A Guest Commentary by Chris Dorsey
Ad agencies and media buyers so covet the 25-54 age demo that network executives are forced to program for that group of TV viewers or risk watching their ad dollars drift to those networks who do. Increasingly, however, many viewers—especially some of the most affluent and active–are left searching for programming that speaks to them…in more than one or two syllables. The question top of mind for a growing number of network programmers, though, is why all the fuss over the 25-54 demo?
While Nielsen is often sourced for perpetuating the magic of this age demo, their own research and communications have done much to downplay the importance of the tired 25-54 axiom. “A general understanding of those over 54 is lacking,” says Nielsen’s Pat McDonough. “Many of the long-held beliefs about this group’s purchasing and media habits are just plain wrong.”
So for a growing number of networks and advertisers, they’re stepping back and taking the time to reexamine the validity of the 25-54 sweet spot. In the process, they’re dispelling myths about our aging population as they begin to free the television industry from its antiquated perception of viewers once and for all.
Myth 1: Most of the wealth in America is controlled by people in the 25-54 age demo. Fact is, 75 percent of the money in the country ($28 trillion, according to the Federal Reserve) resides with boomers over 55–and that percentage will continue to grow. According to Nielsen, Americans over 55 dominate purchases in 119 of 123 major consumer categories. Boomers outspend other generations by $400 billion annually and possess three times the net worth of younger generations, according to the U.S. Consumer Expenditure Survey. And the good news for networks is that people over 55 log the most hours watching television each day (6.5 hours) of any age group.
When it comes to major purchases, Boomers have replaced their children as the number one buyers of automobiles. According to a University of Michigan study, the 55-64 age group has become the age bracket most likely to buy a new car. The Boomers replaced the 35-44 year old age group, who were most likely to buy a vehicle five years ago. As for home purchases, nearly 40 percent of new homes are purchased by those over 50, according to the National Association of Home Builders.
“By 2020, almost 45 percent of U.S. households will include someone that is at least 55 years or older,” says NAHB spokesman Stephen Melman. And nearly 60 percent of household incomes over $85,000 are made up of those over the age of 50, according to the National Association of Realtors.
And the wealth gap between young and old in America is the widest ever–and it’s getting wider. From census data, the typical U.S. household headed by a person age 65 or older has a net worth 46 times greater than a household headed by someone under 35.
Myth 2: It’s difficult to influence consumer buying behavior in older Americans. “The misconception is that spending drops for people in this age group,” says Nielsen’s Joe Stagaman, “and that they’re set in their ways. But those in the 55+ age group are just as likely to switch brands as those aged 25-54, and the two groups’ buying rates almost match.” And a detailed 2011 demographic report from Nielsen goes on to say, “Marketers who are only focusing on the traditional 25-54 age demographic are missing about 58 percent of the U.S. population totaling 180 million people, overlooking tremendous growth opportunities as baby boomers age.”
Myth 3: Boomers aren’t as tech savvy nor as active as younger demos. According to Jupiter Research, one third of the roughly 200 million internet users in the U.S. are over the age of 50 and spent an average of two hours more on-line per week than Millennials (16-34), representing the web’s largest constituency. Two-thirds of Americans 50+ buy from e-retailers online according to Pew and they spend $7 billion each year on web purchases, far more than any other market demo.
Boomers purchase 25 percent of all toys, account for 80 percent of all luxury travel, and are the fastest-growing age group among gym members, up more than 266 percent since 1987. According to the Census Bureau, “Demographic trends associated with the aging of the baby boomer population, plus gains in longevity, will grow the 50+ market to over 106 million by the end of 2015 when they will account for fully 45 percent of the adult population.”
Advertising directors and ad agency executives who don’t embrace the country’s aging–but influential, active, and affluent demographic–are leaving the door open for their competitors to capture those super-charged buyers and viewers.
One Nielsen report went on to caution, “Those over 54 need to be an integral part of the marketing mix, not only because of their growth rates, but because of their value as consumers and relevance as media users–and examining the 55+ market reveals incredible opportunities.”
“Overall, we need to adjust our marketing mix as we understand who we are truly reaching,” says Nielsen’s McDonough, “…and more importantly, who we are missing.”
Question is, can ad agencies and content creators and distributors age gracefully and embrace America’s changing viewer? Or will they stay wed to old-line perceptions and wonder where their audience and consumers have gone?
Chris Dorsey (pictured below) is the President/CEO of Denver-based Orion Entertainment, which produces lifestyle programming, including branded entertainment. The company can be found on the Internet at www.orionentertainment.com