Under the Influence with Terry O'Reilly - Ageism In Advertising

Episode Date: October 15, 2022

This episode is about how the advertising industry covets the 18 to 49 year-old consumer. Almost all advertising is aimed at that demographic, because the conventional wisdom is they have the most disposable income and are most willing to try new brands. But the big surprise is people 55+ are the ones with the most disposable income and spend the most in almost all categories - yet the advertising industry doesn't chase them. We examine why that is. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. Due to popular demand, we've dug very, very deep into our archives and are pleased to announce the re-release of episodes from the last season of The Age of Persuasion. And we've remastered them to fit our Under the Influence format. Here is an episode from 2011. This is an apostrophe podcast production. You're so king in it. You're lovin' it and it's out.

Your teeth look whiter than no nose. You're not you when you're hungry. You're a good hand with all teeth. You're under the influence with Terry O'Reilly. Well, he took me to this darling little place called Minnie's. Very hip, very chic, very small portions. So how'd it go? Well, you know, we talked about all the things we had in common and then the salad came.

The TV show Gilmore Girls premiered on October 5th in the year 2000. It was based on the story of a single mother and daughter who live in Connecticut. The tagline for the series was, Life short, talk fast. And it was known for its fast-paced dialogue and pop culture references. The pilot episode of Gilmore Girls received financial support from the Family Friendly Program Forum, which included some of the nation's leading advertisers, making it one of the first network shows to reach the air with that kind of funding.

Meanwhile, on another channel... In the criminal justice system, sexually based offenses are considered especially heinous. In New York City, the dedicated detectives who investigate these vicious felonies are members of an elite squad known as the Special Victims Unit. These are their stories. Law & Order Special Victims Unit premiered in 1999,

and it followed the cases of detectives from a fictional version of the 16th Precinct in New York City. It was the first spinoff of Dick Wolf's highly awarded Law & Order series. In 2001, Gilmore Girls ranked 121st out of 158 shows in the ratings. Law & Order SVU was number 14. Yet, Gilmore Girls charged 75% of what Law & Order charged for its ads. In other words, they were charging almost as much. The reason? Gilmore Girls' audience was younger,

even though it ranked 107 places lower than Law & Order in the ratings. But youth is the holy grail of advertising. We live in a culture of the young, for the young, and by the young. And anyone over 49 is relegated to the shoulders of the consumer highway. There is nothing so desirable as a young target market. If I were to announce in a boardroom that I had come up with a great idea to attract 55-year-old customers, I might get laughed out of the room. But if I were to say I've come up with an interesting idea to attract 34-year-olds, everyone would lean in. That may not seem so strange to you, except for one tiny detail.

People 55 plus spend more money in more categories than any other group. Yep, the 55 plus age group has all the money. Yet, it is the most neglected audience of all. The flat-out pursuit of youth defies statistics, facts, audience size, discretionary spending power, and even logic. Let's see why a touch of grey is kryptonite in the marketing world. You're under the influence. The advertising industry has long had a sweet spot when it comes to its most desirable target market of all, namely the 18 to 49-year-old consumer.

That is the age range advertisers pay dearly to reach. It's a curiously broad 31-year spectrum, and for some reason it stops dead at people aged 49. The history of that target group is a surprising one. Arthur C. Nielsen founded the A.C. Nielsen Company in 1923 in order to sell surveys. The company expanded its business nine years later by creating a retail index that tracked the flow of food and drug purchases, which was the first retail measurement of its kind. It was also the first time a business could determine its share of the market. Not long after, Nielsen purchased the autometer,

which measured radio station audiences and created a national radio rating service in 1942. Those early ratings were very primitive, determined by which stations were listened to by a sampling of 1,000 homes. The data relied on very broad distinctions, such as the total number of regular households tuning in and maybe, occasionally, the split of genders listening. The resulting information was sold to manufacturers and advertisers.

But when television arrived in the late 1940s, it revolutionized entertainment and advertising. And now, ladies and gentlemen, here he is, Mr. Television himself, your Tuesday night Cinderella, Milton Berle. Nielsen began rating television programs in 1950. The information was collected via a device that was attached to a television

that recorded what was being watched in conjunction with handwritten diaries sent and filled out by a sampling of families. The growth of television was extraordinary. Households with TVs went from less than 19% in 1946 to 55% in 1954 to over 90% by 1962. The effect on advertising agencies was equally remarkable. In 1949, for example, advertising agency BBDO had 12 people in its new TV department. Just one year later, they had 150. The agency moved 80% of its media buys

to television that same year. That was a sea change. BBDO grew from a $40 million company in 1945 to $235 million in 1960, all due to the explosion of growth in television advertising. Broadcast television's reliance on advertising revenues made it very different from other media, such as magazines, records, and movies.

Those mediums received a percentage of operating income from subscribers or from direct purchases. But for much of its history, television has thrived by providing a broad audience to advertisers that theoretically spanned North America. In order to distinguish itself from other media, including radio, TV networks attempted to attain the largest viewing audience possible. It gave TV a unique position, as only they could boast that an advertiser's commercial could potentially be seen by tens of millions of people across the country in prime time at the same time.

Maintaining that huge audience was critical to ensuring dominance over the other mediums. Long before advertisers requested detailed breakdowns of television audiences, CBS was the undisputed king of the ratings. For virtually 20 years, from 1955 to 1975, CBS ruled the primetime ratings. It had a treasure trove of highly rated programs, like The Lucy Show, Gunsmoke, and the one show everyone gathered around the TV to watch every Sunday night. Good evening, ladies and gentlemen. Tonight, live from New York, the Ed Sullivan Show. CBS had a stranglehold on TV ratings, and NBC came second with a smaller but similar

audience with shows like Bonanza. Those two networks owned the older, established viewership. At the bottom of the heap was the ABC network. So ABC chairman Leonard Goldenson decided to change the rules. What he did

would impact ratings for all time. Since he couldn't compete with CBS and NBC when it came to attracting an older adult audience, Goldenson decided that ABC would create a different market that it could win. So, in the 1970s, ABC decided to go after the youth market.

Goldenson had his first taste of the youth market back in the 50s and 60s when this show aired on ABC. Hi, this is Dick Clark, and it's time now for American Bandstand. It was a big hit with the teen crowd and was one of the few ABC programs that was number one in its time slot. Goldenson had a hunch and formed a strategy. He told advertisers that it was the youth market

they should be chasing and that ABC was their best buy. Goldenson made a seductive case for younger viewers and crafted an argument that has become the defining framework for advertising

for more than 50 years. Essentially, Goldenson said that the younger the viewer, the more brand loyalty was up for grabs. That brand loyalty had to be won early, while the viewer was, quote, tender. And that younger consumers were more impressionable, more focused on quantity, and they bought with impatience. Then Goldenson took a run at CBS and NBC, saying that older viewers were set in their ways,

could not be convinced to change brands or buy more of what they already had. CBS, of course, argued against every point ABC made, but the damage had been done. Advertisers bought right into Goldenson's theory. Then ABC recalibrated to take full advantage of the sea it had just parted. For the 1969 season, ABC only had two shows in the top 20, Mark Aswell be MD and the

Johnny Cash Show. But within a few years, ABC became a programming force with shows like Happy Days, Laverne and Shirley, and The Six Million Dollar Man, all aimed at the youth market. ABC aggressively lobbied advertisers to adopt 18 to 49-year-old viewers as the new ratings yardstick instead of the over-50 crowd. The network also convinced Nielsen Ratings to keep a running score on a network's success or failure in attracting this newly prized segment of viewers. It became an easy sell to advertisers as youth symbolized excitement, edginess,

and sexiness. And what advertiser didn't want to be associated with those characteristics? Plus, younger viewers had the money and were the hungriest consumers. There was only one small problem with that logic. It wasn't true. Ever since ABC's pitch, the advertising industry has focused on the key 18 to 49 target market,

believing that young people were most likely to develop lifelong loyalties to certain brands. The conventional wisdom being that if you bought Cheerios or Chevrolets when you were 18, you would buy them when you were 25, 35, and even 55. Except, that isn't true, is it? If you're over 55, let me ask you this. Do you still use the same toothpaste you did when you were 18, eat the same cereal you did at 25, drive the same type of car you did at 40, wear the same cereal you did at 25. Drive the same type of car you did at 40.

Wear the same jeans. In fact, a Roper ASW study found that people over 50 were as likely as younger consumers to switch brands for things such as banks, airlines, computers, and even bath soap. Another report showed that when it came to other product categories, like athletic shoes, home electronics, and cell phones, older consumers were even more open to switching brands than younger ones. As a matter of fact, 78% of people between 56 and 90 are likely or very likely to try new products.

But what about the fact that people aged 18 to 34 have the most discretionary spending power? There's only one small problem with that. It ain't true. More than 80% of the wealth in North American financial institutions is in the hands of people over 50, giving them 2.5 times the discretionary spending of the coveted 18 to 34 age group. They spend an estimated $2 trillion per year on products and services. And they're about to get richer. People aged 50 and older are set to inherit an estimated 14 to 20 trillion dollars during the

next 20 years. That phenomenon is boomer-specific and will not happen again. Media buyers estimate that 55% of the $20 billion spent in television primetime advertising is directed at the 18 to 49 age group. Yet, only 10% of all advertising is aimed at people 50+. Most of those campaigns presume there's something wrong with them that needs fixing, such as age spots, wrinkles, or erectile dysfunction. The single largest product category on television in terms of dollars spent is automobile advertising. And every car ad you see is populated with young people.

Interesting choice, because young people don't buy the most cars. According to a USA Today study, consumers 50 and older recently spent $87 billion on cars, compared with $70 billion by those under 50. Even Jaguar, whose primary customer is over 50, doesn't choose 50-plus actors for their ads. While Jag used a famous Deep Purple song in a recent commercial, the actors in it are, I'd say, about 35 max. Yet the average age of a new car buyer is 56. They buy more new cars, spend more on the cars they do buy, and buy cars for their kids and grandkids. Honda's hybrid car commercials don't show anyone over 30. Yet, as Businessweek points out, consumers over 50 buy more hybrid cars than any other group.

More than half of the 90 million 50-plus consumers in North America say they want to buy green. So, why exclude people who are already in the market to buy? For some reason, advertisers think people over 50 are invisible. Coke's Heart Truth for Women campaign is a great cause. It reminds people that heart disease is a concern beginning at age 55. In the fashion world, good taste is anything that makes a statement. But sometimes the biggest statement is the one that helps make a difference.

Join Diet Coke in partnership with A Heart Truth in support of women's heart health. The spokesperson in that ad was Heidi Klum, age at the time, 36. As Businessweek asked, could they really not think of a beautiful woman in her 50s? Ever heard of Michelle Pfeiffer? By the way, according to consumer research company NPD, people 50 plus buy 60% of all carbonated beverages.

Yes, there are categories where younger consumers rule, like computers and high-tech gadgets, right? Wrong. Boomers spent more on tech than anyone. According to Forrester Research, they spent $850 on their latest home computer. $50 more than any other group. People assume Gen Y is the most eager to adopt new technology,

but they don't have the spending power of boomers. According to another report by Forrester, 78% of boomers are online and spend more time and money there than any other demographic. Boomers spent an average of about $650 online over a three-month period, compared with $581 by Gen X users aged 35 to 46, and $429 by Gen Y consumers aged 18 to 34. But how big is the 50-plus population? One in three adults is 50. Someone turns the big 5-0 every seven seconds.

Approximately 6,500 people each day celebrate their 65th birthday. If marketers only achieve success by understanding and meeting their customers' needs, and since over half the population is in the second half of their life, where is the advertising? In the 20th century, the industrialized world gained some 30 additional years of life, greater than had been attained during the preceding 5,000 years of human history. The fastest growing demographic is people aged 85+. As a matter of fact, if you reach 85 in relative health, chances are you just might live to be 100. The queen used to handwrite notes to her subjects who reached 100 years of age.

But she had to stop. There were just too many of them. Not only did the Hallmark card company turn 100 years old itself a few years ago, but it sold over 85,000 happy 100th birthday cards. Here's an amusing commercial from financial planning company Raymond James. It's the story of someone who plans ahead for things to come. As the commercial begins, we see an attractive lady in her early 30s on a bicycle, circa 1920. Fastidious librarian Emily Skinner had a place for everything, and everything had its place.

Each day was fueled by thorough preparation for events yet to come, whether that be next Tuesday's bridge club or the precisely organized retirement that lay ahead. Then we see her with her new husband, then a new baby. Then we see Emily blowing out the candles on her birthday cake. It says, Happy 100th. Well, somewhere along the way, something quite extraordinary happened.

Emily went right on living, longer than any person has ever lived. We see her getting married again. Despite her years, she continued to have the means to live on however she saw fit. Now we see her blowing out the candles on her 123rd birthday. Then we see her on yet another honeymoon. Then celebrating her 150th birthday, then, hilariously, throwing another bouquet at yet another wedding. And to this very day, Emily Skinner is still going strong,

even at the ripe old age of 187. Life well planned. Last shot, 187-year-old Emily is hang gliding. It's a delightful commercial. It's also a rare ad featuring a 50-plus actress, who in this case was actually 80. As a director of commercials, I see many actors cross the 55-year age mark and watch as their work slowly dries up. Great actors with enormous experience and incredible talent, but no one hires them anymore.

Ageism in advertising even happens inside the industry. So what is the problem with the advertising business? If the age-old axiom is to follow the money, why isn't advertising's famous ability to do that working? There are three reasons. First, the average age of a media buyer is 31, and the average age of an advertising agency account person is 28, and they view the world through a 30-year-old lens. In the UK, the largest number of advertising employees were under 30, with less than 20% over 40 and a meager 6% over 50. So if the people advising advertisers where to spend their money are young, it's not surprising that companies are being convinced they should be targeting the young.

It becomes a self-fulfilling prophecy. Advertising agency creative people are young too. Most of the people who hired my company were in their 20s or early 30s. When a demographic company recently asked a typical 30-year-old advertising copywriter to pick a 60-year-old out of a group, he picked someone who was 75.

Ouch. Before CEO Jeff Zucker left NBC, he explained why his network continues to create television shows for a predominantly young audience. He said advertisers are running a business, that NBC was too. So if chasing a young audience is the game advertisers want to play, then NBC was going to play that game too. The second reason is that marketing's lack of attention to 55 plus is cultural. Older people are portrayed in television shows and movies as loud,

overbearing, boring, and in many cases, a senile punchline. Ignoring older people is tolerated. If society feels that way at large, and if advertising follows the parade, why should marketers feel any different? Third, the advertising industry has followed the 18-49 strategy for decades now, with a recent shift to age 25-54. It is the pattern. It is the accepted strategy. Advertisers do what they've always done because it's easier than taking a new path. So, marketers continue shutting

the door at age 49 or even 54, despite the fact that the 55-plus market would probably grow revenues dramatically. In an article on ageism in advertising by New Yorker magazine, it surrendered to the point that there genuinely is a demographic of stick-in-the-mud types who have decided what they're after and are resistant to all arguments to the contrary. They're the ones who work in advertising. It's interesting that the word elderly entered our vocabulary in the year 1611, yet the word ageism didn't arrive until 1969. It's ironic that boomers were the architects of our youth-obsessed popular culture, but as the bulge passed through the python, advertisers didn't stick with them. Unlike Moses Neimer, who created Much Music in 1984, which was aimed directly at the youth market. Today, he owns Zoomer Media, aimed at the 55 plus crowd. When asked why he changed

sides, he points out that he hasn't. Moses just followed his people. 35 years ago, his audience was 25. Now, they're 50 plus. As someone recently said, ageism is the last socially condoned bigotry. Even with $1.6 trillion in buying power, corporations remain leery of 55-plus consumers. Even though they're growing at a faster rate than younger ones,

we'll inherit even more money and have a lot of years left to spend it. Yet, it's astounding that a touch of gray is keeping advertisers away when you're under the influence. I'm Terry O'Reilly. This episode was recorded in the Terrastream Mobile Recording Studio.

Producer, Debbie O'Reilly. Sound Engineer, Jeff Devine. Under the influence theme by Ari Posner and Ian Lefevre. Music in this podcast provided by APM Music. If you enjoyed this episode, you might also like Selling Death, Season 3, Episode 20. You'll find it in our podcast archives. Follow us on Facebook, you youngsters.

See you next time. Fun fact. The use of Viagra has skyrocketed among men You youngsters, see you next time. Fun fact. The use of Viagra has skyrocketed among men aged 18 to 45. Who's feeling old now?