Video: Priceline boldly goes after the older consumer

By Michael E. Ross Reporter
updated 8/17/2004 10:35:10 PM ET 2004-08-18T02:35:10

Americans who watch TV advertisements to help them pick what cars to buy might be forgiven if they thought they'd entered a Wurlitzer-jukebox time warp from the 1960's. Madison Avenue has rediscovered the music of a bygone era that's not so bygone anymore, in the process contradicting one of modern advertising's abiding laws.

Yeah, young's still cool. But nowadays, it seems, the grayer the better. That emerging philosophy turns on its head a rule advertisers have historically lived by to beat a path to the doorsteps of younger consumers.

Just cruise the dial and you're bound to have seen the ads. Some of them are a year or two old, while others are part of new campaigns fresh off the showroom floor:

  • General Motors' Cadillac nameplate is using Led Zeppelin's 1971 classic “Rock and Roll” to advertise its line of radically redesigned vehicles.
  • Chevrolet introduced its line of new cars and trucks with a sonically-reengineered version of Steppenwolf's 1968 chestnut “Magic Carpet Ride.”
  • Hummers are being pitched in television ads using The Who's “Happy Jack” (1966) and “Help Yourself,” Tom Jones’ hit from 1968.
  • Saab, another GM nameplate, borrowed “All Day and All of the Night,” the enduring Kinks classic (vintage 1964) and “Signed, Sealed, Delivered,” the 1970 Stevie Wonder classic.
  • The latest TV spots for Jaguar highlight the special relationship between a driver and a car with “I'm in Love With My Car,” a Queen song from 1975.
  • And Audi, owned by Volkswagen, launched a campaign featuring a freshly-tweaked version of David Bowie’s 30-year-old “Rebel Rebel.”

It's not just cars and music, either. Witness the recent ad campaign for Target Corp. stores featuring “You Got It,” recorded in 1989 by the late legendary singer Roy Orbison; Tony Bennett and Diana Krall crooning “What a Wonderful World” for MCI; or Hewlett-Packard's use of the 1971 Who classic “Baba O’ Riley.” The Rascals’ 1968 classic “Beautiful Morning” is the soundtrack for Merck's Vioxx arthritis-drug ads; Queen's anthemic 1977 classic “We Are the Champions” is used to pitch Viagra; and a series of very recent spots for the travel service feature “Star Trek” icons William Shatner and Leonard Nimoy, both 73 years old.

The shift in ad strategy takes advantage of the phenomenal buying power of Americans over 45, and is a response to the changing demographics of the American consumer.

Why the change? For corporations eager to cash in on a public that's by degrees getting older and wealthier, the answer is the same as the one offered by the infamous Willie Sutton when someone asked him why he robbed banks:

“That's where the money is.”

High-wage earners
The latest version of the Statistical Abstract of the United States — the Census Bureau's annual snapshot of virtually every dimension of the American population (what it is, what it earns and what it spends) — shows the financial disparity between young and old.

Video: Saab works out the Kinks Older Americans — those between 45 and 64 years old — have dramatically higher actual and median incomes than those 15 to 34 years old, and they spend more for cars, clothes, entertainment, furniture and other personal goods than their younger counterparts.

A May 2004 report from the American Association of Retired Persons, perhaps the most recognized advocacy organization for older Americans, found that by 2001, consumers 45 and older were responsible for 52 percent of total consumer spending.

“The money is not where the youth is and it’s taken Madison Avenue and corporate America a long time to realize that,” said David Wolfe, a marketing consultant based in Reston, Va. “Now that youth no longer rules ... the rules of marketing are changed.”

At least one company came to this knowledge the hard way.

Mitsubishi Motors got the message when the car maker announced last year its plans to shift advertising strategy to focus on older car buyers. The reason was about as practical as you can get: many younger car buyers couldn't make the payments — one reason why Mitsubishi took a $304 million charge last year against consumer loan defaults, and an additional $416 million charge for losses in the first half of this fiscal year.

Mitsubishi reported a $2 billion loss for the fiscal year that ended March 31, and the company expects to stay in the red this fiscal year, the Associated Press reported.

Decisions based on cost, quality
AARP conducted a telephone survey of 1,226 U.S. residents over age 45 to determine how they select the products they buy. The report that followed found that older consumers are more likely to make buying choices based on cost and quality of the product, not because of the brand name.

Video: Who do you love? Chevrolet, maybe? Jim Fishman, AARP publisher, said “brand loyalty does not always increase with age. Marketers who abandon this kind of stereotype will find themselves well rewarded. The 45+ age group is growing rapidly, has a high level of disposable income, and is ready to switch to new brands,” Fishman said on the AARP Web site.

There's a lot at stake: AARP's report, which canvassed consumers between August 2001 and March 2002, also found that in the United States, the 93.7 million adults 45 and over have more than $750 billion in discretionary household income at their disposal. That's a lot of Chevrolets.

“The 25-to-44 population has historically contributed most of the consumer economy,” Wolfe said. “But on a nationwide basis, sales of everything from boomboxes to jeans are declining in the 25-to-44 age group. The 45-to-64 age group is growing, so many companies will not survive unless they find out how to market to these older consumers.”

‘Ageless marketing’
For Wolfe, who heads Wolfe Resources Group and is author of a book on trends in U.S. marketing, some companies understand it better than others. “The company that has done the most, who saw this earliest is New Balance sneakers. They practice what I call ageless marketing, an approach to marketing that strives not to associate a brand with an age group.”

Wolfe said the companies that get it should do well in the future, and right now. “The reason they're doing so well is they've learned how to talk to older people, they recognize that older people don’t buy for the same reason that younger people buy.”

Wolfe identified Sony as a company beginning to aggressively market products with a less age-based focus, “though I'm not sure yet what inroads they're making” and said that several retailers of womens apparel — “Chico’s is one” — have started to figure it out. Other companies with plans to market products to older Americans or campaigns already underway include Ford Motor Co. (which owns Jaguar), Target and Virgin Megastores.

Declaration of independence
Two factors are playing a part in the change in advertising focus; both recognize the trend toward independence among older Americans.

There's a growing tendency for older Americans to stay in their homes: A 2000 AARP report showed that 80 percent of senior citizens preferred to live at home in their later years, instead of pulling up stakes and moving to a retirement home. According to the report, 70 percent of those Americans each made at least one change to their homes to enhance their mobility.

The other factor is a matter of attitude: thanks to better medicine, people are living longer, and they're looking forward to living longer. A National Council on the Aging study found that 44 percent of Americans 65 and older expressed enjoyment with their lives, and 84 percent of those Americans said they'd be glad if they lived to be 90.

For advertisers, that translates into active, spending consumers for years to come.

The Associated Press contributed to this report.


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