Why marketers need to tap into the huge purchasing power of over-45s

Lately there has been some criticism of the 25-54 demographic, which for the last few decades has become the most important to advertisers looking to purchase slots on television. Things are changing, however, and News Works has just released information supporting this, revealing the over-45s segment represents a $23.5 billion spend opportunity.

Over-45s in New Zealand have huge purchasing power with travel and home renovations topping their plans in 2016, a News Works release says.

Research has shown that 50 percent of people over 45-years-old say they plan to travel around New Zealand or overseas in the next 12 months, while 29 percent are planning home renovations.

The research behind this insight was from a survey of nearly 1,700 over-45s conducted by Colmar Brunton on behalf of News Works.

The research also sheds light on over-45s’ media habits, showing newspapers are still popular with this demographic, with 79 percent of respondents saying they enjoy reading newspapers as they’re in control of what they choose to read.

“The research has drawn some strong parallels between newspaper reading and purchase behaviour,” says News Works head of marketing Diane Hannay.

“For example, 59 percent of respondents have actually bought something as a result of seeing it in the newspaper.”

Seventy-two percent say they decide where to buy something when reading the newspaper, which shows the influence the daily paper has on buyer behaviour, the release says.

Four out of ten New Zealanders are already in this age bracket, which is projected to reach 42 percent of the population by 2020 and Hannay says it’s time advertisers took a closer look at this opportunity.

“Advertisers have been very eager to appeal to the millennial generation for some time, often favouring digital and social media channels to reach them, while the over 45s appear to slip under the radar a bit as a target market.”

Colmar Brunton executive director Chris Vaughan agrees, saying “they represent a largely untapped opportunity for businesses when you consider that outside of campaigns for funeral cover, retirement villages, home building and travel, boomers hardly feature in advertising.”

Vaughan says if other categories such as cars, banks, technology, to name a few, took this segment more seriously they would reap the rewards.

“They key to that is understanding more about the dynamics of the over 45s and that doesn’t necessarily come naturally to average New Zealand marketers who are in their early 30s.”

In online media, advertisers are increasingly pinpointing specific groups of people that may or may not lie within that demographic group. And what’s more is that programmatic networks enable advertisers to target in terms of interests rather than demographics.

This approach has also been adopted by Netflix, as indicated by the company’s vice president of product innovation Todd Yellin who said earlier this year that demographics were “almost useless” in terms of understanding its audience.     

“Everyone’s instinct was, ‘Yeah, if you find out their age and gender data, that’s fantastic’. But what we learned is: it’s almost useless,” Yellin said at South by Southwest last year. “Because, here’s a shocker for you, there are actually 19-year-old guys who watch Dance Moms, and there are 73-year-old women who are watching Breaking Bad and Avengers.”

ANZA chief executive Lindsay Mouat, who said earlier: “We are dealing with a much more complex media environment than when demographic targeting was established. If you take 25-54 for example, in a homogeneous media market that tended to deliver a 55-plus audience as well. No longer can you make those assumptions.”

Mouat pointed to the fact that age is not necessarily indicative of consumers’ preferences in the modern age.

“Demographics have been a hugely useful planning and buying tool for many years but now seems like a rather blunt instrument,” says Mouat. “Behaviours and attitudes transcend life stages to a much greater extent. New parents can be found from 15 to 50-plus and that doesn’t take into account the grandparents who are reinventing themselves as parents on behalf of their adult children.”

This statement resonates with TVNZ research showing significant changes in the nation’s demographic makeup.

“A quarter of the population is over 55 now,” said TVNZ group insights manager Kathryn Mitchell.

This means over one million New Zealanders fall outside the core demographic group used in the buying and selling of advertising. 

To read more on changing target demographics, check out our earlier story here.

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