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 Therefore, the classical marketing model is obsolete.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.

17 million American seniors still not on the Internet — an interesting marketing problem or an urgent health crisis?

One of my favorite websites is Aging in Place Technology Watch.  Laurie Orlov not only does a great job assembling important new data, but she is also a very tough-minded observer with a keen eye for what’s real, what’s pie-in-the-sky, and what’s outright BS. She has a new item about seniors on the Internet, and she finds an angle that is very disquieting.

She cites a new Pew survey indicating that Internet adoption is now at almost 85% of adults. But it’s only 61% those aged 65 and up. (In Canada, the number is very close – about 65% adoption.)

We can expect these non-adoption figures to drop steadily, as more Baby Boomers, who are emphatically online, enter the 65-plus cohort and exert their influence on its numbers. But for the moment, the numbers are worrisome because, as Orlov correctly points out, the Internet has moved from “nice to have” to “need to have.”

Access to the Internet in 2015 is an essential – like food, work and transportation. Find a job, search for a health problem like yours, learn a skill, locate a ride, buy a house, vacation, or used car. Book a trip, a restaurant, or find a repair shop. This is not your Internet of 2000.  Today’s Internet has disintermediated nearly all other ways find answers to any of those questions…  

Yet for many seniors, access to the Internet is unaffordable.

…and nobody is dealing with it.  If you are reading this, you know. Access to the Internet is essential. Stores, banks and government agencies are closing.  So what’s happening to get the rest of those seniors online?  Are you seeing broadband plan discounts for people aged 65+, let alone the 17 million real seniors aged 75+? If life expectancy at 65 averages 88.8 for women and includes those with significant chronic disease, how do they find resources needed to survive without a) access to the Internet or b) committed family who will act as their online proxy? What is the government policy proposal that addresses this audience? And what are the carriers, Google, Facebook, Apple, or any other large tech Peter Pan innovators doing about it?

I haven’t really seen much about this topic — the Internet as an essential for health and well-being, and one that is unavailable to a growing number of people.
Usually when we read about the Internet and seniors, it’s about marketing — either the slowness of the older age group to “catch up” or the underestimation, on the part of marketers, as to just how many have, in fact, “caught up” and how big a potential customer pool is being ignored by slow-on-the-uptake marketers. But Laurie Orlov provides a much-needed reminder that as so much moves online, lack of access becomes an urgent social issue. This urgency will only grow as health care continues to shift from being exclusively about treatment to also being about prevention, wellness, management of chronic conditions, and ongoing care. The central role of the Internet in delivering the necessary information — and access to resources — will make Orlov’s call for action ever more important.
I urge you to read the entire article.

Coming next: Radical rest homes. “Old people should live everywhere.”

It’s no longer hot news that the housing industry is re-thinking retirement homes. New designs, more services and features, a blend of tech and luxury…it’s all hitting the market. But here’s an alternative thought…

What if the whole idea of putting older people into an “institution” — even a lavish one — is flawed? What if the older people, instead of being consumers of what someone else has built, take matters into their own hands and organically  build their own  micro-communities where they can age alongside their friends? The idea may not be so-far fetched, according to this very interesting report on the CBC. 

I think the answer is: all of the above. The sheer size of the “aging” population means that no one solution will win the day. And clearly, the more responsibility older folks take for creating their living spaces, the more active and engaged they are…which in turn promotes even more longevity.

Number who live in multi-generational household has doubled since 1980: now 57 million Americans

 

There’s been a dramatic spike in the number of Americans living in multi-generation households. According to a new Pew Research Center analysis, based on stats from the US Census Bureau, a record 57 million Americans — or 18.1% of the total population — now live in a multi-generational family home. That’s double the number of 1980.

Young adults (25-34) are the group most affected. Roughly a quarter (23.6%) live in multi-generational households, compared to 11% in 1980, and overtaking the oldest adults as the group most likely to live in multi-generational households. Historically, the oldest adults (85-plus) were the leading group as many of them moved in with adult children for reasons of  caregiving or other assistance needed in the final years of their lives.

But now it’s the young adults who are driving the trend, and there’s little doubt that it’s just another part of how the Millennial generation is delayed in hitting the “traditional” benchmarks of adulthood. They’re marrying later, having kids later, earning decent money later. And, the flip side — living at home with mom and dad longer. The bottom line on multi-generational households should come as no surprised for those of you who have been following these trends in my books and here on this blog.

Read the whole report here.

 

 

Another silly apology to Millennials – NYTimes op-ed

“Dear Millennials,” proclaims Frank Bruni in a June 7 op-ed in the New York Times, “we’re sorry.” He then proceeds to another oh-so-familiar round of generational mea culpa, concluding, “We conveniently overlook how much more they’ve had to pay for college than we did, the loans they’ve racked up and the fact that nothing explains their employment difficulties better than a generally crummy economy, which certainly isn’t their fault.They get our derision when they deserve our compassion and a political selflessness we’ve been unable to muster. While we’re at it, we might even want to murmur an apology.”

I’m not suggesting that the problems he enumerates are illusory. And he’s certainly correct that the Millennials did nothing to bring on the “generally crummy economy.” But the idea that the older generations owe an apology is idiotic. Mr. Bruni seems utterly unaware of the fact that the older generations are largely paying the freight for the disadvantaged Millennials. He posits a view of the aging population — no longer contributing to the economy, takers of scarce government funds that would be better deployed elsewhere – that is at least a decade out of date.

Here are some key facts (see p. 173-174 of my book, Beyond Age Rage, for more detail and for sources) that Mr. Bruni omits. Does he know them and chooses not to offer them? Does he not know them in the first place?

– 6 out of 10 Baby Boomers are providing financial support to adult children, with an average amount of close to $4,000 a year

– At the same time, 10% of Boomers are also providing financial support to their aging parents while also trying to manage their own looming retirement

– Of those helping their adult children

– 50% are providing housing

– 48% are helping with living expenses

– 41% are helping with transportation costs

– 35% are subsidizing insurance coverage

– 29% are providing spending money

– 28% are paying medical bills

– One in five Baby Boomers report having paid a college loan, or co-signed such a loan.

What’s more, the “older generations” are not all net takers. As I have reported frequently in this blog, they are not retiring on schedule and they are still contributing a large share of income taxes raised by the federal government. Consider these facts:

–  According to the US Bureau of Labor Statistics, just under 7 million Americans over the age of 65 are still employed

– A 2013 survey by AP/NORC Center for Public Affairs puts the figure even higher, if you include working and being “retired” at the same time. According to that survey, 13% of the 65+ population are still working, a further 8% are working in retirement, and 3% are looking for work. That adds up to nearly 10 million people.

– And the trend will only get stronger. A 2012 survey by TransAmerica Retirement Services found that only 19% of workers now in their 50s and 60s do not plan to work after the traditional retirement age of 65.

– As a consequence, the “older” generation is still paying income taxes. In fact, they contribute a majority of all tax dollars collected – and the percentage has been growing since 1997.

– In 1997, the under-45 age groups combined contributed 38% of all income taxes paid, while the over-45 group contributed 62%. By 2011, the under-45 group was contributing just over 25%, while the over-45 group now contributed 74% of all income taxes.

But maybe you think I’m cheating by lumping 65+ in with the 45-65-year-olds. Okay, let’s look at the 65+ group alone. And since we’re narrowing it at the older end, let’s do the same at the younger end and compare them with the 18-35 age group — the group that Mr. Bruni is worrying so much about today.

– In 1997, the 18-35 age group contributed just under 15% of all income taxes, while the 65+ was right at 15%. Call it a tie. But in 2011, the contribution of the 18-35 age group was cut in half – down to 7.5%, while the 65+ share of taxes paid rose to 18%. In other words, the older group – all of whom Bruni assumes are being carried by the younger workers – contributed  more than twice as big a share of income taxes as the 18-35-year-olds.

No doubt these awkward factoids escaped the attention of the New York Times fact checkers. They certainly escaped Mr. Bruni.

Bottom line: the older generations have nothing to apologize for.

If you want to read the entire column, here you go:   Dear Millennials, We’re Sorry – NYTimes.com.

Oh, no — Boomers moving in with Mom and Dad? It’s actually happening…

Now it’s Boomers! Yes, according to a report in the LA Times, “older people are quietly moving in with their parents at twice the rate of their younger counterparts.” For the seven years 2005-2012, the number of Californians age 50 to 64 who live in their parents’ homes jumped 67.6% to 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development.

The main reason:  dollars and cents. True, some are moving back to their parents’ homes in order to take care of those parents (who would be in their 80’s or 90’s) but for the most part it’s due to the financial squeeze caused by the Great Recession. Either their nest egg has been wiped out, or they’re unemployed, or both. Long-term unemployment is a big problem: the number of Americans 55 and older who have been out of work for a year or more stands at 617,000 – five times what it was at the start of 2008 when the recession began.

The article lays out the emotional toll this is taking. Boomers, after all, are supposed to be the super-competent generation who take care of everyone else. Says public policy consultant Jenny Chung Mejia, “”It’s unexpected vulnerability at this point in your life. When you’re supposed to be the provider, sort of the rock for yourself and your family and maybe your parents, the table just gets turned on you and the rug gets pulled out from under you.”

When you look at it in percentage terms, it’s a dramatic story. But the absolute numbers give a different spin. The 194,000 California Boomers who have moved back in with their parents compares to 1.6 million Californians age 18-29 who have moved back home.

Even so, it’s a sobering reminder of the financial vulnerability faced by the Boomers, whose retirements are seriously underfunded. Thus, the pressure to keep on working, as opposed to retiring “on schedule” at 65.

You can check out the entire article here.

 

 

“It’s not that you’re slow. It’s that you know so much.”

The brain slows with age – right? At the more modest end of that spectrum, we have the benign (and sometimes even humorous) “senior moment.” At the other end, the tragedy of Alzheimer’s Disease.

There is strong evidence for age-related physical impairment triggering mental decline. We’ve all read about plaque build-up in the brain, for example.

But now comes some fascinating evidence, reported in this excellent article in The New York Times, that other factors may be in play.

Over the years, some scientists have questioned this dotage curve. But these challenges have had an ornery-old-person slant: that the tests were biased toward the young, for example. Or that older people have learned not to care about clearly trivial things, like memory tests. Or that an older mind must organize information differently from one attached to some 22-year-old who records his every Ultimate Frisbee move on Instagram.

Now comes a new kind of challenge to the evidence of a cognitive decline, from a decidedly digital quarter: data mining, based on theories of information processing. In a paper published in Topics in Cognitive Science, a team of linguistic researchers from the University of Tübingen in Germany used advanced learning models to search enormous databases of words and phrases.

Since educated older people generally know more words than younger people, simply by virtue of having been around longer, the experiment simulates what an older brain has to do to retrieve a word. And when the researchers incorporated that difference into the models, the aging “deficits” largely disappeared.

This doesn’t mean, of course, that there are no physical effects of aging on the brain, or that these effects are not important:

…the new study is not likely to overturn 100 years of research, cognitive scientists say. Neuroscientists have some reason to believe that neural processing speed, like many reflexes, slows over the years; anatomical studies suggest that the brain also undergoes subtle structural changes that could affect memory.

Still, the new report will very likely add to a growing skepticism about how steep age-related decline really is. 

To sum up, from the last line of this article:

It’s not that you’re slow. It’s that you know so much.

Take the time to read the  entire piece. It’s important.