Booming Buying Power
Advertisers Finally Starting to Realize Benefit of Targeting the Wealthy Demographic
Baby boomers spent $3.8 trillion in the United States in 2007, a figure that’s projected to rise to $4.6 trillion by 2015, according to eMarketer.
That’s a heck of a lot of spending power—more than any other demographic—yet the older consumers get, the less advertisers want to reach them.
That’s one of the quandaries in the advertising business, an industry that throws most of its dollars at younger consumers who don’t have as much spare change as older folks. The focus on youth isn’t likely to change, nor do most advertising experts think it should.
However, some advertisers are starting to pay more attention to boomers and their wallets. What’s more, marketers are looking into how to reach them online.
“The old story of all advertisers wanting to focus on the 18 to 49 demographic is fading, because the boomer audience is continuing to grow and they control a tremendous amount of spending,” said Adam Kasper, senior VP and director of digital media at Media Contacts, a division of media agency Havas. “Advertisers are lagging behind a little, but they are starting to realize there is money here.”
Some advertisers, such as financial services firms, already are hip to older demographics. A Forrester study found that 43% of male boomers have more than $100,000 in investable assets.
Boomers also are going online for health information, and the pharmaceutical category is leveraging online buying and selling increasingly, Mr. Kasper said. This year will bring an explosion in health content online targeting boomers. With that content will come ad dollars as well as ad networks that specifically target health content, Mr. Kasper said.
More than 82% of Internet users 45 and older are researching or reading information online on health and wellness for themselves and for their families, according to a recent study by ThirdAge, an online and direct-marketing firm targeting older demographics.
Already sites that target boomers with health information are seeing a boost. “We’re seeing a tremendous increase in overall online buying activity this year,” said Raj Amin, CEO of digital network HealthiNation, which distributes videos both online and via video-on-demand. A lot of the regulatory issues that plagued the pharma industry last year have been resolved relative to the display of side effects and prescribing information in a banner or video companion banner unit.
“We’re also seeing a large increase specifically in campaigns that want to run against online video, because health is an emotional topic and needs video to tell the story, and TV is not an option for all brands,” he said. “The age of the audience is also exciting to health advertisers. HealthiNation’s online audience is an average of 15 years older than our cable on-demand audience, meaning that 50-plus viewers are seeking health info online and advertisers are following them there.”
Boomers are online more and they are using the Internet for more activities. They look at pictures, listen to music and play games. But people over the age of 50 spend 90% of their time online on about 15 Web sites, said Jeffrey Cole, director of the Center for the Digital Future and a research professor at the University of Southern California. Those aren’t the same sites across the board, but they usually include news sites, finance sites and search engines, he said.
“As boomers move into their 70s, 80s and 90s, they are taking the Internet with them,” he said. “We know it is an essential part of everyday life. The takeaway for a marketer is they have to be there and the Internet is increasingly one of the most effective ways to reach people.”
ThirdAge recently finished a study that found 83% of “baby boomers” and “midlifers” access the Web using broadband.
The top three reasons respondents in the ThirdAge study spend time online are to seek out information (92%), to stay in touch with friends and family (95%) and to research products and shop online (73%), said Sharon Whiteley, CEO of ThirdAge. The study also found other activities of high interest include general browsing of the Web (95%), reading articles of interest (91%) and researching products before purchasing offline (86%).
Boomers use the Web in a more functional fashion to find products and services. They aren’t as engaged in today’s trendy Web 2.0 activity, such as blogging, online video and social media, said Mohan Renganathan, VP and digital director at MediaVest USA. “The part of the boomer generation going online to find that day’s funny video is such a smaller percentage than the 18 to 34 set,” he said.
Advertisers often look to reach boomers on popular sites such as CNN.com, ABCnews.com, Yahoo Finance and NYTimes.com. “We are finding them in games as well. But I don’t think we can say there is a formula to market to boomers,” Mr. Renganathan said.
Youth Still Rules
There’s still not a rush of ad dollars to the boomer market. The media culture of today still worships youth and most marketers consider the 50-plus demographic personae non gratae, except for erectile dysfunction remedies, the travel industry and luxury car makers.
Still, boomers have money and they are influential, said Brad Adgate, senior VP of research at Horizon Media.
In the next 15 years, the 50-to-64 age group will grow by 50% and the 65-plus population will grow 32%, Ms. Whiteley said. By contrast, the 18-40 demographic will grow only 3%.