Forever Young

When it comes to marketing to seniors, brands need to think young.

“The biggest mistake a marketer can make is to call someone a ‘senior,’” says Kurt Medina, president of Wallingford, PA-based Medina Associates, a direct response marketing consultancy specializing in the 50-plus market. “The word itself is one of the problems. People over 50 abhor the term ‘seniors’ and most people in marketing departments automatically think of dottering old people.”

Marketers who obsess over that 18-34 year-old demographic often ignore the “50-plus” market, and they’re missing out. The 2000 U.S. Census found 13.3 million Americans between the ages of 55 and 59, 10.7 million 60 to 64, 18.1 million 65 to 74, 11.7 million 75 to 84 and 3.3 million 85 or older.

The typical definition of “senior” is also getting younger. The median age for first-time grandparents is 47 years and Washington, DC-based American Association of Retired Persons (AARP) now begins targeting prospective members at age 49.

And then there’s the money. Consumers age 50 and over now control more than 77% of the disposable income in the U.S. (that’s $1.6 trillion dollars). Compare that number to those media darlings in Gen. Y, who spends just $172 billion per year, according to HarrisInteractive YouthPulse, and seniors start looking a lot more attractive.

Specialists in marketing to seniors are eagerly awaiting the graying of the Baby Boomer generation, the most active and free-spending generation in American history. According to the U.S. Census Bureau, the number of Americans ages 50 to 69 will jump 87% over the next 15 years. By 2005, the number of Baby Boomers will grow 44% to 59.3 million.

With such a wide range of age groups and incomes, marketers need to realize they can’t approach seniors en masse. “Marketers tend to lump seniors into the ‘old-old’ category,” according to Dr. Christopher Hayes, co-director of the Center for Aging Research and Education, Southampton, NY. “That’s a big mistake.”

“The young seniors hate ‘old’ stereotypes,” Medina says. “Boomers can range anywhere from a woman in her 60s to her daughter in her 40s. The word ‘grandparent’ may imply senior but is anyone really going to label a 47 year-old senior?”

Most observers agree that mature adults can break down into three different groups. While the names may vary, the demographics are pretty much the same:

1. Leading Edge Boomers or Pre-Retirees: Younger seniors in their late 40s to late 50s still in the workplace.

2. In-Betweeners or Active Retirees: Range from their late 50s to early 70s, often in the beginning stages of retirements.

3. Seniors: Most Americans start to define “old” around the mid-70s (although most 70 year-olds would probably take exception to that).

For all the fuss being made over Baby Boomers, the immediate opportunity may lie with Active Retirees. Leading Edge Boomers are usually still working and still paying off mortgages and their children’s college tuition. “Their consumption habits really haven’t changed that much,” Medina says. Active Retirees, on the other hand, are a goldmine of discretionary income. “One of the biggest myths is that discretionary income peaks when consumers are in their 50s,” Medina says. “While household income peaks in the 50s, per capita discretionary income doesn’t peak until the late 60s and it doesn’t decline much from there.”

Appealing to seniors

However, the staple industries of senior marketing remain insurance, pharmaceutical and travel. “Twenty years ago, people said we would see a marketing boom toward older consumers,” says John Migliaccio, president of Maturity Mark Services Co., White Plains, NY. “There is a little more today but really not as much as you would expect.”

Minneapolis-based Colle & McVoy has seen growing interest in seniors from some non-traditional categories but most clients remain in “wait-and-see” mode. Over the past year the agency has consulted with food companies, restaurants and even a beer brand (unfortunately for that category, alcohol consumption typically drops for most seniors). “Marketers have talked about seniors for a long time, and today it’s where the money’s at,” says Janet McGrath, business planning director at Colle & McVoy. “When the economy sours, seniors are often among the only ones still with money.” Two years ago, Colle & McVoy formed senior marketing unit Code 50 after buying Minneapolis-based senior specialist Sandcastle Group. The agency has since disbanded Code 50 as a separate unit and made marketing to seniors a part of everyday operations.

AARP: The Magazine (the former Modern Maturity) has launched a new marketing campaign, targeting not seniors but younger media buyers who control advertising dollars, to convince them this is a viable market. The tagline of the campaign, which includes a sweepstakes and a guerrilla marketing team featuring 40+ models standing in front of agencies handing out AARP-branded flip-flops and key chains, “Rethink 50.” “Many people have pre-conceived notions of what it is to be a senior,” says AARP marketing director Carol Davis. “We want to change that.”

Seniors are a very lucrative market but brands need to understand what they want. “Most marketers just don’t get it,” agrees Dr. Hayes, who identifies three driving forces for seniors: 1) they want to maintain their independence; 2) they want to be seen as doing constructive things; and 3) they want to be perceived at leading an active lifestyle.

Most seniors already have the material goods they want, so they’re not as product-focused as younger demographics. Seniors want “new learning and new experiences,” according to Medina. “For most of their lives, they had people telling them what to do every day through their jobs. Now, they get to decide for themselves.”

Marketers can find opportunities in seniors taking up new hobbies, such as fishing, gardening and new work. Seniors have also been partly responsible for the recent boom in the small-office home-office market.

And while they might not be buying much for themselves, seniors are powerful purchasing agents for other product categories. Seniors are responsible for 28% of toy purchases for grandchildren, and 26% of clothes for kids under five, per Medina.

The Walt Disney Co. might be considered the definitive children’s brand, but the company has devoted an increasing chunk of marketing dollars specifically toward grandparents, particularly for its amusement parks. “Disney isn’t just pitching itself as a great place to take the grandkids, but as a good destination for the grandparents themselves. They’re saying, ‘Leave the kids at home!’”

One of hottest marketing categories is targeting people who move. This has traditionally been thought of as a younger crowd, moving around before they set down roots. However, seniors are starting to dominate the second home market. Pulte Homes, Inc., Bloomfield Hills, MI, builds “active adult” communities under its Del Webb brand. In 1996, the company started a survey called The Baby Boomer Report to track issues and attitudes for the Baby Boomer generation. The most recent survey found that 59% of those surveyed said they would move to a new residence in retirement and 31% said they would likely move more than three hours away from their current location.

Mind your manners

Most importantly, Baby Boomers and seniors don’t like to be reminded that they’re getting older. In 2001, the AARP tried supplementing its flagship member magazine, Modern Maturity, with My Generation, a publication specifically designed for Baby Boomers. The AARP also introduced Modern Maturity Working Edition, targeting the 55- to 60-year-olds still in the workplace. However, in March 2003, the two spin-off magazines were shelved and Modern Maturity was re-branded as AARP: The Magazine.

Marketing to seniors by implication, rather than spelling it out, might be the best way to go. “If you position something as an old fart widget, no one will touch it,” Medina says.

Nestlé’s Stouffers brand ran an effectively subtle promotion targeting seniors for its frozen food line. Consumers who sent in a certain number of boxtops could redeem free CDs. While the word “senior” was never used, the implication was there with the prizes, which consisted of Frank Sinatra and Ella Fitzgerald recordings.

Most observers cite the financial services market, such as the Prudential Lifestyle program, as doing the most consistent job in marketing to seniors and recognizing they need different services for different stages of life. Other brands are hit or miss. “Viagra is an example of some of the best and worse work done by the same brand,” Migliaccio says. “One ad was very subtle, just showing an attractive couple and the copy, ‘Let the dance begin.’ Another ad featured a younger couple and such dense copy it was unreadable.”

Marketers need to approach seniors as real people and not “plastic seniors.” “Advertisers always show this happy couple smiling and seniors need to see something more realistic,” Medina says.

Above all, brands need to have respect for the senior audience. “We’ve done focus groups that reveal a growing resentment directed toward marketers and agencies for portraying adults as stereotypes in their lifestyles and faculties,” Dr. Hayes says.

And marketers need to take a more realistic look at their priorities.