Have We Overrated The Millennial Consumer?

Last year, it was reported that advertisers spend a whopping 500% more targeting millennials than all other age groups combined.  But what if the advertising industry targeted the wrong demographic?

Forrester Research Inc. reports that baby boomers (aged 51 – 70) are the only demographic to increase their proportion of discretionary spend from 25% of the market to 35% in the last generation. Gen X (aged 35 – 44) also punch above their weight as they constitute only 18% of the U.S. population but represent 23% of all online shoppers. These statistics tell us the industry may be betting on the wrong demographic in the short term, and that the advertising industry needs to take a nuanced approach to marketing to separate demographics.

For example, millennials are more likely to be influenced by word-of-mouth than by other methods, indicating that the better value in marketing spend may be in influencer marketing. Baby boomers on the other hand, make CPG purchasing decisions primarily based on advertising, depending more on word of mouth for financial products and large purchases like travel and electronics.

This being the case, it would seem most appropriate to target CPG ads to baby boomers, forgoing the hip, millennial slang that inundates many ads these days. Using popular hashtags and trendy catchphrases can be effective if used organically within the influencer marketing sphere, but are more likely a turnoff for the baby boomers.
For online retailers, in particular, the best bang for the buck is to move up the demographic ladder. Business Insider reports that, although millennials reportedly spend the most on average per year, they actually constitute the smallest slice of the pie of online shoppers.

The average online spend for those aged 35 – 44 is only $70 less than that of millennials and there are more of them than millennials. Online shoppers ages 45 – 54 are an even larger group. And one in four mobile shoppers in the United States is over the age of 55.

There are specific verticals that work particularly well for boomers like travel, especially luxury travel. In fact, four out of every five dollars spent on luxury travel comes from those over 50 years old. And in line with the e-commerce adoption trends among mature consumers, 80% of travel consumers aged 50 and over plan and book their trips online. Many of these boomers are also engaging with online video when making their travel-related purchasing decisions, reinforcing the notion that digital marketing practices resonate well with this demographic.

Rather than being left behind by the onslaught of technology, middle age and even senior consumers are adapting quite well to e-commerce, and marketers need not be so hasty to overlook them. Baby boomers and Gen X have more money than millennials and there are more of them in the general marketplace than millennials. While it’s worth the long term investment to try converting millennials to your brand, their parents are waiting at check-out ready to make the purchase, or are otherwise open to being converted.

By Albert Luk, Columnist
About the author: Albert Luk, VP of operations and general counsel, Jumbleberry
Courtesy of mediapost