Currently aged 64 and up, members of both generations comprise a large segment of the population that’s often overlooked in favor of the huge Baby Boomer demographic and/or younger consumers.
Consider the fact that during the 18th century, the 65-plus American demographic comprised just 2 percent of the population. Modern medicine, attention to safety and fewer physically demanding jobs have helped to boost that percentage, and more than half the people who have ever lived to the age of 65 are alive today.
With life expectancies hovering around 78 years and a huge number of Baby Boomers following in the Pre-Boomers’ footsteps, by 2050 the number of individuals older than 65 will outnumber those younger than 20 for the first time in history.
By the time that evolution occurs, marketers will surely be allocating the bulk of their resources for targeting older Americans … but why wait? Tackle the learning curve now, says Bob Yallen, president and COO at Encino, Calif.-based InterMedia Advertising, and you’ll be in good shape when the shift takes place.
“2050 is not that far away,” says Yallen, a member of the Response Editorial Advisory Board. “To get ready, marketers should be taking into account the fact that people are living longer, and work that into their advertising strategy.”
Take technology, for example. While one may assume that pre-Boomers steer clear of newfangled communication methods, Yallen says more of them are embracing the Internet, E-mail and even social networking.
“Whereas five years ago the typical older American didn’t surf the Web, many are now using the same media that younger generations are,” says Yallen. “They’re adapting to technology and using it to become more informed consumers. After watching ads on TV, for example, they take the next step and visit the sponsor’s Web site to get more information and fill out lead forms.”
Older generations also watch more television than any other generation coming up behind them, which makes them an especially attractive target for DRTV marketers.
Yallen, whose firm uses the term “silent generation” for individuals born 1937-1945, says such consumers are 29-percent more likely to be watching TV than overall viewers, and are a whopping 50-percent more likely to be tuned into the TV than individuals aged 35 and younger.
“Because of this, the silent generation is much easier to reach,” says Yallen, who adds that news-oriented stations like CNN and Fox News tend to be especially popular among older adults (with the 65-plus crowd comprising 46 percent of the audience). “As a result, marketers can reach them very efficiently on a cost-per-thousand basis.”
There’s so much hype over the 78-million-strong Baby Boomer generation that both the Greatest Generation and the Pre-Boomers tend to get overshadowed. Assuming that older consumers will somehow get “caught in the advertising net” designed for younger buyers is a mistake, as there are distinct differences between the generations that no marketer can afford to miss.
Take the Pre-Boomer generation, for example. Typically defined as those born during the 20-year period prior to the end of World War II, or from 1925 to 1945. The generation comprises about 50 million people, and is sometimes referred to as the “greatest generation” or the “luckiest generation” (because they were born immediately after the Great Depression and were either too young or too old to serve in any major wars).
About 95 percent of Pre-Boomers are currently retired, with many of them dodging the bullet of the recent recession due to the fact that they already invested conservatively and were residing in their retirement residences when the maelstrom hit. A Pre-Boomer himself, Don Potter, a DRTV pioneer who is now a consultant and blogger (www.pre-boomermusings.com) in Los Angeles, says that the typical member of his generation can’t recall the pain of the Great Depression, but does have vivid memories of World War II and the years immediately following it.
Travel is one of the many industries that have taken a hit during the recession. A recent Travel Industry Association (TIA) report shows that leisure travel is down 1.3 percent and business travel is off 2.9 percent in 2009. And the airline industry is projected to lose $4.7 billion in sales this year, according to the International Air Transport Association (IATA).
However, the fact remains that many people need to travel to conduct business, even if it is less frequently or more inexpensively than in past years. And travel still ranks among the top luxury expenditures for many Americans.
So those working in the travel marketing industry have spun the negative of the recession into a positive by creating attractive incentives for travelers — from lower airfares and free stays at hotels to loyalty points and VIP perks. Marketers are also focusing in to target niches such as business travelers, families, honeymooners and more. Though advertisers are reaching consumers through traditional DR, one of the strongest marketing tools in the vertical in 2009 are online social media networks — taking the power of word-of-mouth marketing into the digital age.
Points, Perks and Incentives
Although it depends where in the country you go, most cities are struggling to match normal tourism levels. According to Peter Gorla — vice president of marketing for Hospitality Marketing Concepts (HMC) and vice president of program strategy and E-commerce for VOILÀ — most hotels are only at 40-60 percent occupancy this year and are looking for ways to stimulate demand.
HMC, based in Newport Beach, Calif., has been hosting loyalty programs for more than 22 years — and 20 of those have been focused on paid membership in the hotel industry. Paid membership is usually based on geographic location around a hotel or groups of hotels in a network.
Most of HMC’s customers are small to mid-sized businesses — a demographic not usually touched by other loyalty programs, which target either personal travel or large businesses. HMC uses marketing to target the owners, CEOs, sales reps, etc., of these small to mid-sized companies, often through sales calls. Offers include 10-20 percent off the daily rate of a member hotel, coupons for food and beverage, VIP access to amenities, and even free nights.
“This is not your traditional points program,” says Gorla. “Our databases are between 1,000 and 3,000 people. Within three months, we can make an impact on an initial database. We’ve seen a lot of growth lately. With the recession, we’ve picked up a lot of new hotel partners — more than 300 new hotels this year.”
HMC has advertised itself as a way for hotels to introduce their properties to a new market of customers. Currently HMC’s partners include hotels across the United States; the Intercontinental in Australia, Asia Pacific and China; and the Hilton in the Middle East, among many others.
HMC’s partner hotels abroad do offer a more traditional points system, which varies with each market, to drive consumer interest. The points-based system, VOILÀ, was launched a few years ago and links 100 hotels, made up of six hotel groups. “Loyalty is a big thing, and we have a well-rounded solution right now,” says Gorla.
In order to handle the downturn, there are two schools of thought used by hotels and hotel marketers. One believes if demand is down, then a company should lower rates. The other concept centers around keeping rates higher and dealing with lower occupancy. Gorla says studies show that hotels keeping rates up and not discounting are actually doing better than those lowering rates. Why?
“Today, what we’re seeing is people are traveling out of necessity, rather than for leisure. So if they need to go, they’re going to go no matter what,” says Gorla. “If you discount it, then they’ll pay that price instead and you’ll lose money.”
Basically, a hotel still has minimum costs, such as keeping staff on in the dining room. So if a hotel offers meal coupons and brings guests into the dining room, it can help offset the costs of lower occupancy. These are the offers, incentives and add-ons that HMC works with its hotels to offer consumers as a way to get customers in the hotel before upselling them on services.
How does HMC market its incentives directly to both consumers and its hotel partners? The company does a mix of both online and offline communications, such as E-mail, direct mail and welcome packages. While throughout a customer lifecycle, E-mail is important, telemarketing is a large part of the company’s initial marketing communication with potential customers.
“Most memberships are sold over the phone, so we do call people quite a bit for promotions, or if a hotel has a strong demand for something,” says Gorla. As for its VOILÀ division, in 2010, the company will send campaigns through paper-based communications for the points division.
Also, while many of the annual membership renewals are done via E-mail, some are done through SMS texting to mobile phones. “We’ve also used mobile as another promotions channel,” says Gorla. “We allow people to opt into it because it’s more sacred than other channels. People want a lot of control around phones.” In 2010, HMC plans to launch some mobile Web sites for both Clubhotel.com and VOILÀ. And VOILÀ will definitely have an iPhone app in 2010.
“Because real estate as an industry is going through a transformation, the relevance of direct response marketing is rising. Consumers are so informed, and technology now allows micro-targeting and one-on-one marketing,” says Camilla Sullivan, senior vice president, marketing, for Parsippany, N.J.-based Better Homes and Gardens Real Estate LLC. “Like the PC business 10 years ago, if you don’t have a direct connection to consumers — through whatever media — there’s a challenge to stay relevant. Relationships are the glue that keeps the real estate market together. Everyone is now getting religion on direct response.”
Sherry Chris, the company’s president and CEO, agrees. “There’s a lot of relevance for direct response marketing in this business today. Think about this statistic from the National Association of Realtors: 80 percent of consumers that list a home for sale do not list it with the agent they purchased the home from. This trend comes from the real estate boom, so obviously with the bust that happened, a lot needs to change. Direct allows agents to maintain customers and continue communication with consumers.”
Chris and Sullivan are part of an exclusive team put together by the brand’s parent company, Realogy Corporation — the world’s largest real estate franchisor — to recreate the Better Homes & Gardens Real Estate brand, which it had licensed from Meredith Corp., the publisher of Better Homes and Gardens magazine. The brand had been out of commission since 1998 after Meredith sold its real estate business to GMAC.
The venture was announced in October 2007, but the brand wasn’t available — thanks to the terms of GMAC’s 1998 deal — until July 2008. That gave Chris and Sullivan nine months to build an entire real estate franchise brand and network.
It seems like a daunting task — if you don’t know Chris and Sullivan. However, with their shared backgrounds in real estate and marketing, this duo should never be underestimated.
An International Flavor
According to Chris, Realogy knew that the Better Homes and Gardens brand was coming available when the company contacted Meredith Corp. in 2006 to discuss ideas for licensing the name and putting it out in the market again.
The original Better Homes and Gardens Real Estate brand operated from 1978 until 1998, and Meredith built it into one of the most respected names in the real estate world. However, when the company sold its real estate business to GMAC, it maintained control of the brand name but agreed to a 10-year moratorium on its use.
Second-quarter 2009 short-form DRTV media billings research shows the completion of a full year’s worth of declines, beginning with third-quarter 2008. TNS Media Intelligence’s (TNSMI) data reports a 7.3-percent loss of $83.4 million for 2Q 2009 as total spending remained just above the $1 billion mark — $1,054,021,200.
This performance mimics 3Q 2008’s loss ($83 million) to a tee. However, as noted in first-quarter 2009 analysis, the sharp drop in the average cost of media offsets any decline in spending — ad rates have definitely declined in the past year and the frequency of short-form DRTV campaigns aired have increased due to bargain rates.
To emphasize this point, the total number of unique short-form DRTV campaigns have increased this quarter by about a hundred over 2Q 2008’s heyday, and both averages of money spent on a campaign based on the total and those outside the top 40 have decreased by 14.9 and 3.4 percent.
Only seven of the 17 vertical categories claimed gains this quarter, two fewer than 2Q 2008. Repeating its 1Q 2009 performance, the “Drug and Toiletry” category boasted the highest dollar gain with a $44.9 million advance, pushing its total to $418 million. “Food and Beverage” came back for seconds, as it earned the top percentage-gainer honors, rising from zero a year ago to post $7.6 million this quarter.
FTC Sets New Guidelines for Endorsements, Testimonials
WASHINGTON — The Federal Trade Commission (FTC) announced the approval of final revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations and celebrities, as well as the disclosure of important connections between advertisers and endorsers.
The guidelines, last updated in 1980, now state that advertisements featuring a consumer and conveying an experience with a product or service as “typical” when that is not the case, will be required to clearly disclose what consumers should generally expect. The earlier version of this guideline allowed advertisers to describe the consumer’s experience as long as they included a “results not typical” disclaimer. The new version goes into effect on Dec. 1.
“This could have far-reaching effects on advertisers. No longer will direct marketers and advertisers be able to highlight their ‘best’ testimonial — feeling that they will have zero liability by placing the obligatory ‘results not typical’ disclaimer language on the ad,” says Shannon L. Van Dorn, Esq. “This means that in order to avoid potential regulatory hot water, they will have tout the ‘average’ testimonial — and not the exceptional one.”
Other new guidelines address endorsements by bloggers or word-of-mouth marketers, stating anyone who receives cash or in-kind payment to review a product is considered an endorsement. This is the first-ever guide addressing bloggers and others in non-traditional media.
Finally, the Guides address celebrity endorsers, for the first time making them liable for false or unsubstantiated claims.
In reaction to the announcement, the Electronic Retailing Association (ERA), which had fought to keep the regulations from becoming too restrictive, issued a statement and offered guidance on how to keep endorsement and testimonial ads in line with the Act.
“Like the FTC, ERA fully supports enforcement against businesses and individuals that cut corners, and jeopardize the healthy and vibrant $300 billion electronic retailing sector,” says Julie Coons, president and CEO of ERA. “As leaders in self-regulation, we look forward to partnering with the FTC to ensure the relevant communities are educated and fully able to comply before they become involved in costly legal challenges.”
Questex Reaches Agreement With Lenders on Restructuring
The Newton, Mass.-based company — which also sponsors 28 conferences and has more than 150 trade Web sites — filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Oct. 5 in order to restructure its debt for continued operations.
However, based on the strength of the company’s business plan, senior lenders have already committed financing as part of the filing, including both debtor-in-possession (DIP) financing and exit financing.
“We are pleased with the strong support we have received from our lenders and business partners for a restructuring that will allow us to reduce our debt and achieve a strong, sustainable capital structure,” says Questex CEO Kerry Gumas. “Questex has attractive assets, marketing-leading brands, a great talent base of professionals and a track record of performance that has allowed us to continue to generate strong cash flows. This restructuring will better position the business for future growth for the benefit of all the company’s stakeholders.”
A group of the company’s senior lenders have entered into an agreement to serve as the stalking horse for a purchase of substantially all of the assets of the company pursuant to a 363 sale. The company expects the process to be completed within 60 days.
The first priority for the Response brand and the entire Questex family of properties will remain its valued customers and providing them with the same quality products and services that they have come to expect.