In late winter 2002, a shot was fired that was heard ’round the business world. It came in the form of a massive volley of criticism that ABC drew when it became public knowledge on March 1, 2002, that the network was negotiating with CBS’s late night comic host David Letterman to replace Ted Koppel’s venerable Nightline.
The motivation to dump Koppel was Nightline’s older audience. The average age of its viewers was 52. Letterman’s audience averaged 46. That six-year age difference translated into a 30-second ad rate of $40,000 on Letterman’s show versus $30,000 on Koppel’s show, despite Koppel’s 10 percent larger audience.
Suddenly, not just ABC but Madison Avenue found itself under fire for its view that the value of marketing investment declines in inverse relationship to consumers’ ages, starting at age 35, becoming virtually nil at age 50 in most product categories.
Numerous talk shows and a slew of news and trade magazine articles examined the issue in some depth, calling in marketing experts from big agencies and advertising companies to explain the reasoning behind why advertisers ignore much larger and far wealthier audiences in favor of smaller and decidedly less affluent ones. Interviewers and journalists often expressed their bewilderment over advertisers’ willingness to spend as much or more for a 30-second spot on a show aimed at young audiences of five or six million as they might pay for the older and much more affluent audience of shows like 60 Minutes, which attracts 15 or so million viewers. Clearly, traditional marketing ideas about the value of younger markets that emerged when the young ruled markets, were as embedded and as difficult to dislodge as impacted wisdom teeth.
Taunted by pundits who couldn’t understand why the far wealthier New Customer Majority was being widely ignored, mavens of Madison Avenue defensively fired back ungrounded explanations of why companies should continue devoting most of their marketing dollars to younger adult markets with a population growth that is nearly nil in contrast to the explosive population growth of the New Customer Majority.
Consider the words a media buying company CEO uttered in defense of ABC’s decision to fire Koppel and hire Letterman. The CEO, whose company spends over $4 billion annually in advertising buys, told Bob Garfield, host of National Public Radio’s On the Media, "They [younger people] haven’t made all their brand choices, particularly the younger side of that spectrum, and if you could reach them and get them to be users of your brand at an early age, you’ll have them for a lifetime."
In the vernacular, that’s BS. No research supports that statement. Yet, it is one of the most commonly offered reasons to justify spending the lion’s share of marketing dollars on youth and young adult markets. Not only is that the stuff of barnyard residue, new research buries it.
AARP, whose 35-million members obviously aren’t very popular on Madison Avenue, engaged Roper ASW to assess brand loyalty by age. Roper found that product category correlates better with brand loyalty than age does. Within some product categories—for example, athletic footwear, leisure wear, car rentals, hotels, and airlines—people aged 65 and older were less tied to specific brands than 19-to-44-year-olds were.
The idea that companies should spend money to get younger people into their brands so they will "have them for a lifetime" is specious. How many companies think and plan ahead two, three, or four decades? Corporate America is notoriously short-sighted. Most companies pay far more attention to Wall Street time frames than to long-term marketing time frames. Why risk betting on a future that is 20, 30, or 40 years away? How many of today’s brands will even be around then? Most of us who are old enough to remember the JFK Camelot years can recall numerous late, great brands like Ipana, Woolworth’s, DeSoto, Packard, BurmaShave, Emerson, Philco, Nash, Old Gold, Life Buoy, Brill Cream, Teal, Collier’s, and Pan American Airways.
It’s time that marketing grows up, stops forcing ill-fitting answers like a cornered teenager with no rational defense for his actions, and becomes unstuck from 1960s thinking. The so-called aging of America (and all other developed nations) is dramatically, if not radically, changing the rules of marketplace engagement.