This is your sixth of seven free items this month.

To register, get added benefits and unlimited access to articles, Become a Member. Already a Member? Sign in.

Boom in Multigenerational Households Has Wide Implications for Ad Industry

A Look at Who's Making Decisions and the Opportunities at Hand

By Published on . 4

NEW YORK (AdAge.com) -- Jenny Rowland moved back into her parents' home for six months after college while she searched for a job. When Peter Radsliff's 90-year-old dad leaves physical-therapy rehab in the next few weeks, he'll return to his daughter's house, where he has been living with her and her children. And Rosemary Lichtman and her husband built their California home with a first-floor in-law quarters "just in case." It was indeed needed when her aging parents moved from St. Louis to live with them and their teenage sons.

They are all part of the accelerating trend of multigenerational households. Today 49 million Americans -- more than one in six people in the U.S. -- live in households with three or more generations, according to the Pew Research Center. The percentage is even higher for age groups 25-to-34 and 65 and older, where one in five, or 20%, live in these extended families.

Moreover, while the number of multi-gen households has been growing since 1980, the pace is quickening. Pew data shows that between 2000 and 2009, the number of those households advanced 33%. As such, the trend could have big implications for marketers virtually across the board in categories from housing to autos, insurance to package goods, necessitating a rethinking of everything from product sizes to how to reach these households and what members within them to market to.

"There's so much opportunity here that marketers are overlooking," said Ms. Rowland, who no longer lives at home and is VP-account planning at Trone, Highpoint, N.C.

While high unemployment and housing foreclosures of the recession have played a key role in the trend, Pew Research Center exec VP and co-author of its multigenerational household study Paul Taylor said it has been growing over several decades, fueled by demographic and cultural shifts such as the rising number of immigrants and the rising average age of young-adult marriages.

"One of the things that struck me about this change is that it's coming from all directions. More young adults moving back home, more elderly moving in with middle-age children and more middle-aged children moving with their elderly parents," he said.

Who's making the decisions?
Amy Goyer, AARP multigenerational issues expert, said the most common multigenerational household is one with a grandparent as head of household and his adult children having moved in with their children, an arrangement usually spurred by the needs of one or both to combine resources and save money. The second most popular is a grandparent moving in with an adult child's family, usually for caregiving reasons. She noted that 2.5 million grandparents say they are responsible for the basic needs of the grandchild living with them so it might be Nana, for example, buying those diapers.

The ultimate decision-maker in the multi-gen house depends on factors including economics (that is, who controls the money), health and independence -- especially for the older generations, and family dynamics. "The influence of the various household members depends on a lot of history -- what was the relationship like before? Collaborative and cooperative, or was one person more assertive and aggressive? Often, whoever pays the bills has a bigger voice, but if you're interested in keeping the peace, things should be discussed by the group," said Phyllis Goldberg, who along with Ms. Lichtman is a family-relationship expert.

Real-estate firm Coldwell Banker sees this in action. Diann Patton, Coldwell's consumer specialist said, "We see it in our office. Several generations all packing into the car and going out looking at homes together. They're making the decision as a family, and that's especially true if they're pooling finances."

Coldwell Banker has noted the multi-gen trend nationwide and in fact, queried its agents in a survey of more than 2,300 of them. Some 37% said they noticed that more families were looking for houses that could accommodate multiple generations. The top reasons cited were financial (39%) and health-care issues (29%), but a "strong family bond" was next (6%).

Mike Fischer, Coldwell Banker Real Estate's chief marketing officer, said while the study was national, local marketing is really the key. He and his team work on educating agents and giving them tools to package homes for multi-gen households. That includes changing descriptions of properties to appeal to potential buyers -- a fifth bedroom, for instance, could be described as in-law quarters with a separate bath -- and creating specialized tours of homes to help multi-gen buyers envision their brood there.

While real estate and home building may be obvious industries affected by the rise of multi-gen households, there are examples and opportunities in many other industries, such as toys, technology, travel, entertainment, automakers and financial-service companies.

Nintendo, for example, set out with a deliberate strategy with its DS handheld and Wii console to push across-the-ages and particularly to grandparents with games such as Brain Age and Wii bowling. And Toys 'R' Us has given out 20% off coupons to grandparents, acknowledging the statistic that grandparents buy one in four toys, four of every 10 children's books, and one of every five video games. Disney crafts everything from movies such as the "Toy Story" trilogy to theme-park experiences to cruise-line travel with a deliberate product and marketing strategy to appealing to all generations of a family.

But most multigenerational efforts are still gaining footing. General-trend statistics are being discussed and examined, but product creation and marketing strategy still being defined.

Opportunities at hand
Ameriprise Financial's advisers see the trend on an anecdotal level, said Suzanna de Baca, VP-client acquisition and field engagement. "Right now we don't address consumers in media or outside marketing overtly, but a good deal of our adviser training addresses multigenerational issues," she said.

The company knows, for instance, that 60% of women serve as caregivers to other family members or friends, which may mean leaving a job or reducing hours. Ameriprise advisers are trained to not only recognize the situation but to help those women be financially realistic about what caregiving means and how they need to adjust their plans.

Ms. de Baca said she thinks other financial changes will be wrought by multigenerational households. "Anybody who's had an elderly parent move in because of long-term care needs will go out and buy long-term care [insurance] for themselves because they've seen what happens."

Technology is another area ripe for innovation and solutions for not only the multi-generational household, but also the close knit multi-generational families who may not live together but are helping each other daily, said Peter Radsliff, CEO of Presto as well as chairman of the Aging Technology Alliance, and as mentioned above, part of a multi-gen family.

His company, Presto, worked with Hewlett-Packard to create the Presto Printing Mailbox printer that can receive e-mails and photos and print them with the click of one button. The product enables older people who don't use computers to be able to get emails and photos from usually younger family members who do. Presto recently added the ability to send photos directly from Facebook.

Trone's Ms. Rowland knows from experience what impact even a short stay at home can have on all generations. When she left college and lived at home for a time, she adopted her mother's recipes and brand preferences. And while she watched "Band of Brothers" with her dad, she convinced both parents to watch her choice, "Sex and the City." Her mother's viewing preference for "CBS Sunday Morning" in fact, sparked a habit that continues 10 years later.

She believes there are business and creative opportunities when tuning into generations under one roof. Creative executions could, for example, use humor to diffuse what can sometimes be a stigma of having to live in a multigenerational household, while also including the multigenerational faces families see in their own households. She noted that while TV shows such as "Modern Family" and "Parenthood" appeal to multigenerational households with their similarities, few of the TV ads that run during those shows reflect those situations.

On the product side, financial marketers could create products that would help these families manage budgets and shared expenses and food companies could market healthy family-style meals that appeal across ages.

And it could be a way to tap the baby-boomer generation's wealth, which is at about $25 billion or about 80% of the nation's personal wealth, according to the Grandparent Marketing Group. This demographic is often undertargeted and pigeonholed as unwilling to switch brands, but they love to spend on their grandkids, shelling out about $50 billion on them annually. Those kids, also known as millennials, are surprising similar to their grandparents' demographic -- both about 80 million strong, they grew up in tremendously prosperous times that ended abruptly.

While families living under the same roof usually have a financial incentive to do so, they also tend to have more discretionary income than single seniors or recent college graduates who are paying their own rent and expenses. Toy, book, travel, and car industries all could be targeting both groups, said Robert DiLallo, director of the New York office of the Grandparent Marketing Group.

"This really is more of a return to normal," he said. "Think about the '20s and '30s, when it was very normal for parents to live in their adult children's homes and for grown children to stay in the family home. ... Young adults moving out of the home [right after school] was really created by the baby-boomer generation."

In this article:

Comments (4)

Read These Next