Chuck said:
I think you are a little younger than I am, but not by a lot. I recently turned 60. My observation is my friends are buying Harley Davidson's, taking expensive trips, buying motor homes, and HDTV sets. Second homes are not that uncommon. Some of us spend way more than we should on collector cars. Take look at the Barret Jackson car acutions in Scottsdale to see the biggest pising match ever assembled. There is lots of money in gray hair.
That is irrelevant. Nobody doubts that many over-55+s have lots of money, and, as a group, a large percentage have spendable income beyond the basics of life.
What I have explained over and over is that agency accounts, like P&G and Coke and Honda and so on do tons of research on ad effectiveness as well as even more on the prime prospects for their goods and services. They do even more research to design products, right down to the labels and packaging, to appeal to specific age groups.
What they universally find is that advertising to over 55 may create sales, but the cost per sale is higher than the profit on the sale, becasue the more mature a person is, the more difficult it is to change as much as two decades of consumer habit-building.
This is not about consumer spendable income. It is about return on investment. And for most products, and for nearly all those advertised on the radio, going after 55+ is not profitable.
Remember why Oldsmobile was discontinued as a marque of GM? It was because the brand only had appeal to 55+ consumers, and no hope of growth because generally, the 55+ conusmer bought one and then died. A bit extreme, but that was the published reason... no sales growth, and no interest in the brand by younger folks.
It's not just big ticket items. We pamper our pets. We eat out a lot. We buy al kinds of consumer goods. We buy boats, personal watercraft and lots of other toys. I buy a new car every few years and (horror of horrors) actually switch brands from time to time. I don't know of very many people in my age group who are locked into any particular brand name. In fact, as children of the '60's we tend to pride ourselves in "sticking it to the man." The problem is, frequently, we are "the man."
The truth is that advertisers have quantified the issue, and do not advertise towards 55+ on the radio. I asked our local GM in radio's #1 market how many 55+ campaigns had been up in the last 12+ in this huge, billion dollar plus market (stations know what campaigns are up because stations are asked to submit cost per point quotes against the target demo) and I was told that not a one could be recalled.
If we are not buying stuff for ourselves, we are spending our money on things for our grand kids, nieces and nephews.
It does not matter if you are paying off the national debt of both Benin and Burkina Fasso... advertisers know they can not make money when the advertise to you. So they prefer to ride on the spillage for more focused campaigns, since the spillage is free (what I mean is that a great 35-54 buy may also give lots of 55+.... but the agency only pays for the target demo... the rest is free, so to speak) and they get a little bang in 55+ from news/talk, sports, oldies, classic hits, AC, country, Spanish adult hits, Urban AC, etc. But they do not go out to buy 55+ as it is not productive.
There is money out there in the 55+ age group. So far, very few companies have woken up to that reality.
They know it is out there. They also know that by age 65, over 60% of households live on social security alone, close to the poverty level.
In any case, they also know there is no ROI on any over-55 radio advertising.
This is not your grandfather's retirement. The rules have changed. The longer this group is ignored, the more money you are leaving on the table.
Try to tell P&G the couple of hundred million they spent on consumer research is wrong, just because you buy your grandkids toys. The fact is, you are judging all America by your obviously affluent and luxurious lifestyle. Most people over 55 can´t even consider early retirement because they can not afford it.
