You might guess that “NCIS” is the second highest-rated show in the Nielsen ratings because it had the second-highest viewership — 19 million people in any given week, trailing only to “Sunday Night Football.”
But to advertisers, 16 million of those don’t count: They’re over 49.
So “NCIS” was to Madison Avenue only the 11th highest-rated show, with three million or so 18- to 49-year-olds watching.
Hip young ad buyers think of potential customers over 50 as clueless oldsters yelling for the sound to be turned up or baffled by any technology more recent than the typewriter.
Marketers spend only about 5% of their ad budgets on viewers over 50, according to the senior-marketing firm Coming of Age.
But here’s the rub: Americans 50 and up buy nearly half of all consumer packaged goods.
So why isn’t the advertising industry recognizing the importance of people over 50? How much longer can it continue to ignore empirical evidence and hard number crunching in favor of superstition, hunches and ill-informed prejudice?
To put it another way, as Matt Carmichael points out in his new book “Buyographics,” when will marketers realize that 55-year-olds whose houses are paid off and whose kids are out of college have a lot more money to spend than 25-year-olds staggering under the weight of their student loans and struggling to hold onto their McJobs?
Even if your hair is gray, your money is still green.
Compare the situation seniors are in to that of the fast-growing Latino market. No one would ignore such a lucrative group, much less offend them, right?
Seniors aged 65 and over are outnumbered by Latinos (by 10- million) — but they spend more. A lot more. Last year they spent nearly a trillion dollars more than Latinos. Online? Seniors spend more than $7 billion on the Web each year, and they make up more than a third of all social media users, Coming of Age reports. Some 39 million Americans 65 and older are using Facebook, Twitter and/or Skype.
The median age of an American head of household is now over 50. So marketers focused on the 18-49 demographic are now ignoring most American heads of household.
Of course, older Americans haven’t completely avoided the economic thrashing of the past six years. A decade ago the median net worth of retiring seniors was $227,000. Today that figure is down to $180,000. Among 55 to 64-year-olds, median net worth took a huge hit of $85,000 since 2007.
But seniors are responding by going back to work, if only for the insurance. Only 10.8% of seniors were working or looking for work in 1985 but that rose to 16% in 2007 and today it’s over 19%, the highest level since 1964, just before Medicare was created.
Seniors were standing on higher ground when the financial hurricane hit. Millennials were down at sea level. The average net worth of 29- to 37-year-olds is now 21% less than it was in 1983, in inflation-adjusted dollars. Some 34% of Millennials have moved back in with their parents to cut costs, while surveys have shown that young adults are saving more while carrying more student debt and putting off marriage, home buying and car buying. (Not even half of teens who qualify for a driver’s license have one.)
The Millennial unemployment rate is 16%, but even that number is far too cheerful: a Harvard study found that young adults are retreating back to school, taking part-time work or dropping out of the workforce in frustration, meaning that just three in 10 of them hold full-time jobs. Studies of the 1982 recession have shown that when people are just entering the job market in a harsh economic climate, they never do make up the lost income.
So what exactly is the point of all of the youth-targeted culture and advertising? The marketers are like an army of hungry desperadoes fighting over one tubercular chicken without noticing that behind them a herd of healthy cattle is grazing quietly.
Households headed by seniors have more than 20 times the net worth of those headed by those 35 and younger. That ratio has only grown over time: In 1984 that ratio was close to 10-to-1. Are they really worth only 5% of the advertising? And seniors are the only age group in which inflation-adjusted income has increased since the 2007 recession began.
Advertisers are beginning to wake up, but they’re still a little freaked out by the idea of leaving their Apple meets “Logan’s Run” imaginary world where everybody is under 30.
“One of the problems that scare marketers is, if you actively market to seniors, is that a turnoff to everybody else?” Paco Underhill, the retail analyst and author of several books on the subject, told Carmichael. “Do you want to go to the supermarket that caters to geriatrics? I don’t know if that’s a legitimate concern or not, but it is something that goes through the minds of both merchants and marketers.”
Fear of being publicly associated with seniors is a superstition worthy of those Boston Red Sox players who thought that shaving might cause them to lose the ability to play baseball. Southwest, an especially senior-friendly company that, for instance, sponsors “honor flights” for WWII vets to visit the monuments in Washington, DC, categorically denied to Carmichael that it advertises to seniors.
Toyota, which designed its Venza model specifically for older Americans, didn’t use any seniors in TV commercials, instead featuring 50-ish parents with their Millennial kids. One spot featured a Millennial worrying that her parents don’t have any online friends. Cut to: the parents out on a biking adventure with flesh-and-blood friends. That’s a start.
The notion that seniors are set in their ways and resistant to change (another reason advertisers write them off) is belied by the recent example of Rite Aid, which made a big push to entice seniors to switch their prescriptions to the chain from its rivals.
You could hardly think of a tougher challenge in marketing: Prescriptions are important; the people who rely on them don’t want to risk an interruption and they largely don’t pay for them anyway (Medicare Part D does that), so it’s hard to give them an incentive to switch.
Yet by touting the benefits of its reward program (members receive a 20% discount on the first Wednesday of each month) in a major advertising campaign featuring actual old people, Rite Aid signed up more than 900,000 seniors. In the spring it reported its first profit in six years.
Seniors can be sensitive about having too much attention called to their age. They divide roughly into two groups. The “young-old” may take a few more pills than the average American but otherwise live pretty much the same kinds of lives as other adults. They don’t want to be confused with the “old-old” who have serious medical problems and difficulty caring for themselves. And the “old-old” would rather not think about their position either.
When Heinz noticed that seniors who had difficulty chewing were buying Gerber baby food, they tested pureed food aimed at the dentally challenged. It flopped: Seniors were embarrassed to be seen buying pureed food for adults, whereas putting Gerber’s in their carts simply made them appear to be caring grandparents.
Old people also have images of themselves as younger than they are, so actors should be slightly younger than the people to whom you’re trying to sell.
“Unless they are ill or depressed, older people do not feel ‘old,’ ” concluded scholars Don E. Bradley and Charles F. Longino Jr. in a 2001 study.
Marketers forget that there are lots of products oldsters buy that we don’t necessarily associate with aging.
“It’s no secret that, next to kids, old people are the biggest market for sneakers,” Underhill writes in his book, “Why We Buy: The Science of Shopping.” And seniors have a lot more money to spend on sneakers than high-school students do. “Still, no self-respecting kid wants to wear the same athletic shoes as Grandmom.”
But aren’t there already a lot of Ednas and Ediths wearing Nikes? I don’t see eighth-graders losing interest in the brand. Eighth-graders judge what’s cool by observing what their peers and idols are wearing. They don’t even notice what Granny has on her feet. Nike would be smart to market a shoe for the olds and advertise it on “NCIS,” where no young person will hear about it anyway.
Other products aimed at seniors will step out of the shadows. As Underhill puts it, “Somebody is going to have to figure out how to sell incontinence products to aging boomers. The current category — a few low-key brands of adult diapers sold sheepishly in the feminine-hygiene aisle isn’t going to cut it. Will it be Hanes, Calvin Klein or Estee Lauder?”
Taco Bell gets it: Its “Viva Young” Super Bowl commercial earlier this year showed old folks led by an 87-year-old wild child sneaking out of assisted living for some unassisted living it up — partying, pranking, getting tattoos, general debauchery. Young people loved the ad. Old people loved it. It was the top-rated commercial of the entire evening, according to a TiVo survey. And no, burritos didn’t suddenly become as uncool as Dentu-Creme.
If advertisers are wise, they’ll stop writing off a huge segment of the population and come up with more of this kind of spot: Let’s have more badass grandpas.
Buyographics: How Demographic and Economic Changes Will Reinvent the Way Marketers Reach Consumers
By Matt Carmichael
Palgrave Macmillan