The Increasing Insanity Of Marketers' Indifference Toward Older Consumers

Mainstream marketers’ obsession with millennials makes less sense with each passing year.

According to the Bureau of Labor Statistics, there are 7.7 million more households headed by persons age 50+ (HH50+) than are headed by younger people (HH<50), 68.9 million vs. 61.1 million.

This imbalance has pushed the average age of U.S. heads of households from 48.8 ten years ago to 50.9 years now, and it has resulted in HH50+ spending more than HH<50 on consumer goods and services annually.

In the latest U.S. Consumer Expenditure Survey, HH50+ were responsible for 52% of all 2017 consumer expenditures. This is NOT an anomaly. HH50+ have been responsible for more than half of all consumer spending four years running.

The survey provides a wealth of evidence why 50+ has become a critical consumer segment.  The data speaks for itself. Check out these ten impossible-to-ignore stats. 

1. Consumer spending. In the last decade, the share of total consumer spending among HH50+ has risen from 44% to 52%.

2. Spending momentum. HH50+ spend at nearly the same rate as HH<50, $59,236 per household versus $60,984, respectively. (So much for the myth that spending diminishes considerably after age 50.)

3. Spending gap. HH50+ spent $350 billion more than HH<50 in 2017. That gap is is four times what it was just two years ago, $92 billion.

 4. National ramifications. HH50+ have a significant impact on the U.S. economy. From 2016 to 2017, 69% of the growth in total consumer spending was due to purchases made by HH50+.

5. Household income. HH50+ generate $67 billion more income annually than HH<50.

6. Accumulated wealth. In the past year, the net worth of HH50+ grew nearly three times faster than it did for HH<50 (up $20k vs $7.4k). As a result of the net worth growth among HH50+, 75% of the annual growth in U.S. household net worth is attributable to HH50+.

7. Category relevance. HH50+ dominate spending in several key categories, including life and other personal insurance (67% share of market), healthcare (65%), and new cars/trucks (54%). HH50+ also dominate spending in more surprising categories, including entertainment (53%) and personal care (51%) 

8. Home ownership. HH50+ are more likely than HH<50 to own homes (77% vs. 47%) and less likely to carry a mortgage (45% vs. 79%), which frees up money to spend on a wide variety of home-related categories. 

9. Home spending. HH50+ are responsible for more than half of all spending on pets (61%), household supplies (60%), vehicle repairs (60%), small appliances (58%), auto insurance (58%), major appliances (56%), audio/visual equipment/services (55%), household furnishings/equipment (54%), and food eaten at home (53%).

10. Population growth. Based on government population projections, HH50+ will grow at roughly twice the rate as HH<50 over the next five years, all but ensuring the continued spending dominance of HH50+.

Tell me again why millennials are the Holy Grail for marketers?

7 comments about "The Increasing Insanity Of Marketers' Indifference Toward Older Consumers".
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  1. Ed Papazian from Media Dynamics Inc, July 16, 2019 at 9:45 a.m.

    Mark, I think that most national advertisers simply take older adults for granted as opposed to not wanting their business. It's a well known fact that most TV buys "overdeliver" older viewers TV advertisers think that they are reaching these people---so why worry about it? The real question is what are these advertisers saying and presenting in their commercials? Here we see a concerted effort by most marketers to identify their brands with younger--"smarter?"----- consumers---even when these do not constitute the majority of their customers. Queried about this, the usual answer is the goal of projecting a "positive image" for the brand and, sadly, we live in a society that is obsessed with youth and regards older people, in general, as out of touch, over the hill, etc. As a result, peppy, oldsters will appear in some commercials, along with many younger folks in younger settings, but you will rarely see oldsters as the "stars" in ads prepared by many marketers. It just aint happening.

  2. Ronald Kurtz from American Affluence Research Center, July 16, 2019 at 10:29 a.m.

    Wow. Nice to see Mark's recognition of where the money is and the data to back that up. Our surveys always showed that the sweet spot for people in the top 10% based on net worth is age 50 to 65.

    This issue is about much more than advertising. It has implications for product design, pricing, availabilty, quality, service, promotion channels, etc. This is especially true for luxury products and services. Perhaps it also has implications for the appropriate age and background of personnel in the marketing departments of brands and retailers. 

  3. Mark Bradbury from AARP Media Sales replied, July 16, 2019 at 2:07 p.m.

    I agree. Marketers still want older consumers’ money, but they are unwilling to speak directly to them to get it. Imagine asking your spouse, “After this long, do you still need me to pay attention to you and your needs? Do I still need to talk to you for you to stay? Wouldn’t it just be ok for me to sit here and obsess over the hot young ones as they pass by?”  Relationships can’t go on auto-pilot. It just doesn’t work. Ask the many well-established CPG brands that have lost significant share of market because they ignored their older consumer base. As for mainstream ads starring older folks, you can deliver those ads via media that is used primarily by older consumers, or marketers can leverage the many ways to custom target older consumers online. 

  4. Mark Bradbury from AARP Media Sales replied, July 16, 2019 at 2:08 p.m.

    You’re spot on, Ron. It goes far beyond ad creative. 

  5. Paula Lynn from Who Else Unlimited, July 16, 2019 at 3:23 p.m.

    It is about fear, fear they are not smart enough or their seniors will spend too much and not leave them enough for them to spend, dig them out of the hole they got themselves into. That' just for starters. They continue to screw up. Just wait. It will catch up to them.

  6. James Smith from J. R. Smith Group, July 16, 2019 at 8:47 p.m.

    For the past 15 years, I've wondered about the same issues. I have this image of even the brightest marketers mumbling "18-49, 18-49, 18-49" in their dreams. Wake up and smell the demographic trends!

  7. Kathy Broniecki from Envoy, Inc., July 22, 2019 at 2:57 p.m.

    As an "older consumer" I have enjoyed this article and the comments. Insightful and gives me a different perspective. As a brand marketer, I believe that sometimes we take for granted that the older consumers buy what they recognize and that which they have had multiple great experiences - somewhat brand loyal. Advertising resources are precious and sometimes they are focused on messaging the audience with the greatest growth potential. 

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