Take Me To Your CFO
Today, I'm going to bite the hand that feeds me. Actually, not so much the hand, more like the whole arm and part of the shoulder.
Why? Because I'm addressing this article not to the Chief Marketing Officers of the world, the people who would normally hire me, I'm addressing it to the Chief Financial Officers.
CFOs love numbers, especially the kind that are black and accrue to the bottom line. This article is loaded with them, but it's not about a new type of accounting or a way to shelter revenue from the IRS, it's about the numbers that CMOs are ignoring at the expense of their brands success, especially in this economy.
According to McKinsey Consulting, by 2010 (3.5 short months from now) 50% of all consumer spending in America will be by people over the age of 50. People 50+ earn $2.4 trillion annually compared to $1 trillion for the 18-34 group (and they spend at the same rate). Also according to McKinsey, people 50+ generate 41% of all disposable income, while they represent only 30% of the population. They buy 60% of all packaged goods, over half of all new cars and spend 75% more per vacation than consumers under 50. And in 2007, those over 50 spent 3 times the national average holiday shopping online.
And yet, less than 10% of all U.S. marketing dollars are spent against the 50+ consumer, and nationwide research shows that the majority of consumers over 50 feel that advertising and marketing either portrays them negatively or ignores them altogether.
If you're a CFO, right about now you're probably thinking something like ... if people over 50 spend over $2.5 trillion a year and the 18-34 group spends $1 trillion a year, my CMO better have a damn good reason why we're not also talking to people over 50.
To which I would answer ... they do, but you're not going to like it.
The reason? To most CMOs, older just isn't cool.
The marketing world is obsessed with the idea that youth equals success. Get the young audience and you've got them for life ... young buyers drive new products ... they decide what's what ... they make or break brands.
As I've said in this column before, this is a way of thinking that made perfect sense in 1975 ... when we boomers came up with it. Today, however, things have changed.
Cool is no longer a factor of age. Just ask Madonna, Bono, Alec Baldwin, Ellen, Frank Gehry, Oprah, Diane Keaton, Meryl Streep, the Cohen Brothers, Anna Wintour, Jake Burton, Steve Jobs or ... need I go on?
These days, cool is in the eye of the beholder, and the fastest-growing, richest, most advertising- and brand-conscious group of beholders are consumers 50 and older.
And, chances are, this will be the case for quite some time to come. In fact, the most recent numbers from the Bureau of Labor Statistics show that the highest incidence of unemployment in the country is in the under-29 segment, where July hit a whopping 11% (highest) unemployed rate vs. 5.4% (lowest) for the 50-64 group. And the last time I checked, the unemployed weren't high on any marketer's list of targets.
So, if you're a CFO, and you want to improve the look of your bottom line (and show me one who doesn't), I suggest you forward this article directly to your CMO. And while you're at it, you might remind them that they get paid like everyone else in the company ... by the amount of product or service sold. Not by how many You Tube clicks, Facebook friends or Tweets your brand amasses.
In this economy or any other ... sales are what's really, really cool.