You'd think this onslaught of newly freed-up money would be cause to celebrate on Madison Ave., but Barron's noted in March, "It's something the advertising and marketing industries will have to come to grips with, something they're not too enthusiastic about."
The demographic that gets all the attention, of course, is the 18-to-49 crowd, which can be depended on to buy many tubes of toothpaste and cars during their gainfully employed years. Older people get treated by advertisers "like crazy aunts and uncles who show up uninvited for Christmas dinner," as Barron's put it.
Funny thing is happening
But a funny thing is happening on the way to the old people's home. Boomers -- those born between 1946 and 1964 -- and even their immediate predecessors are using their so-called golden years to indulge their passions, whether it's to start another career, go back to school, do charity work, travel, cook, play sports.
After conducting focus groups for Investment News, our publication for financial advisers, GfK Customer Research North America concluded, "It is clear that respondents' retirement years will be very different from the traditional view of the relaxed, sedentary retirement of their parents." Nearly all respondents expect to lead active, fulfilling lives.
The ad business is woefully out of touch with baby-boomer buying power. Young ad people think older people are stuck in their ways, so it's a waste of money to try to get them to change brands. But at the What's Next Boomer Business Summit, AARP's chief brand officer said 60% of people over 40 research different brands before making decisions.
The sad fact is that older people aren't worth as much to advertisers as younger ones. If it weren't for prescription-drug and denture-cleanser ads, the nightly TV news programs would go broke. Barron's said that Food Network celebrity chefs didn't want anything to do with its article on boomers because "the talent doesn't really like to be associated with an older group" -- it brings in lower ad revenue.
Richest consumer group
Barron's estimates a prime-time TV show with most of its viewers in the 34-to-49 range can get 30% more per ad minute than one that caters to people 55 and older. Yet consumers age 50 and up already spend more than $1.7 trillion on goods and services a year, and the 78 million baby boomers are richer than any group in history.
Try telling that to a 24-year-old media planner. It's hard enough to get them to evaluate an integrated marketing plan on the basis of overall effectiveness rather than take it apart and judge each component on a CPM basis. What chance would a magazine have that tried to convince media people that their over-50 circulation actually had value?
Agencies like to think of themselves as the last bastion of creativity, but they're in many ways the most calcified part of the process. Enlightened clients are beginning to realize this resistance to change is holding them back; the next step is to bypass their agencies' counsel.
Investment News found many of the 55- to 65-year-olds in our focus groups didn't see the need for an investment adviser, prompting Editor Jim Pavia to call for a national ad push "that focuses on a basic guide to personal financial advice." He suggests "Got advice?" along the lines of "Got Milk?"
Jim's serious point was that financial planners have a "basic responsibility to join together to ensure consumers understand the benefits of the financial advice that is readily available to them."
And while we're at it, how about a campaign headlined, "This is not your grandfather's grandfather" to show that today's older person represents a hot prospect?