Maybe Peter Pan Should Move To Madison Avenue

According to McKinsey Consulting, by 2010 50% of all consumer spending in America will be by people over the age of 50.

And yet, the average age of an advertising agency creative person is 28. In fact, nationwide, less than 5% of agency personnel are over 50.

The boy who never wanted to grow up would feel at home in just about any of today's advertising agencies, right alongside other young, bright, talented people whose job it is to create messages for a world of consumers who look, act and feel just like they do.

In advertising parlance, it's called targeting the "sweet spot."

The sweet spot is people aged 18 to 34. Ninety percent of today's marketing dollars are spent trying to reach this group. Marketers lust after them, and media companies do everything in their power to lure them to their websites, magazines, and TV channels.

Which makes perfect sense. Or at least it did in 1975.

Because in 1975, people 18 to 34 were smack in the middle of the baby boom. They were the sweet spot of the sweet spot, the "pig in the python," the largest group of consumers in history with the most money to spend in history. In the '70's and '80's and even some of the '90's, boomers could make or break a brand.

They could also make or break an advertising agency.

Thanks in large part to the baby boom, Madison Avenue found itself in a gilded age. Agencies that knew how to reach the 18-to-34 age group attracted the best clients and the most income.

Along the way, 18-34 or "youth" became not only the sweet spot of marketing, it became the only spot.

Unfortunately, biology being what it is, 30 years later, the "pig" has moved to the other end of the "python." Today, the boomer group is still the largest group of consumers with the most money to spend. But their average age is 53, not remotely in the sweet spot or in the sights of most marketers.

If you find that surprising, the following will downright shock you:

  • People 50+ earn $2.4 trillion annually compared to $1 trillion for the 18-34 group.
  • According to McKinsey, people 50+ generate 41% of all disposable income.
  • They buy 60% of all packaged goods, over half of all new cars and spend 75% more per vacation than consumers under 50.
  • In 2007, people over 50 spent 3.5 times the national average holiday shopping online.

And yet, nationwide research by AARP shows that the majority of consumers over 50 feels that advertising and marketing either portrays them negatively or ignores them altogether.

Why? Because it's being created by people at least 20 years younger.

Last year, Adweek ran an article whose headline speaks for itself: "War of the Ages: How a host of new agency realities are pushing boomers out before their time."

In other words, the advertising industry is not only being run by Peter Pan, but, just as Peter didn't understand the adult world, today's advertising industry doesn't understand the aging adult consumer. It thinks people over 50 are simply kids with graying hair who want and need all the same things that 30 year olds want and need. The truth is, they don't.

While the average 55 year old might want the body of a 30 year old, s/he doesn't want the brain of a 30 year old. Boomers have become smart, savvy, worldly, respected and ready for the next chapter of their lives. And they want to be marketed to in a way that understands and respects not who they were, but who they are. In Neverland, grown-ups were the enemy. In today's economy, they are the people with the money who can buy your product.

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Tags: baby boomers
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18 comments about "Maybe Peter Pan Should Move To Madison Avenue".
  1. Lynda Partner from Partners Marketing Inc , June 22, 2009 at 1:14 p.m.

    This is a great article but you are missing out on so many opportunities to have it forwarded along - where is the "share" icon, or at least a URL that I can retweet! I know 18-34 year olds are not on Twitter but we 40 somethings are and I know my following would love to read your stuff, if I could only get it from my inbox to my twitter account.

  2. Paula Lynn from Who Else Unlimited , June 22, 2009 at 1:31 p.m.

    And there are those who still wonder why Madison Avenue is stuck in a labyrinth.

  3. Arthur Koff from RetiredBrains.com , June 22, 2009 at 1:34 p.m.

    Our Website RetiredBrains.com targets boomers and seniors. We have seen a huge increase in visitors year after year since we went live in 2003.

    What is particularly interesting is that our average number of page views is 5+. This is because we are an informational site that does not allow banners and pop-ups but rather informational links back to advertisers.

    Boomers and most older Americans prefer information as opposed to banners; at least that's what most of our visitors tell us.

  4. Jeff Bach from Quietwater Media , June 22, 2009 at 1:54 p.m.

    Smack on target. It is amazing that Madison Avenue seems to have such a hard time following the money.

    Does this by extension also mean that MadAve clients (e.g. manufacturers) also do not know where the money is? Do businesses still not know who their customers are?

    In my niche, outdoor recreation, and specifically paddlesports, too many creatives and manufacturers seem to think that extreme sports (e.g.kayaking) is the way to advertise their product. Yet, if you look at who is buying and who is participating, it is boomers and women. Frustratingly (new word for the day), way too much creative is focused on the Red Bull-fueled punks hucking themselves off of a cliff.

    That this disconnect has endured so long is somewhat disconcerting. If Madison Avenue is wrong why is change not occurring? Or does the fact that this behavior seems to be continuing, tell us that the 18-34 demo still dominates the marketplace and that boomers and their money are insignificant?

    great article!
    Jeff Bach

  5. Greg Zerovnik from Zerovnik & Co. , June 22, 2009 at 1:57 p.m.

    I have been watching ad agencies sack their best people for years because they were seen as "no longer in touch" with the 18-34 demo. It's way past time that agencies "grew up." But let's face it, blaming agencies is actually the wrong target--it's the total idiots that pass for marketing VPs and directors out there in client-land who are most to blame. Perhaps there's a reason here for why the CMO position has the shortest average tenure for any C-suite exec. They keep aiming too low!

  6. Chuck Nyren from Advertising to Baby Boomers , June 22, 2009 at 2:12 p.m.

    I've been screaming about everything in this piece for years - in articles dating to 2003, a book published 2005 and in paperback in 2007 (selected as a classroom resource by The Educational Foundation), in a blog (still going strong). It IS my presentation during national and international speaking gigs. In 2007 Rance Crain wrote a few pieces making the same points. <P> Google 'advertising to baby boomers'

  7. Dyann Espinosa , June 22, 2009 at 3:15 p.m.

    So accurate. And has been for some years. To a certain degree, I think agencies are hiring younger people because they are cheaper and (supposedly) more malleable. So you have poorly trained, overworked, underpaid people who start out starry eyed about the agency biz, then get fried by the process and leave.
    Today's economy is accelerating the speed of the squirrel cage.

  8. Chris Conderino from CC Media and Marketing , June 22, 2009 at 4:06 p.m.

    Thank you Brent. This was a very satisfying article to read. But what is happening in the ad biz is a reflection of a societal dynamic that has been pervasive in our country since it's inception. We have never been a society that revered or respected our aging population. Baby Boomers were probably the most egregious as this is the generation to have effected the greatest change in modern history across all aspects of life and age groups. Only now are we recognizing the value of the "seasoned" demographic.
    The 50+ ad exec is becoming virtually extinct, being driven out of agencies in record numbers. This is the generation that built modern marketing and spent the last 30 years observing consumer reactions, lifestyles and purchasing habits; forming the models marketers use to grow their businesses. These principles don't change because there are new toys to consume. BUT with CMO's no more than 35 years old, and HR recruiters no more than 35 years old and "senior-level experience" being defined as 5-7 years, the industry is loosing a big brain trust.

  9. Virginia Suhr from Greenstone/Fontana , June 22, 2009 at 4:43 p.m.

    Before the first "internet" bubble burst, the interactive clients' would only advertise to highly educated white Males 18-34 ,assuming that young women and Adults 35+ would never use the internet to any extent. Today, internet users are of all ages, both sexes, and many income levels and ethnic backgrounds. This strategy was a bad call by the industry then, but ad agencies still not have learned. Baby boomers are highly educated, tech-savvy, and adaptable individuals. By eliminating them over the last decade or two from the marketing and advertising industries, a disconnect between the purveyors of goods and the consumers has occurred.

  10. Langston Richardson from Cisco , June 22, 2009 at 5:36 p.m.

    I have two perspectives:

    1.) I wonder when this reality will reach a tipping point. If we look at the mismanagement of the financial sectors which were decades in the making, can we make the same conclusion of the false assumptions of advertising and marketing will trigger a correction?

    There is no wonder that many 37+ years olds have either "retired" or created their own firms to escape the hubris of the agency world.

    2.) Many of the leaderships of all agencies are older and not the younger and cheaper talent. I think that a big reason that agencies are younger is because of the expectations of rewards and burn out factors. This wasn't noticed when the 18-35 aligned with the baby boomer generation. Now it's Godzilla.

    Twitter: @MATSNL65 @lazbro

  11. David Weinand from Edgell Communications , June 22, 2009 at 5:38 p.m.

    Great piece - of course, the most frustrating component will be that those under trained, over worked 28 year olds agency folks will read this and in their all-knowing Gen Y manner, will chalk it to bitter old guys ranting because we're past our prime.....(and i'm just on the north side of 40....)

  12. Karen Waller from Spot Media Group Advertising Inc. , June 22, 2009 at 8:05 p.m.

    This is a great article and I'd just like to comment on one thing. A well run agency, that has a well rounded staff that can have productive meetings by a great management team to pull on all team members strengths and not waste time should put in perspective this thought. Why wouldn't a 25 year old be honored to be inspired and mentored by a 50 year old veteran? At the same token? Why wouldn't a 50 year old be interested in learning from a 25 year old what might seem 'over their head' to do what's in the best interest of the clients and ultimately keep their job? It comes down to losing egos and proper management within companies to be thrilled to have access to the scope of what the knowledge base span is within their own company. If anything, Agencies should be soaring right now by using strengths of all ages. If pride, egos and insecurity come into play? Someone inside the management team is doing something very wrong. Anyone with this issue? Call me...I'll contract out to lead a team...good grief!

  13. The digital Hobo from TheDigitalHobo.com , June 22, 2009 at 8:07 p.m.

    Maybe its because "boomers" or any other older generation, is less influenced by advertising?

    Instead of this being an age discrimination debate, or how much money the boomers are in control of, what about looking at it from the "science of advertising" side? How much money does it take to make a boomer switch from Coke to Pepsi? Or change a brand perception?

    Don't agencies focus on youth because thats when they are most easily influenced, hoping they'll build a life long brand perception?

    People over 50 spend 3.5x the time shopping online? OK. Have you watched someone 55+ browse the web? Its painfully slow. Its just not a fair measure of brand exposure or a reason to spend more money targeting them.

    Lets look at the whole picture before we bash every "kid" on madison avenue.

  14. Brent Bouchez from Five0 , June 23, 2009 at 11:34 a.m.

    To: The Digital Hobo

    Thanks so much for you response. A couple of thoughts...

    I'm not for a second suggesting that marketers shouldn't target 18 to 34, they must.

    But given the numbers in the marketplace, it no longer makes sense to not also target the 50+ consumer with messages for them. When I was a "kid" in advertising (I started at age 19 and arrived at Chiat/Day at 22) advertising agencies did it all. Today, there are African American agencies, Hispanic agencies, youth agencies, pharmaceutical agencies, media agencies, digital agencies, event agencies and more. Why?

    Because they're needed.

    This from Forrester Research, June 2008-

    "Today's ad agencies aren't well structured to
    take on tomorrow's marketing challenges. They
    are geared to creating "broadcast" messaging
    in a world that is moving to "narrowcast".

    In the future, the new "connected" agency will
    not only know certain communities, but be
    active members of that group."

    That said, since you asked about the science of advertising...

    Boomers are very different from previous "older generations". They are actually more influenced by advertising and easier to reach with advertising than their younger counterparts. This is the generation that turned the Superbowl into the Commercial Bowl and gave rise to the USA Today Superbowl Commercial Ratings. A newspaper, by the way, who's readership averages around 55 years of age. And, of course, the average age of television viewers today is 50.

    As to the cost of getting boomers to change brands...

    Born in the decades of experimentation, Boomers are born brand experimenters too. They love trying new products and ideas. Boomers were the ones who went from buying American cars, to buying Japanese cars, German cars, Swedish cars and now Korean cars. BMW, Toyota, Honda, Lexus, Hyundai would not exist today if it weren't for boomers. 50+ consumers by more Hybrid cars than any other group...talk about being influenced by
    advertising and marketing.

    In fact, a recent Roper ASW study found that 20 to 30 year-old consumers are actually more averse to trying new
    brands than those in their 50's. So I would suggest that the cost of getting boomers to switch would be less, by quite a lot.

    Unfortunately, the concept of "lifetime brand value" was hatched in another lifetime...a time of exponentially fewer consumer options. Coke or Pepsi. Chevy or Ford. Crest or Colgate. Jockey or Fruit of the Loom.

    Today, brand perception must be built and re-built constantly. The consumer has choices on choices on choices...to use your example, by my simplistic count there are at least 20 variations of a product called Coke on the shelves of the average supermarket. Regular, diet, lime, lemon, caffeine-free...etc.

    Today, like it or not, marketing is a street fight with few to no rules.

    CMO's have an average tenure of 24 months, brands live or die by their stock price, there is a new title in the Fortune 500 world...Chief Revenue Officer, can you guess what that person cares about? It's not lifetime brand value, I can guarantee that.

    These days, a brand's time in the spotlight is not bought and paid for, it's earned ever day. GM, Ford, Chrysler and the Republican Party all believed in lifetime brand value. Ask them how it's working out so far.

    As to your suggestion that people 50+ are web tortoises, I give you a short list of people who might disagree:
    Steve Jobs, Bill Gates, Andy Grove, Steve Ballmer, Eric Schmidt, Steve Wozniak, Meg Whitman, Larry Ellison, Steve Case...should I go on?

    The bottom line is that your response was dead-on...30 years ago. Since then, the world has changed a bit. Today, targeting only the young is akin to suggesting an all television media plan, you can certainly do it, but you might want to have a back-up career plan.
    - Show quoted text -

  15. Alan Reisberg from Capital Media , June 25, 2009 at 1:02 p.m.

    Much of the article is based on the following assumption:

    The sweet spot is people aged 18 to 34. Ninety percent of today's marketing dollars are spent trying to reach this group. Marketers lust after them, and media companies do everything in their power to lure them to their websites, magazines, and TV channels.

    Are 90% of marketing dollars actually targeted to this demo? I think not. I hope not, especially for clients who market products/services with mass appeal. Obviously, it depends on the product/category but we have been recommending A25-54 to many of our "mass" audience clients and have evolved many to A35-64 as we have followed the pig in the python.

    This raises the issue with my next marketing pet peeve, though. Let's say your target is A18-34. Isn't there a world of difference between an 18 year old and a 34 year old (and for that matter, a 35 year old and a 54 year old). Best targeting practices really do identify a sweet spot, and it's not a 20 year age gap, and that sweet spot is more then age demos, it encompasses, agem income, ed, lifestyle, points-of-view, etc.

    alan@capmediagroup.com

  16. Mark Young , June 28, 2009 at 10:41 p.m.

    Great article, being boomers we are tired of the same old methods of advertising bombarded at us on daily basis.

    Quite frankly it does not work anymore. We have become very savvy consumers and companies should use permission based marketing.

    First time reading your articles. Keep up the good work.

  17. Chuck Nyren from Advertising to Baby Boomers , July 2, 2009 at 11:56 p.m.

    Another piece on MediaPost that's worth reading:

    http://tinyurl.com/knx76m

  18. Jerry Shereshewsky from GrownUpMarketing , July 23, 2009 at 2:28 p.m.

    Well done Brent. To The Digital Hobo: here's a Roper/ASW report from 2003: “…the 50+ market’s loyalty for brands in various categories is often on par with the 18–49 market, which means that they’re just as fickle when it comes to brand loyalty as the young demographic, but with substantially more income.”

    I couldn't have said it better myself.