US Brands Bungle a Booming Economy 3X the Size of Brexit

By Barry Robertson & Marc Matthews

Brexit - a teachable moment for US brands

"With both jubilation and regret" (The Guardian) the UK exited the European Union on January 31st, 2020, putting the British economy up for grabs – at $2.86 trillion, the 5th largest GDP in the world.

But EU marketers won't give up on Old Blighty, they’ll just hustle harder for its business.

Meanwhile, here in the USA too many brands lack the courage, craft or creativity to compete in a booming hidden economy three times that of the UK. The 120 million Americans aged 50-plus represent the 3rd biggest GDP on the planet ($8.3 trillion) and account for over half (52%) of all US consumer expenditures.

The most powerful example of their clout is that they buy more new vehicles than the top three post-Brexit EU markets combined – Germany, France, Italy – (7.9 versus 7.5 million in 2018).

So, why is this vast audience ignored by so many CMOs and ad agencies?

Look no further than weary old Madison Avenue myths.

Madison Avenue's three myopic memes

Fixated on the 18-49 demographic, advertising orthodoxy clings to three myopic memes about consumers over 50. Allegedly, they are:

• Easy to reach /easy to engage via conventional media/messaging.
• Set in their ways: resist change don't switch brands/behavior.
• Toxic to image because young prospects reject “old people” products, and management/Wall Street fear "old brands."

This doozy of a dumb dogma has been kicking around since the 1950s/60s. Except for vinyl records and hip mid-century style, it’s about the only thing over 50 that group-think Adland embraces. Baby Boomers should be so lucky.

Sure, it made some sense in the era when Mad Men ruled and “we’ve never had it so good” drove consumption. The 18-49 demo back then, the Boomers’ free-spending parents, made ideal targets while their grandmas and grandpas spent sparingly, fearful another Great Depression might appear at any moment.

But it’s silly to pretend today’s Boomers and Gen Xers – who adapted, decade after decade, to drive innovation and invention on every front – morph into their own grandparents at the stroke of midnight as they turn fifty.

Refuting Myth #1: Easy to engage via conventional media/messaging

Let stipulate that the over 50 audience indexes high for conventional media consumption.

Nielsen reports the median age of live television viewers is 56 and that adults 50+ watch more than twice as much TV daily as those 18-49 (6.5 hours versus about 3 hours respectively).

And, Gen X and Boomers are almost half the audience for digital platform viewing – connected devices (45%) and computer, tablet or smartphone (43%).

However, strategists should realize that brands need far greater viewing tonnage before Boomers/Gen Xers pay attention – not just recall, pay attention – because they’ve been pitched to all their lives. They know how to evaluate brands and – especially – advertising. They've seen it all.

And as for “easy” engagement, when not turning off older prospects with cliches and caricatures, age-agnostic messagers often forget there is no such thing as age-agnostic perception – see Boomers and the Age-Agnostic Advertising Trap.

Takeaway: consumers 50+ may be easy to expose to advertising – but they far from easy to engage.

And with good reason. Our own Boomer / neXt research finds 94% say they have become wiser as they have grown older.

Refuting Myth #2: Set in their ways, reluctant to switch brands

One word: Tesla.

The most valuable US auto brand delivered its first units just 12 years ago, in 2008: at the end of January 2020, its market capitalization is $100 billion – twice that of General Motors and almost three times that of Ford.

Credit venturesome older Gen X, Boomer and Silent Generation visionaries. Having waited all their lives for viable EVs, they were eager, not just willing, to adopt a new brand that tapped into their aspirations and treated them as desirable consumers not has-beens.

The Hodges & Company reports the median age of Tesla Model S buyers as 54 and 52 for Model X. Model 3, the de rigueur darling of Silicon Valley, checks in at 46.

So, at least 100,000 of Tesla’s 2019 US sales of 223,200 went to the 50+ space; each and every one conquested from another premium auto brand that took older buyers for granted.

And no, Tesla is not a special case.

Far from it: 86% of Boomer and Gen X consumers told Boomer / neXt they enjoy learning about and trying new brands and products (Brand Courtship Study).

It's hardly surprising.

After all, they created the taste for health foods, got athleisure wear off and running, launched global travel, dumped Detroit for imports and brought digital technology across the chasm.

We know what you're thinking: OK Boomer, what about “slow” adoption of smartphones?

Duh! The people who took Apple and Mac products to the peak of cool in the 80s/90s were older and wiser when the iPhone debuted. A gazillion formats had came and gone by then – all ballyhooed as the latest and greatest. So they held back, knowing Apple and its competitors would soon improve smartphones: they were right.

Over 90% of Boomers and Xers own cellphones today; 3/4 are smart (Pew) and holdouts enjoy cameras, Internet, email, even Bluetooth on flip phone budgets.

Refuting Myth #3: Toxic to brand image

Fewer than 10% of ad agency employees are over 50; the average creative staffers is 28.

Don’t misunderstand, we’re not singling out marketing Millennials here – advertisers have been embarrassed by “old people” for a long time. It's a tradition.

In 1988 the 30 year old Boomers who then populated creative departments were only too happy to diss their dads and ruin an iconic brand with the incredibly clumsy “This is not your father’s Oldsmobile” campaign.

The goal was to arrest a sales slide triggered by previous missteps, but registrations fell from 715,000 in 1988 to 403,000 five years later.

It seems their old fogey loyalists didn’t react well to being insulted, and young buyers out beyond Adland’s self-centered matrix cringed at the condescension. Product, not posturing ruled.

Like Myths #1 and #2, the idea that targeting the over 50 and worse (ugh!) putting them in ads scares off young prospect is, well, just a myth. In reality, the toxicity problem lays with our industry culture: the challenge of advertising to “old people” is more scary to young marketers than to young buyers.

• Agency employees drop out, or are shoved out at an alarming rate between age 39 (the ad/PR industry median per the Bureau of Labor statistics) and 50, when fewer than 10% have survived. That's a horrendous 80% attrition rate, one which puts enormous pressure on 40-something execs to conform to conventional wisdom.
• Sadly, just as their real-life experience aligns with that of the world’s 3rd largest economy, almost all of marketing’s most valuable people have been exiled.

Add poll results that found, by a 4-to-1 margin (51% vs.13%), Millennials say Boomers made things worse for their generation, not better, and empathy for the 50-plus audience plummets.

No wonder so many devastating strategies result from this clumsy congruence of negative forces.

A 3X Brexit economy demands smarter, more sensitive attitudes

Clearly, beneath the surface, adaptation runs deep in the world’s 3rd largest economy. Marketers who fail to access its inner mind dynamics are doomed to follow, not lead.

However, challenging industry memes half a century in the making is not an easy task: brands cannot just Google or Big Data their way into Boomer/Gen X world. No matter how sophisticated the metrics, they must persuasively engage its inhabitants.

To do that, they must learn the hidden, socio-cultural imprinting that created the silent symbolic language still driving brand destinies.

Acquiring those skills requires age appropriate experts, strategists, brand managers and creatives – the very people Madison Avenue has been showing the door for decades. Fortunately, their resumes have been languishing in corporate and agency files, attracting dust – and in some cases anti-ageist litigation – for years. It's time to reach out.

But however they choose to go about it, brands seeking to capitalize on a GDP triple the size of the Brexit economy must re-think, re-imagine and re-hire. The dividends are enormous.