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The Mistakes Madison Avenue Makes About Older Consumers
Businesses are missing out on the longevity economy despite clear data to the contrary, exploring anti-ageism activism, and adoption rates of cannabis among older people.
It really boggles the mind.
How can all those smart people in the advertising industry and in the C-suite at major brands miss what’s happening? And what about small to mid-sized companies?
It’s not just that older people are living longer, healthier lives while birth rates plummet, giving rise to a long-term shift to an older society. It’s also that consumers over the age of 50 control vast amounts of wealth and account for the majority of household spending.
How can they not know? Well, we’ll explore the answer to that question in this issue of Longevity Gains.
But first, let’s talk about this week’s episode of the podcast.
We’ve explored the idea of the intersection between marketing, entrepreneurship, and activism in a previous episode of the show. It seems like a good time to take it a step further.
That’s why I reached out to Ashton Applewhite, a fiery and funny anti-ageism activist who I know from her book, frequent articles, and informative LinkedIn feed.
Ashton is the author of This Chair Rocks: A Manifesto Against Ageism and a leading spokesperson for the emerging movement to raise awareness of ageism and to dismantle it.
She’s also the co-founder of the Old School Anti-Ageism Clearinghouse, and has been recognized by The New York Times, The New Yorker, National Public Radio, and the American Society on Aging as an expert on ageism.
Ashton also speaks widely at venues that have included the TED talks mainstage and the United Nations, has written for Harper's, The Guardian, and The New York Times, and is the voice of "Yo, Is This Ageist?"
Marketers and activists will never agree 100%. It’s the nature of things. But when it comes to the longevity economy, we’re more aligned with our activist friends than you might think.
Don’t Fall for These Myths About Older Adults
Despite their dwindling numbers and even smaller level of disposable income, Madison Avenue’s fascination with and focus on the young continues.
We’ve explored the general ageism, stereotypes, and misconceptions that drive this at a cultural level, now let’s drill down into the specifics of why advertisers and their agencies continue with an outmoded way of thinking about older consumers.
We’ll start with some numbers.
Despite claiming to be data driven, marketers overestimate the spending power of young consumers. Research performed by Age of Majority reveals that Gen Z accounts for less than 3% of all consumer spending, but the business world believes they make up 24% of spending, which explains why they allocate 22% of their marketing resources to this young cohort.
On the other hand, Baby Boomers spend 15 times as much as Gen Z, while businesses believe they only account for 15% of spending and therefore only allocate 16% of marketing resources to them.
It’s hard to traffic in reality when decision makers don’t even understand relative spending levels. Marketers surveyed therefore tend to over-invest in the under 35 group by an average of 20% and to under-invest in the Gen X and 55+ groups by 13% and 8% respectively, when you contrast distribution of marketing investment against actual consumer spending data.
Given the obsession with youth, businesses and advertising agencies tend to focus on younger people when hiring, and this is the likely root of many misconceptions. Marketers under the age of 35 years old are significantly more likely than older marketers to underestimate, ignore, under-invest in, and unfairly stereotype consumers 55+.
When you understand that, these incorrect attitudes aren’t surprising:
38.8% believe marketers can relate more easily to younger consumers
28.3% believe younger consumers are a better long-term opportunity
27.3% believe younger consumers will be put off by targeting older ones
26.7% believe younger people are cooler, sexier, more fun, etc.
There’s also the misconception that older consumers are more brand loyal, so they are unlikely to switch to a new choice. But as we’ve explored, older consumers will punish brands that ignore them or inadequately represent them, so loyalty goes out the window. Meanwhile, Gen Z has thus far demonstrated very little brand loyalty and therefore the argument that businesses can more easily land them as “customers for life” is unsubstantiated.
Then we get back to the tried and true ageism. Surveys show business think older people are:
Less digitally savvy or engaged than younger groups
Unwilling to try new things
Difficult to teach them new things
Physically inactive or frail
Despite all of this, businesses say they want to better speak to older consumers, but can’t seem to get started. Perhaps the first step is to hire and retain seasoned marketing professionals who have more capacity to understand older consumers than someone under the age of 35.
The longevity economy won’t reach its true potential until these easily debunked misconceptions are eliminated. But for older entrepreneurs, the time is right to move given that incumbent businesses that drag their feet on older consumers are easy targets for disruption.
Trying New Things: Marijuana as Medicine
Don’t tell the cannabis industry that older people won’t try new things:
Seniors are one of the fastest-growing populations of cannabis users in the United States. While some older adults have used pot for decades, studies suggest that others are turning to the drug for the first time to help them sleep better, dampen pain or treat anxiety — especially when prescription drugs, which often come with unwanted side effects, don’t work as intended.
If you’re thinking, “Of course, Baby Boomers were a bunch of dope-smoking hippies,” don’t be silly. That’s like thinking all Gen Xers were flannel-wearing slackers. Even if older adults tried marijuana as teenagers or young adults, most abstained until legalization opened the door to wider use.
Rather than simply getting high, older consumers are using cannabis to treat a host of real conditions, ranging from insomnia to chronic pain. And since doctors still won’t recommend THC over pharmaceutical options, older consumers are guiding each other with tips and encouragement.
The point is, older people are definitely open to new things. And if you can provide the initial catalyst for them, word-of-mouth can propel your business quickly.
Why Some Seniors Are Choosing Pot Over Pills (New York Times)
That’s it for now my friends. For those in the U.S., Happy Thanksgiving!