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Ordinary Wisdom of Advertising Demographics No Longer Applies

Posted by | Mar 19, 2013

To many in the advertising industry, those of us over 50 are small potatoes. After all, conventional advertising wisdom is that the Adults 18-49 demographic is the only one that counts. It’s the most coveted demographic. To this author, this kind of conventional advertising wisdom defies logic.

Conventional advertising logic is that the number of viewers of a television program within the 18-49 age range is more important than the total number of viewers. Television advertising rates are still, by and large, based on this premise.  

The 18-49 adult demographic was created in the seventies to label the large number of consumers that comprised the Baby Boomer generation. That generation will have completely aged beyond this demographic by the end of next year. With them go approximately 76 million Americans that make up this generation.

A recent article in the New York Times, Why Don’t Advertisers Care About Me Anymore is responsible for this post. I am at a loss to understand why advertisers still place so much importance and dollars on reaching the 18-49 demographic while discounting older demographics.

There are a number of reasons, but here are a couple that make sense to me.

  • Advertisers may like the current pricing methodology. With it advertisers have it both ways. Most commercials are targeted to consumers between the ages of 18 and 49. With this approach, the broadcast networks only get paid for impressions delivered to this demographic. In essence they get “free” advertising to people over 50 who might also end up buying the advertised product. Under this arrangement, television shows with an older demographic may be only able to charge half the rate per thousand viewers for advertising than a show with a younger audience, even if the former had a much larger audience overall.
  • Conventional wisdom defies our current understanding of consumer demographics. The reason that advertising is directed at the 18-49 age group is based on outdated research and assumptions that are no longer valid. Many of these assumptions were discussed in my previous post on this subject.

Advertising Shifting to Targeting Older Demographic Segments

Chief among these conventional marketing premises are that:

  • This consumer age range is more open to buying new products and changing brand loyalties than older demographics.
  • They also spend more on products and services as they become more independent and set up their own family and households
  • It takes more effort to reach the 18-49 age group, while older demographics are much easier to reach.

Because of the first two of these assumptions, advertisers spend 10 times as much trying to reach this age demographic as they do to reach the 50 and above age demographic.

A number of studies show that the first two of these premises are no longer valid for today’s 50 and over consumer. Unlike previous generations, studies by NBC, AARP, Gallup and others found that older consumers are open to changing brands. They are also increasingly tech savvy. They also spend money… lots of money. The NBC study estimated that Baby Boomers spend $1.8 trillion annually on food, cars, personal care and other products. According to research conducted by Hallmark channels unit of Hallmark Cards, Boomer households account for a high percentage of sales of products considered mainstays of a younger consumer demographic.

The first two assumptions are no longer valid. Given the third premise above, marketers for many products and services could get a greater ROI by advertising to those 50 and older. I’m reminded of the old adage, “a bird in the hand is worth two in the bush.” Now add the fact that the bird in the hand controls so much wealth and spending.

Advertisers are responding as I noted in my previous post. Pharmaceuticals, luxury-car brands, financial firms and travel organizations are a few industries that understand the spending power of this demographic. Others are slow to respond, still preferring to reach young consumers. 

I anticipate an increasing wave of advertising targeted to the 50 and over age demographic for many products and services. The sheer number of consumers of that age will force advertisers to reassess today’s “coveted” 18-49 age group.

Those that don’t will see a smaller ROI for their advertising dollars.

What is your experience with advertising to specific age demographics?

Do you agree with me?

Share your thoughts so we can all learn from each other.

Topics: Strategy, ROI

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