense.
- That they are more price-conscious than younger consumers. Also nonsense.
- That they spend less money than younger people. Major nonsense.
Every time someone with a functioning brain points out that people over 50 are a way better target for most advertisers, some knucklehead drags out a variant of the "lifetime value" fairy tale. Last week, the stupidity of this argument was exposed in a study published by the journal Science.
According to The New York Times a team of psychologists released a study which discredited what they call "the end of history illusion" i.e., the illusion that things will remain as they currently are and we will stay like we are now.
"..when asked to predict what their personalities and tastes would be like in 10 years, people of all ages consistently played down the potential changes ahead... People seemed to be much better at recalling their former selves than at imagining how much they would change in the future."Why? According to one of the authors of the study we simply do not realize "how transient our preferences and values are..."
The "end of history illusion" is the intellectual fallacy behind the "lifetime value" fantasy.
The idea that someone who is 20 today will be wearing the same clothes, driving the same car, drinking the same beverages, shopping in the same stores in 20 years is absurd. Yet this is the rationale marketers use to justify the vacuous strategy of chasing young people and ignoring the people who have and spend most of the money.
The marketing and advertising industries have feasted on the 18-49 group for several decades. What they do not yet comprehend is that the people who made the 18-49 group so valuable have left the building.
That game is over. A new game has begun. And today's dopey marketers are too busy admiring their "likes" to notice it.
In Other News...
I'll be speaking this Tuesday to the AAF/Ad Club in Reno, NV. The talk is themed "The Golden Age Of Bullshit." If you're in the area, please stop by and applaud.
20 comments:
God I love reading a good TAC post
This is good stuff, thanks Bob.
LTV done right isn't an excuse to target only the young, and it's way over simplified to say it assumes people's preferences don't change.
Good LTV measurement takes into account that folks change preferences, purchasing habits and brand loyalty.
Good piece. I would suggest that the myth of the value of the 18-49 (or even more annoying, 18-25) segment was actually created in the first place by the existence of the Boom generation. Seeing that demo dominate spending, marketing types cast around for a Big Idea to explain what was going on -- you know, something more sellable than "there are lots of them and they spend freely because unlike their parents they grew up in prosperity" -- and lo and behold, LTV was born.
Happy New year TAC, looking forward to more great insights.
But keep in mind when you're on this particular rant is that who you target and who you reach are not the same thing.
The so-called (and I hate the term) lifestyle brands are driving a lot of this. I think the idea is that even if you aren't young, you want the product promise to be something about feeling or appearing young.
Unfortunately, appearing stupid is never something they think about when writing those targets into briefs. Luxury car makers, when they feature people, look for good-looking middle-aged people at best. At worst, they get young people who realistically couldn't afford a goddamn Audi or BMW on the whole.
I think this is all part of marketing's endless war on reality and common sense. If people are more in touch with reality and have common sense, they're less likely to spend time listening to the useless drivel that is 99% of marketing. They don't need a 70" TV, a new phone to replace the one they got 6 months ago, or a car that runs on electricity and flowers. We want them to need it, but they don't.
The good ads always stand out. That I don't see many right now is a real pity. And fucking scary.
Two things I'd point out:
(1) What KL said above - just because you want to sell to the old crusties, doesn't mean they want people to assume they are old crusties. Perhaps they prefer advertising which still speaks to them as being the younger person they still feel like they are?
(2) I get the impression you're talking about the medium of advertising though, not the content. In that case, while it's true the boomer demographic is growing, and they are indeed a rich demographic... but why is it nonsense to focus on the kinds of models which appeal to a younger demographic? It shouldn't be our exclusive focus but, while they aren't growing the fastest, the people who are 20 now will be 50 one day, and while their preferences might change, their being accustomed to the digital space won't. Surely we want to best understand how to exploit this space now, and grow with them?
Er, also, contrary to what Chris Seiger says above: good advertising, like good cinematography, doesn't stand out. It does exactly what it's supposed to do: shift product.
Also, what's the problem? That marketing is unrealistic, that it doesn't reflect how the world is, that it distorts desires and presents some things as more important than they really are?
Yes... yes that is the name of the game...
Sounds about right to me.
I've been screaming about this since 2003:
Advertising to Baby Boomers
On to other subjects - stilly stuff for your posts:
Social Media Predictions
Selling Soap
You could call this The Power of the "Silver Dollar".
Tell you haven't heard "SIlver Dollar" before. I'd be proud if I could claim to have coined a name for the next big marketing trend on the horizon. ;)
I can only talk kfor myself. I am over 50. There are preciously few things that got me early. Music. But not all music. A few brands. Like Coca Cola. But I woudl neve engae with Coka Cola. I just like it. And tend to prefer it over Pepsi. Levis? No, acutally, today I buy my jeans at Zumies, a skate and board store (Lucky that my size is still the same as when I was 20 so I can shop for myself where I also pay for my kids clothes). And UniQlo. Neither existed when I was younger Cars? Nope. Some of the makes I'd consider now didn't even exist when I was 18. Or were hopelessly wrong. Japaneseand Korean. Amnd so it goes with just about every category. Rest assure that cathing today's younger generatios for life will be even harder. Your article is spot on. I can bet my youth on it. About time our industry wakes up to the realities. But that's probably asking too much the way we award and reward ourselves and the way the press plays along.
I do agrre with Rory's first point. I would't want to see the outer me in an ad. The inner me however is young and exuberant.
Interesting argument that I largely agree with (other than the crap about consumerism basically starting with the baby boomers), but where are the sources for all these stats and refuting statements? I only see the one link to the 'end of history' fallacy study.
@Rory – Of course the goal is to shift product. Sameness and invisibility don't really do that in my experience, but if it works for you, kudos.
and as usual, forgiebeve my typos. it's a disorder of sorts. it doesn't affect my IQ. it's below 43 anyway.
Great first TAC post of 2013! I'm looking forward to a year full of engagement with you! No, but really looking forward to your curmudgeonly TAC posts around the brand babblers.
My company loves marketing to youngsters. I'm in fact a youngster myself (26 yrs). And the honest truth is that I don't give a shit about a brand. Yes I think some brands are better than others for a myriad of reasons - but it all boils down to product. I don't want to engage, have a conversation with your brand or share with all my facebook "friends." I want to buy the best things at the best price.
The ad campaigns look and "feel" nice, but the youth never seem to want to give us their money. Could you provide the source for your data? I'd like to show these so-called "marketeers" that they got it all wrong. Data helps prove those bogus brand babblers wrong.
"They control over 75% of the nation's wealth. They account for 50% of all consumer spending. They buy 62% of all new cars. They dominate 94% of all CPG categories. They are the target for 5% of all advertising!"
Perhaps this is so because they buy things for their children and grand children?
Sheldon,
Most of the the data come from a study by Nielsen called "Introducing Boomers: Marketing's Most Valuable Generation."
BH
Which is available here: http://www.nielsen.com/us/en/insights/reports-downloads/2012/introducing-boomers--marketing-s-most-valuable-generation.html
Thanks for the belly laugh Bob! LOVED this post and responded by buying 101 Contrarian Ideas About Advertising.
Your cutting insight into this topic and the industry at large is refreshing and, frankly, a huge relief. A relief? Yes, it's comforting to know that opposite the lemmings are those who have developed antibodies to the hype and BS that are so typical of the industry.
As for your subject matter. You called it - the Emperor is indeed naked.
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