Boomers Like...

This is the second of a two parter today.

This morning I featured info on Gen Y.

Now let's look at their parents.

When It Comes To The Economy, It's The Boomers, Stupid

Pardon my borrowing a phrase from a Clinton who spends a lot less time in Washington these days, but it seems apropos to the news of late.

While economists and pundits debate back and forth, hither and yon as to a solution for the still anemic economy, and marketers search desperately for ways to increase sales, the answer is staring them all right in the face ... or, in many cases, the mirror.

A little group of 80 million consumers ages 45+.

Herewith, a few reasons why.

Let's start with unemployment.

The percentage of Americans who are unemployed has hovered at around 9.6% for some time now. But what's important to look at is who is unemployed.

According to recent New York Times and Bureau of Labor Statistics numbers, by far the largest group of unemployed is the 15-to-24 cohort at a whopping 16.7% (in July this number soared to a record 48% due to the lack of summer jobs for the younger in this group), followed by the 25 to 44 group at 8.2% and finally, the 45+ contingent at only (easy to say if you're employed, I know) 6.3%.

Now, I've been in the advertising business over 30 years and not once have I ever had a client ask me to target the unemployed consumer. I think this is probably for good reason ... the unemployed don't have any money!

So I'll ask, yet again, why are CMOs obsessively focused on the youth market?

Since you've heard me shout the above question so many times before, let's talk for a minute about déjà vu.

One of the perks of living past 50 is that you have something called experience. And experience tells you that things like good times and bad times and Great Recessions come and go and come and go. We lived through the recessions of '73 and '81 and '90 and, of course, the dot-com bubble burst of 2000. And between those times we saw the economy bounce back and we saw huge boom times.

Boomers know that this recession, too, will pass.

Gen Xers, however, aren't quite so sure. And the Millennials have never seen anything like this before. Maybe that's why a whopping 1 in 8 have boomeranged back home to live with their parents. Or why 25 states have shown a decline in birthrates (remember, the oldest Millennials are nearing 30) since the recession began.

And, by the way, all those younger people who have moved back in with their parents -- parents who pay the rent, the cable, the gas and electric and water, buy the food, pay for health insurance, buy and insure the cars -- in most cases, those parents are boomers, 45+.

Speaking of cars (one of my favorite subjects), I have also said many times that people over 50 buy 56% of new cars. In fact, the average age of new car buyers is on the rise, from 43 in 2007 to 48 in 2009.

Now you might counter that this isn't surprising given the economy; young people can't afford to buy new cars, they buy used cars.

Good try.

According to CNW Research, the used car market for teens has fallen from 7.5 million used vehicles bought in 2004 to 4.2 million in 2009. Teens have gone from 17.4% of the used car market to just 10.9% in just five years.

Why? Of course the recession has a lot to do with those numbers. But expecting them to recover anytime soon may be the stuff of pipe dreams. A recent study by J.D Power & Associates indicates that, thanks to technologies like Facebook, Twitter and smartphones, today's young people are feeling less of a need to physically congregate, which results in less need for transportation.

This from the editor of the website Car Connection in July 2010: "It's the peak of summer-job season. And while in the past savings from teens' summer jobs used to often go towards buying a first used car, today it's more likely to go be used for a smartphone, and young drivers are more likely to share the family car ... or stay out of the driver's seat altogether."

So why would a company like Volvo spend millions of dollars to be the car of choice for a teen heart-throb vampire in "Eclipse"?

I can't for the life of me tell you the answer to that question, but I can tell you the results.

"Eclipse" hit theatres in June of this year; in July, Volvo sales were down 33% over the same month a year earlier (which wasn't a banner year either).

Ford is now in the process of selling Volvo to the Chinese.

And my favorite result of the Volvo youth marketing effort comes from a 19 year old's MySpace page: "Why would a rich vampire drive a Volvo?"

I've said it before, I'll say it again:

Eighty million consumers earning $2.5 trillion annually with 2.5 times the discretionary spending power of any other group, holding 75% of the nation's current wealth and standing to inherit between $14 and $20 trillion over the next 20 years seems to me like a group worth targeting by marketers.

I mean, I'm not an economist ... but I'm not stupid, either.

With partners Nancy McNally and David Page, Brent Bouchez founded Agency Five0, dedicated to messaging and content for the 50+ consumer. Bouchez has worked at Chiat/Day Los Angeles, Ketchum Los Angeles and Ammirati & Puris New York. He was founder and president of M&C Saatchi New York, Chief Creative Officer at Bozell New York and Founder of Bouchez Kent + Company. His clients have included BMW, Nike, Bank of America, Nikon, and many other major brand names. Reach him here.

And now here's even more:

Boomers And The New (Normal) Economy

Last week we learned that the Great Recession (part one) was from December 2007 through June 2009. Lasting a full 18 months, it has been the longest downturn since the Great Depression.

Most agree that the jury is still out on whether there will be a part two.

Also last week in this very space, Brent Bouchez made a passionate and valid case for marketers and advertisers to focus their attention on the 50+ segment because that is where the money (still) is. Brent is right, but this recession has affected how Boomers think, feel and act when it comes to spending money. And it is a change you need to know about and understand as you craft your 50+ business plan (you are crafting one, aren't you? If not, go back and read Brent's piece again).

Boomers, like most consumers, have moved to a new place when it comes to spending money.

Thanks to our partnership with BIGresearch and its Consumer Intentions and Actions study, each month over the last three years we have been monitoring the attitudes of Boomers on a variety of spending and money issues. The first week of each month, BIG fields a huge survey among a representative panel of consumers, ages 18 to 80, asking all sorts of questions about where they shop, what they buy and what they plan to do next.

One such question is about behavior: "Over the last six months, have you made any of the following changes?" The simple "yes" or "no" vote gets tallied and, month-after-month, we can determine trends. Three changes are about spending money:

• I have become more practical and realistic in my purchases ... yes or no

• I have become more budget conscious ... yes or no

• I focus more on what I NEED rather than what I WANT ... yes or no (emphasis mine)

The higher the score, the more fiscally responsible or conservative consumers are. The lower the score, the more free-spending and loose consumers are.

Here's the chart since September 2007, months before the Great Recession's official start, through this September (the BIG survey is fielded the first week each month and the data released by the 20th, so we can track fresh trends).

You'll see the sharp increase in all three scores as we moved into the recession. The peak for all three occurred in early 2009; it seems once the new Administration took office, Boomers eased their attitudes about money and spending. Until this summer, when the scores began moving back up.

The New Normal

The trend line is important, but the broader point is that, on each measure, Boomers are not close to returning to the same level of attitude about spending money. The "floor" is some 10 percentage points higher than it was in September 2007, pre-recession.

Looking toward this holiday season, Boomers remain cautious about spending. In September every year, BIG asks "Based on your present situation and feelings toward the economy, which of the following best describes your plans for the December holiday season?"

Over 40% of Boomers said, "I plan on spending less for gifts than last year." Last year that figure was 44%. In 2008 it was 43%, and in 2007, pre-recession, it was 35%. Four out of ten spending less doesn't bode well for retailers, again.

The evidence continues to mount that there is a new mentality among consumers, especially Boomers, when it comes to spending money on goods and services.

If your job is to figure out how to best motivate them to spend it with your company, your job has a new normal, too. It's much harder.

Boomer Project founder/president Matt Thornhill is an authority on marketing to today's Boomer Consumer. He has appeared on NBC, CBS and CNBC, in "BusinessWeek," "Time," "Newsweek" and "The New York Times" and countless others. Matt is also the co-author of the business book "Boomer Consumer." Boomer Project is a marketing research and consulting firm and has done work for Johnson & Johnson, Lincoln Financial, Samsung, Hershey's Foods and Home Instead Senior Care. Reach him here.

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