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Boomers Mean Big Business

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When it comes to advertising, marketers have an over infatuation with the youth of America, however, in doing so they and their media company partners are under utilizing a segment of the population, Baby Boomers, that has significant buying power and whose buying power is only going to grow over the course of the next decade.

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Boomers Mean Big Business

  1. 1. The Mercury Index January 2011 Michael Goodman, Senior Director, Research & Analytics mgoodman@mercurymedia.com, 508-449-3319 Boomers Mean Big Business When it comes to advertising, marketers have an over infatuation with the youth of America. What they are watching, what they are wearing, how they are communicating, etc. As a result, media companies focus on reaching this coveted 18-34 and 18-49 demographic. However, in doing so marketers and their media company partners are underutilizing a segment of the population, Baby Boomers, that has significant buying power and whose buying power is only going to grow over the course of the next decade. Based upon an analysis USA TODAY did of data from the U.S. Bureau of Labor Statistics, the 116 million U.S. consumers age 50+ spent $2.9 trillion last year, up 45% percent in the last 10 years. In comparison, the 182 million U.S. consumers under 50 spent $3.3 trillion last year, up 6% in the same period of time. Not only do Boomers have money to spend today but they are about to get a lot richer. Over the course of the next 20 years U.S. consumers age 50+ will inherit and estimated $14 to $20 trillion. Marketers tend to think of Boomers as older folks who spend less, have little interest in new products and have brand preferences set in stone. Nielsen estimates that less than 5% of advertising dollars are currently targeted towards adults 35-64 years old (which includes the latter half of Generation X in addition to Boomers). Despite this limited spend Boomers account for 38.5% of CPG dollars and dominate 1,023 out of 1,083 consumer packaged goods categories. © Copyright 2011. Mercury Media. All rights reserved. Today’s Boomers are not like their predecessors. They are affluent, adopt technology with enthusiasm, and have shown a willingness to try new brands and products. They comprise one-third of all TV viewers, online users, social media users and Twitter users. Like any demographic group, however, you need to understand their media consumption patterns to effectively reach them. Television dominates Boomers media consumption. According to Nielsen’s 1Q 2010 A2/M2 Three-Screen Report, adults 50-64 watch an average of 44 hours and 20 minutes of TV a week. This accounts for approximately 85% of their media consumption via TV, Internet, and mobile phone. Exhibit 1 Reaching Boomers through Television Source: Nielsen Company - 1Q 2010 A2/M2 Three-Screen Report Average Weekly Time Watching TV (HH:MM) Person 2+ 35:34 Adults 65+ 48:45 Adults 50-64 44:20 Adults 35-49 36:35 Adults 25-34 32:03 Adults 18-24 26:45 Teens 12-17 24:28 Kids 2-11 25:48 Much of today’s marketing to Boomers is based upon what’s wrong with them, such as
  2. 2. age spots, wrinkles or erectile dysfunction. While it’s true that Boomers will have more health issues than younger age groups it is doing them a huge disservice to solely categorize them this way. Boomer’s have much more diverse interests than just getting rid of age spots. For example, according to the 2009 Consumer Expenditure Survey from the Bureau of Labor Statistics, consumers 45+ spent $190.0 billion on entertainment, $184.9 billion on new and used cars, and $104.7 billion on apparel and services. In comparison, those under age 45 spent $135.0 billion on entertainment, $136.1 billion on new and used cars, and $103.8 billion on apparel and services. But even with this discrepancy in expenditure when was the last time you saw a car manufacturer advertise to the 50+ segment? As the US population continues to age over the next several decades now is the time for smart marketers to begin improving their understanding of this growing segment of the population and focus more of their advertising budget here. © Copyright 2011. Mercury Media. All rights reserved.

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