Harnessing the Boom1 Nov, 2008 By: Bridget McCrea Response
Direct response marketers take aim at America’s largest demographic.
They number 78 million, control a majority of the nation's wealth and own 65 percent of the aggregate net worth of all U.S. households. With $2.3 trillion in disposable income, these folks who were born between 1946 and 1964 comprise America's largest generation, and are more affectionately known as Baby Boomers. Their generation's sheer size makes them especially important to direct response marketers that tailor their campaigns to meet the needs of this enormous-yet-fragmented demographic.
Referring to the Baby Boomer generation as the "Silver Tsunami," Chas Kutchinsky, managing partner with iBOXfilms in Downingtown, Pa., says the financial services industry was among the first to recognize and target the demographic with everything from financial products to insurance to banking services.
"The industry recognizes the lifetime value of that customer, and started marketing to the Baby Boomers by offering financial services that had the demographic in mind," says Kutchinsky. The business case for such efforts is clear:
during the next 10 years the Boomer segment — which spends $3 trillion annually — will increase by 23 percent, while the 18-to-49 demographic will only grow by 5 percent.
"As Boomers, we've been purchasing for most of our lives, and we buy on instinct rather than by analyzing and doing the matrix," says Kutchinsky. "Our belief is that if it feels good — and people make me feel good about it — then I'll buy it."
The Big Boom
The Baby Boom is a well-documented "explosion" of births that took place after American soldiers returned home from World War II. Often associated with the 1960s, the Baby Boomer generation comprises 78 million people who were born in the 19 calendar years following the end of WWII. Between now and 2010, the total spending for over-50 households will increase by more than $900 billion.
Just the Facts
Much of that spending (47.6 percent) will go for "nonessentials," according to the Bureau of Labor Statistics. Other spending trends include the fact that half of Baby Boomers plan to buy a new home after retirement, and 96 percent participate in word-of-mouth or viral marketing by passing a product or service information on to friends. Combine their sheer size with the fact that they have money and are willing to spend it, and the Baby Boomers become a very important part of any marketer's campaign.
"They represent an enormous concentration of wealth and disposable income," says Mike Medico, president of E&M Advertising in New York (and a member of the Response Editorial Advisory Board). "They are also at a point in life where they have a lot of leisure time, and are looking for the very lifestyle-oriented, fitness-oriented and utilitarian products and services that direct response marketers provide."
Getting those products to this eager crowd of consumers isn't always easy, as many companies have already discovered. Because their age span ranges from 44 to 62, they tend to be a very fragmented crowd with varied tastes. While some still have young families and are at the peaks of their careers, others are empty nesters who are at or near retirement.
"There is a big different between a 62-year-old person and someone who is in his or her 40s," says Bob Yallen, president and COO, Inter/Media Advertising in Encino, Calif. (and a member of the Response Editorial Advisory Board). "The market is widespread, and one size does not fit all."