Thursday, December 3, 2015

Puzzle: why are marketers ignoring old people?

From a British blog,
A milestone in marketing stupidity has been reached. According to a September report by the U.S. Bureau of Labor, a majority of consumer spending (51%) is now done by people over 50. These people are the target for 10% of marketing activity. On the other hand, marketers spend five times as much money marketing to Millennials, the moronic obsession of every marketer on the planet.

 However, as an economist I dont buy the non-rational explanation offered:

There is no logic to the advertising industry's disregard for people over 50. It is marketing by selfie-stick - narcissism disguised as strategy.

Remember these are averages, and how much to spend on marketing is an extent decision, where the marginal effect of advertising is relevant.  It could be that the marginal benefit to advertising to young people is higher (they buy more in response to ads) or that the marginal cost of reaching them is lower, e.g., because they spend more time online.

For cigarettes, I know that new smokers switch more frequently between brands while established smokers are more loyal to a particular brand.  This may indicate more susceptibility to brand advertising, which rationally explain the high level of advertising aimed at young smokers.

I don't know what the answer is.  Would love those with more experience to weigh in.

HT:  High Lantern Group


  1. Sounds like an untapped opportunity to start a tech company catering to their needs instead of the needs of Millennials.

  2. Sounds like an untapped opportunity to start a tech company catering to their needs instead of the needs of Millennials.

  3. who says old folks are buying things for themselves though? i bet most of what my grandmom spends money on is gifts for us terrible millenials!

  4. who says old folks are buying things for themselves though? i bet most of what my grandmom spends money on is gifts for us terrible millenials!

  5. This is quite interesting. Thinking about the current most popular ads that I have seen on TV and in magazines do seem to gear towards the younger generation. It seems as though the majority of companies that are heavily advertising have a strong brand image and most likely have an equally strong brand loyalty. As such, it would make sense that they would be targeting new, typically younger, consumers to attempt to expand this loyalty. The older generation is, for the most part, pretty set in their ways in regards to brands. Therefore, ads are more focused on new, more persuasive consumers. I further agree with the previous post that explains that many of the consumers in the older generations do quite a bit of shopping for others. Therefore, by advertising to young adults and children, it inadvertently gets passed on the the senior shopper.

  6. From my experience, brands are investing in millennials because their buying power is expected to increase to 1.3 trillion by 2018. Since millennials are set to be the largest generation yet, brands are investing now to gain brand loyalists for the future. Also older people are less likely to switch brands.

  7. There are good reasons to heavily market millennials, all listed above. The demographics for my dental practice includes millennials and boomers. Boomers habits seem more value and relationship based, whereas millennials are more expedient, on to the next new thing, or existing in the moment. The volume of ads to millennials surely is supported statistically by the response, but the contrarian view supports greater exposure to an older audience, less numbed to over exposure to advertising. The reality is that older people are the Facebook generation, keeping in touch with old friends and family, so that established stereotypes of buying patterns may be ripe for being challenged.

  8. When looking at marketing, it is an industry where as mentioned I do not know if there is always an answer as to why they are marketing a certain product or group but it is somewhat fascinating to look and explore.

    As stated, 51% of consumer spending is done by people over 50. I think a main reason why marketing activity is only 10% for this demographic is due to the age bracket of over 50 is such a large range and is made up of people who may be in their 50’s and have disposable income to spend on pricier items or luxury items due to their standing in life and a loyalty to a brand. However, also within that range of over 50 is an older, retired demographic who are on fixed incomes with less disposable income along with being set in their ways and without much desire to spend or try new brands/products.

    The difference according to the study presented shows such a slight difference in under 50 and over 50 demographics spending that I think it can be viewed as almost equal in regards to consumer spending. Under 50, especially millennials are often more likely to be reached by different methods of advertising and are also likely to be less loyal to brand. I do see where the study makes a generalization of age demographics however whereas a 25-year-old with an apartment is likely to be more reckless when buying items then say a 35-year-old with a home and family. Does this make the under 50 demographic, especially millennials more likely to be targeted by marketers? I would think that accessibility to a consumer is a major part of marketing and millennials can be reaching in more ways than the over 50 demographic. Much to this argument is the example given of cigarettes, new smokers are likely to change their brand than the established smokers. Marketers view the millennials as the new smokers who are there for the taking in hopes that they are selected as that “smokers” brand of choice.

  9. You make a lot of great points about the buying habits of millennial S vs those over 50. As I get closer to my 50's and think about my buying habits, I tend to consider myself more of a brand loyalist. I have a wife and three children, and it seems to me like we do. It have time to be trying new products. When I look at my younger nieces and nephews, it always amazes me how they can be distracted by the latest "bright shiny object" and race out to buy it.

    I firmly believe that marketers are playing in to the impulsive nature of the younger generations, especially when it comes to new products and technology. When I think of bigger ticket items such as family cars and suv's or even pharmaceutical marketing, those campaigns seem more targeted at older consumers and are certainly less flashy. There seems to be more of a focus on true features and benefits type messaging versus new technology which is more about noise and flash.

    It comes down to the target market. Other posts have pointed out the more fixed income nature of the over 50 consumer and their needs. Marketers have done a good job of creating the "need" in younger consumers which to me just is not as easy in a more mature consumer. As an marketer, if I see and easier sale in a younger person, then the ROI is there, even if they make up under half of the potential market.

  10. I think this is something that should never be ignored, I believe experience can beat anyone and that’s why it is so crucial in life. As a trader, I always want to gain experience because this is how I will get success. At the moment I am extremely fortunate to have perfect platform in OctaFX broker’s demo contest where I can practice regularly and this automatically brings a lot of experience to my table while even get me chance of winning prizes.

  11. Baby Boomers represent 25% of the population and they consume 40% in total dollars spent (Bulik, 2010). Thus I would have to say that the amount spent on advertisements geared to specific age group would have to depend on the product.

    I have to agree with the example; that was giving in the Blog about cigarettes. I started smoking at a young age and switched brands several times until I became loyal to a particular brand. However, I quit smoking for the last time when I turned thirty one. Those that are fifty and over and still smoking are not looking to switch brands therefore, it would be wise to advertise to younger age groups.

    Another example; would be electronics it is a misconception that Baby Boomers are not into electronic. Baby Boomers spend more on technology then their younger counter parts. This includes monthly telecom fees and overall online purchases (Bulik, 2010).

    Therefore, firms need to understand their product and to what age group to spend advertizing on. The firm can then perform a marginal analysis to determine whether to change the level of advertising to that particular generation. This is done by measuring the marginal cost and marginal benefits to increase the amount spent. For example, the firm is using $100,000 on internet advertising and yields 10,000 new customers. The firm would then take the 10,000 new customers and divide it by the cost of the change ($100,000) (10,000)=$10. The $10 is called the customer acquisition cost if the benefit of another customer is bigger than the acquisition cost then increase the advertising (Froeb, McCann, Shor, & Ward, 2016).


    Bulik, B. S. (2010, October 11). Boomers -- Yes, Boomers -- Spend the Most on Tech. Retrieved January 24, 2017, from

    Froeb, L. M., McCann, B. T., Shor, M., & Ward, M. R. (2016). Managerial economics: A problem solving approach. Boston, MA: Cengage Learning.

  12. I wonder if it is really “ignoring” the older demographic, or a matter of missing context since advertising to specific demographics depends on the product. I can’t blame the author for questioning the “non-rational” explanation, but I can think of other reasons marketers focus on Millennials.

    In the example provided, the author states that 51% of spending in the US is accomplished by people over the age of 50. Yet technology has and is revolutionizing how business is done. How many times have you found yourself thinking “cool, a new social media platform!” or “dear lord, now I have to learn another new media platform??” The potential for new mechanisms for advertising seem to change on a monthly basis. Marketers are always seeking new ways to push or pull their products to consumers, and there probably aren’t too many grandparents on Snapchat after all. The marginal benefit of advertising to Millennials is lower for a variety of reasons. I offer that their sheer numbers (all 75.4 million of them) might be an important reason.

    Pew Research announced that Millennials (ages 18-34) have surpassed Baby Boomers as the “nation’s largest living generation” (Fry, 2016), so that’s a lot of folks to put a product in front of. These digital natives are easy to reach: their online life is ubiquitous, spending an average of 25 hours a week online (Bedgood, 2016). In contrast, the Boomer generation (ages 51-69) prefer to have face to face interaction with retailers, and their lifespan is shorter in comparison.

    If a marketer can build product loyalty with a 20-year old Millennial now (assuming such a thing is possible), the value of that relationship could last for decades to come. The advertising industry says that it is more cost effective to retain a client than it is to find a new one, so advertising to millennials could pay for itself long into the next few decades. Consider the Net Present Value of such advertising. Targeting Millennials now while they are still growing into their preferences, versus targeting a Baby Boomer that may already be set in their ways that they should try your product = Priceless.

    On the other hand, it is notable that the purchasing power of Boomers is higher than most Millennials… which brings us back to the original inquiry in which it appears that marketers ignore “old people.” Businesses are more likely to pour money into advertising that will yield more revenue – so, is it more efficient to target Boomers with products at a higher cost (even though there are less of them) or to sell products to Millennials, at a lower cost (as there are more of them)?

    Froeb, et als (2016, p70), says this fundamental “trade-off is at the heart of pricing decisions,” and that’s where the marginal analysis comes in. If the Marginal Revenue (MR) is greater than the Marginal Cost (MC), then the answer is to reduce the price for all consumers, in order to sell more. While I agree with the author that the advertising industry as a whole seems to scorn older generations, the fact remains that sex in advertising still “sells” and the only time you see a Boomer in a sexy ad is if pharmaceuticals are involved (you know what I mean)...


    Bedgood, Larisa (2016, February 5). Retail for the Generations: How to Market to Baby Boomers, Gen X and the Millennials. Datamentors. Retrieved from

    Froeb, L. M., McCann, B. T., Shor, M., & Ward, M. R. (2016). Managerial economics: A problem solving approach. Boston, MA: Cengage Learning.

    Fry, Richard (2016, April 25). Millennials overtake Baby Boomers as America’s largest generation. Pew Research Center. Retrieved from