Not surprisingly people over 65 years of age behave very differently to people who are much
younger. These differences extend to major deviations in the use of media and communications.
You may ask why this is important? And the answer is quite simply that if you really want to sell
goods and services, on average it’s the older people who have cash in the bank and can afford to
buy. The majority of younger people, supposedly the most desirable to advertisers, hold the most
debt, (especially if they’ve been to university), live on credit and generally can’t afford to buy much
other than absolute necessities. A good example is car (auto) buying - fewer youngsters are now
buying cars, preferring instead to buy cheaper treats such as electronic goods like iPads and
smartphones. To a young and fragile personality, a sense of identity doesn't come from the car or
motorbike they drive, as it did to their grandparents’ generation, it now comes from the latest
smartphone or trendiest electronic watch. People under thirty years old, more often than not,
place their highest value on a device with an Apple logo. Nowadays few youngsters of either sex
have enough spare money to finance a new car.
This isn't a contemporary short term trend but something that has been steadily increasing since
the cost of gaining higher education has become more expensive. This is the age group, the so-
called millennial generation, which is suffering the highest unemployment, and under-employment,
of any age group since the 1930s depression. So why on earth do television ads for cars almost
exclusively feature people in their early twenties rather than their late fifties? Could it be that the
manufacturers will actually make more money from financing the credit transaction they sell to a
youngster than they’ll make from a customer who actually buys the car with cash? Earlier this year
my wife and I met a 75 year old lady who took us for a drive in her brand new electric BMW that
she had recently bought for cash received from a pension lump sum pay-out. She was very
enthusiastic about her car. But look at BMW's advertising for this electric car and you’ll see that it’s
almost exclusively populated with 30 year old macho males, the kind of male models you see in
shaving advertisements. Our friend chose her car because she likes BMWs and as she’s gone
“green”, and her house is solar powered, the electric car is perfect for her. But you can see that the
disconnect between the advertising fantasists and the customers who actually buy the products has
never been higher, but the media is finally catching up with actuality. As The Daily Telegraph’s
Harry Wallop points out: “...There are currently 18.3 million over-55s in the UK, a figure that is
expected to hit 20 million by 2018. He continues “…Sixty five per cent of all new cars are bought by
those over the age of 50, half of all the cosmetics are bought by the over 50s. In 2012, a record 36
per cent of UK cinema goers were over the age of 45 – helped by the success of Best Exotic
Marigold Hotel, Salmon Fishing in the Yemen and other less flashy films…” Wallop really gets the
point. He goes on to explain: “It is an age group used to the ownership of things – be it vinyl
records or cameras – rather than the more ephemeral idea of streaming, instagramming or
downloading for free. This generation buys products. Even in the technology sector, an area you
might presume was resolutely skewed towards the youth market, older customers are out in force.
British 45-54 year olds have the highest household ownership of digital or video cameras (excluding
mobile phones) with 56 per cent owning one, compared to the national average of 51 per cent,
according to Mintel. The same is true with sat navs and quite a few other devices…”
I've recently become acutely aware of this truth and the advertising paradox. My wife and I have
bought a TV that is only connected to the Internet. We don’t actually watch that much television
but what we do choose to see is now streamed, nothing is seen “live,” and nothing is downloaded.
The reason for our choice is simple: We are not sports fans and we reckon we consume more than
enough news from Radio 4 or via the Internet using our desktops or tablets, so live TV has little
appeal for us. Interestingly, we’ve always hated the tyranny of “appointment TV” and, over the
years, we've bought a variety of recording devices that meant we could watch a program exactly
when we wanted to, and not at the prescribed time of transmission. There’s a bonus in this. It’s a
quirk of an out-of-date U.K. law that, as we stream TV programs from the cloud after they have
been broadcast, we can legally watch BBC productions without paying for a TV licence. That saves
us £145 per year which is easily enough to purchase Amazon Prime or Netflix if we want to extend
the range of films we watch. All well and good but, there is a significant fly in the ointment, our
“smart TV” is not so smart because we can no longer skip ads. We’re having to revert back to the
age-old techniques of making a drink or going to the loo whilst the TV ads are playing. Our modern
ad avoidance methods hark back to the 1950s and the invention of a workable TV remote control.
Prior to that time people would either do what we do now, or numbly watch the TV ads or switch
channels during the commercial breaks. Maddeningly, the downside of streaming is if one tries
skipping the TV ads they will just repeat, and repeat.
As a consequence we've been exposed to far more TV advertising than we’ve seen in many a year.
Hence my earlier comments about how many of these wretched advertisements completely fail to
connect with the real customers for the products and services. The dirty little secret of ad-
supported streaming television is that one is likely to be bombarded with far more ads than when
watching live TV. The reason is that television broadcasters are having to pay a content distribution
network (CDN) to stream the programs. With that additional cost, plus the fact that online TV ads
yield lower revenues that broadcast TV ads, the commercial broadcaster's response is to fire ever
more ads at people who watch their programs. Such relentless repetition of irritating ads is
unwittingly driving people to use subscription products like Netflix that do not show advertising.
Sir Martin Sorrell, the chief executive of global advertising group WPP, who manages over $70
billion of advertising expenditure, recently said that he thinks Netflix will eventually have to show
advertisements to its subscribers if it is to become profitable. I do hope he is wrong.
I can't think of a television ad that I've seen whose product or service I now want to buy.
Advertisements are obviously meant to increase the acceptance or sales of whatever service or
product they’re promoting, but the intrusive number of adverts being repeated apparently ad
infinitum within a program does the complete opposite. In fact my wife and I have become so
annoyed that we’ve vowed never to buy any of the branded products pushed so mercilessly at us.
Recent Microsoft research into online advertising concluded that: “the practice of running annoying
ads can cost more money than it earns.” Spot on! Perhaps when more “big data” analysis shows
that a great deal of advertising is counter-productive, as well as expensive for advertisers, brands
will resort to more modern and effective selling techniques.
In this digital age one of the world's fastest growing brands is the Chinese smartphone
manufacturer Xiaomi. The company recently claimed a world online record by selling 2.1 million
phones in 12 hours during a sales promotion. Instead of wasting money on expensive advertising
and distributors Xiaomi cleverly exploits the power of the Internet by selling directly to customers.
Flash sales of heavily discounted prices are available for just a few hours – and they’re always
heavily promoted virally by Xiaomi's own customers. Xiaomi is truly a 21
created just five years ago, totally free of the baggage of using old fashioned selling techniques.
This fledgling company has understood a fundamental truth: Most buyers, whether the poorer
young or the richer old, would far rather prefer a lower price than annoying advertising. But don't
expect other companies to quickly follow suit, the entrenched vested interests of advertising
agencies will need to be overcome first.
The PowerPoint chart above uses Ofcom (U.K. Government data) from a recent diary survey of 259
people over the age of 65 years. This data has then been compared with the averages produced
from similar research across all ages of adults to see the different behaviours. Ironically,
commercial companies don't get the opportunity to do this type of detailed research on older age
groups as most brands still focus their attention on those young but hard-up consumers. Part of
this outmoded logic is that the young are setting up home and are therefore more likely to buy
more products and services. Brands seem to have totally overlooked the U.K.’s 30-year trend: that
divorce figures for men age 60+ years has risen 73% since 1991. This isn’t just in this country,
nearly every developed nation in the West has produced similar statistics. The rise of Internet
dating has been matched by women becoming more economically and emotionally independent -
and the effects are devastating. According to the U.K. Office of National Statistics (ONS) those poor
old, 60+, men getting divorced have, on average, been married for 27.4 years.
How on earth could brands have missed this? Or the effects of another life-changer: retirement?
My wife and I have recently moved house because retirement meant we could get out of frenetic
London and achieve a far more civilised existence in sunny Torquay in Devon. This has prompted a
positive buying bonanza – we’ve changed all the utility companies; bought the components for a
new high speed network within our house; a new alarm system; a new sound system; an expensive
running machine; a rowing machine; new vacuum cleaners for the house and garden; the inevitable
new curtains, cushions and rugs and much, much more, including the new “less than smart” TV
already mentioned. It seems remarkable that every one of our purchases has one thing in
common - the advertising and product brochures feature young people in their 20s – there isn't a
grey hair or a wrinkle to be seen. No wonder retail sales are flat.
Note that the data in the chart above shows that older people are 10% more likely to watch catch-
up TV, that the older (boomer) generation can still read so, unlike the youngsters, we senior citizens
are 16% more likely to read a newspaper (printed or digital) and 14% more likely to read a book
(printed or digital). Seniors are also 26% less likely to spend time on social networking and 20%
less likely to use instant messaging as well as being 18% less likely to buy online. (Although that
one doesn’t hold true for my wife and me). In short older people spend far more time in the real
world than a digital virtual world and, as a consequence of being retired, they have much more free
time than the young. Brands need to wake up and understand the huge difference in behaviours
between older and younger people. One thing is unmistakable: many of the older age groups are
fortunate enough to have a high level of spending power and they get far more exasperated by
advertising than younger people. Research from Limelight Network's report The State of Online
Video in 2015 clearly shows that for online ads to be effective with streaming video they need to be
personalised and easily avoided. This means that if an advertisement isn’t pertinent to an
individual, it can be skipped so the brand doesn't become negatively tainted by being recalled as
annoying. The digital world is all about choice and relevancy, whatever age one is, and it’s high
time that the television industry worked this out.
...with analysis & insight...
Old money...is different