Do we need a new marketing model? 1 – Why what we have is nonsense

The “generation gap” and the “reinvention of aging” aren’t news any more. We all understand that the “older” generations aren’t acting the way people of the same age acted in the past, and that the “younger” generations — particularly, the Millennials (in their 20s and young 30s) are experiencing extreme delays in hitting the same demographic and lifestyle benchmarks that previous generations hit at that same age.

This has profound implications for marketing. I’ve written a couple of books on this, with some material dealing with the marketing implications, and it’s the focus of what I write about on this blog. But so far, I haven’t seen anyone in the marketing community take the subject and really run with it. I think it yields an entirely new marketing model.

So far, though, most of the discussion and debate has been about why marketers overspend against the younger segments and underspend against the wealthier older cohorts. There are hundreds of articles complaining that Madison Avenue doesn’t “get it,” that they are still over-reliant on the 18-34, or 24-54, age groups and discount the older Boomers and seniors. There are numerous ad agencies and consultancies whose mission is to the prove that the Millennials are a highly valuable market, and that they (th

e ad agency or consultancy) have unique knowledge about that age group and a unique ability to help marketers reach them.

All well and good.

But I think there’s a lot of room to take the topic much further — and that’s what I propose to do in the next series of posts.

My premise is simple:

Everything is shifting older. Therefore, the classical marketing model is obsolete.

The classical model tied lifestyle to age:

  • Brand influence began in the teens (although the spending power was still with the parents)
  • The young to mid-20’s saw the  formation of new families and the all-important determination of initial brand choices
  • Spending rose steadily through the 30’s and 40’s and maybe early 50’s
  • Retirement followed, meaning that spending dropped and, since brand choices were hardened into place anyway, there was little or no reason to spend marketing dollars against that cohort.

Marketing strategies are still largely based on this model. And there’s no question that life stage component of it is still logical: you  go from a being a child with no purchasing power to a first-time and early-stage shopper in the marketplace, to a full-on consumer, to a cut-back stage and, eventually, the end.

What’s different, of course, is the absolute and total uncoupling of age from life-stage — at least, the ages that were previously assigned to the various stages. This uncoupling is so radical that it makes the entire model nonsense.

  • Family formation has increasingly been shifting into the 30’s, instead of the 20’s
  • First home purchase is increasingly in the 30s
  • Retirement is no longer automatic at 65
  • The fastest-growing age group, in percentage terms, is the centenarian segment

For marketers, the urgent issue ought to be: how do we align our strategies and messaging to these new realities? What do we say to 20-somethings, while waiting for them to have money? What do we say to 60- or even 70-somethings, realizing that they might well be still in the workforce and might have 20 or 30 years of spending power ahead of them? In fact, what does a 30-year spending trajectory look like, for a 60-something, and how do we, as marketers, play into it?

I don’t think marketers are spending nearly enough time figuring this out. To too large an extent, they’re still aligning dollars and age brackets based on the old model that no longer exists. In the next two posts, I’ll suggest some new ways of coming at it.

Stay tuned.

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‘Vampire therapy’ could reverse aging, scientists find

 

There’s a long tradition of craving blood  for its restorative powers. It’s everywhere in our history and mythology: high priests sacrificing children, victors in battle drinking the blood of brave enemies and, of course, vampires. But what if there’s some actual science behind it?

Apparently scientists have discovered that young blood could reverse the aging process and maybe even cure Alzheimer’s Disease.

 

You can read all about it in this article from The Telegraph.

The article reports on two separate studies, both done with mice:

  • One study found that young blood can “recharge” the brain, forming new blood vessels and bolstering memory and learning
  • The second study identified a “youth protein” that keeps the brain and muscles young and strong. This protein, known as GDF11, is present in the bloodstream in large amounts when we’re young, but diminishes with age

Researchers hope to begin human trials within two to three years. “This should give us all hope for a healthier future,” says one of  the researches, Prof. Doug Melton, of Harvard University’s Department of Stem Cell and Regenerative Biology. “We all wonder why we were stronger and mentally more agile when young, and these two unusually exciting papers actually point to a possible  answer. There seems to be little question that GDF11 has an amazing capacity to restore aging muscle and brain function.”

Needless to say, I’ll be watching this and updating you regularly.

Harvard researcher on aging: There’s no ‘limit on the human lifespan.’

“Can we one day live to 150?” asks Harvard Medical School researcher David Sinclair.  “I don’t see why not; it’s just a matter of when.”  Is he serious? Well, he’s the man who did the research on resveratrol as a possible anti-aging molecule, and he’s doing new research. He’s prematurely aged mice, and is testing new molecules to try to bring them back to a younger state.

Will it work? Will it mean that humans can actually hit 150? “I don’t see why not,” he says. “It’s just a matter of when.”

Watch this video about Sinclair and his research here. 

Meet the “encore” entrepreneurs (you may be in for a surprise)

I’ve written before about the growing trend of Baby Boomers to start their own businesses. It’s an ideal way to handle the economic “triple threat” of today – real or potential job loss, under-funding for retirement, and lousy rate of return on those funds that have been set aside. Now comes evidence that women are outnumbering men as “encore entrepreneurs.”

This interesting report from BBC News cites data from a Kauffman Foundation study to show that the Boomer entrepreneurship trend is growing: in 2012, people aged 55-64 started 23.4% of all new businesses in the US, up from 14.3% in 1996.

But according to data from another source – Babson College – 10% of US women between 55 and 64 had taken steps to start their own business, compared to 7.5% for men.

The BBC story includes several interviews with women who have taken this step. The main reasons are what you’d expect – job loss, income reduction due to the recession, inadequate retirement funds. What’s different this time – compared to people of that same age in previous generations – is the perception that there is still time to turn things around, the willingness to start again, and the presence of a strong entrepreneurial mindset.

That – and a growing amount of support information and services. Books, seminars, consultancies – the trend to Boomer entrepreneurship has fueled an entire mini-industry of people (with real or self-proclaimed expertise) ready to help.

This is just the beginning. And it’s another nail in the coffin of “retirement at 65.”

Watch me on The Zoomer, with Conrad Black and Denise Donlon, tonight at 9 on Vision TV

I’m pleased to be back on the panel again, and the topic is: the workplace. We had a lively discussion, and you’ll recognize many of the issues, from following this blog. Watch The Zoomer tonight (Monday, January 20) on Vision TV, at 9.00 p.m.

If you want more information on the program, visit the web site here. You can also watch my two previous appearances on the show, on October 15 when we discussed “age rage” and the apparent “war of the generations,” and on November 18 when we talked about the state of Zoomers – pensions, aging, and a whole lot more.

I hope you’ll be watching tonight — and let me know your reaction!

Forget Pajama Boy and Rolling Stone; here’s what a huge number of Millennials are actually interested in

In contrast to the unseriousness that Pajama Boy and Jessse Myerson have recently attached to Millennials, there’s encouraging evidence that the Millennials themselves have no trouble getting  real, thank you very much.

A recent Canadian survey shows that Millennials are responding to the hardships of the job market by becoming – or planning to become – entrepreneurs.

The survey, conducted by Angus Reid for Intuit in September 2013, revealed that Millennials are twice as likely to start a business in the next 12 months as Canadians as a whole.

Some highlights:

  • 8% of Canadians say they want to start up a business in the  coming year, but Millennials, the number is 16%
  • Millennials like the opportunity to be their own boss. They’re almost five times more likely to be motivated by that factor (78%) as by the money itself (16%)
  • They’re not pie in the sky about money, though. They rated “poor understanding of finance” as the top reason for entrepreneurial failure.

The findings are consistent with US data. A survey by the Ewing & Marion Kauffman Foundation, back in 2011, found that more than half of Millennials wanted to start a business.

The Millennials have their critics; I myself have certainly ready to poke fun at some of their style points (especially when I think they get in the way of serious problem-solving). But they are responding, as a generation, to their circumstances and the cards they’ve been dealt, and we all may wind up being very happy with the eventual results.

Could this one factor explain why there are more older workers in the labor force?

Here’s another interesting angle on the “older workers” trend. We know it’s driven in part by need (Boomers are seriously underfunded) and in part by attitude (Boomers have a strong, some critics say insane, work ethic). But there’s another factor, and it may be the decisive one: education.

A new brief from the Center for Retirement Research at Boston College argues that educational attainment explains the big rise in labor force participation at older ages.

Consider these dramatic facts:

– In 1985, only 15% of men in the USA between the ages of 60 and 74 had a university degree. Today, the number is 32%.

– In 1985, more than 40% of men in the USA between the ages of 60 and 74, had not completed high school. Today, the number is only 13%.

It makes perfect sense that a more educated population will stay in the workforce longer. The jump is dramatic now, because there is such a contrast between the education levels achieved by the Boomers and those of their parents or grandparents. The increase in the rate of participation will gradually flatten out, of course, as the equally-well-educated (or even better-educated) Gen X’ers and Millennials reach their 60s and 70s. But in absolute numbers, the participation rate will be very high, compared to the latter part of the 20th century. And the mid- to late 20th century, don’t forget, is when all of today’s social policy assumptions were developed.

Here’s a link to a summary of this research.

And here’s a link to a pdf of the full report:

center for retirement research 2

It’s a huge issue, because it means the phenomenon of older workers will not just be a temporary response to the combination of increased longevity and retirement underfunding. It will continue, even in better economic circumstances. If 30% or 40% of people have university degrees, it’s ridiculous to think they’re going to suddenly stop working at 65, no matter what their financial circumstances are. Yes, they may change what they’re doing, or how much time they spend doing it. But they’re not going to let their brains atrophy or their education go to waste.

Retirement, as we know it (and as our policymakers have assumed it to be), will become obsolete.