The radio world was all a buzz this week when it was announced that Millennials now out-number Baby Boomers.
Well la-te-da.
Let me tell you why that doesn’t really matter.
William Francis Sutton’s Advice to Radio Operators & Advertisers
Sutton was famous for making money, lots of money. Actually, he didn’t really make money as much as he stole money. Sutton stole an estimated $2 Million over his forty year career. And while he denies he originated it, Sutton’s Law states that when diagnosing, one should first consider the obvious. So when Willie Sutton was asked by a reporter why he robbed banks all his life, he replied “because that’s where the money is.”
Boomers Are Where the Money Is
When the Boomers were growing up, rates of productivity and hourly compensation rose in lock-step. Productivity rose 96.7% and hourly compensation rose 91.3%. That changed in 1973. While productivity continued its upward slope, compensation flat-lined; productivity was rising around 75% in the period of 1973 to 2013, wages went up a mere 9%.
Worse, today a college education not only doesn’t guarantee increased earnings, it is more like an economic boat anchor that saddles a Millennial with student loan debt of tens of thousands of dollars as they begin to enter the workforce. Paul Campos wrote in the New York Times that “if over the past three decades car prices had gone up as fast as tuition; the average car would cost more than $80,000.”
Unlike us Baby Boomers, Millennials have come of age at the very moment when economic opportunities are few and far between.
Trading places: The income of younger working-aged families was falling long before the Great Recession and has now been surpassed by the rising incomes of families well into retirement age. (Median Income for Younger and Older Families in Inflation- Adjusted Dollars)
Stagnant Income
The average middle-class family today makes the same household income as it did thirty-six years ago. The problem is that today’s heads of household weren’t even born yet. We’re talking about different people. So the advantage of a middle-class family today over one three decades ago has evaporated. That’s if they can even be considered “middle-class” as 61% of Americans considered “middle-class” in 1971 comprise less than 50% of those families today.
Vastly Different Economic Trajectories
In the more recent economic history of America, each new generation would far surpass that of their parents’ in material standard of living. Millennials, and Generation X’ers who came before them, “are falling farther and farther behind their parents’ generation in most measures of economic well-being.” This represents a change being experienced by today’s living generations that is unprecedented in America’s history.
Millennials Number 75.4 Million vs. Baby Boomers at 74.9 Million
Here’s why radio and advertisers shouldn’t be freaking out over the headline that Millennials now out-number Baby Boomers. There may be more of them, but when it comes to discretionary income – the money that buys stuff – Boomers are still your “bank.” Don’t take your eye off the ball.
If Willie Sutton were operating a media company or an advertising agency, he’d be focused on putting his marketing investment where the best R.O.I. (Return On Investment) is, radio and its #1 reach that delivers 93% of Americans every week. It’s the traditional mass media that Boomers grew up with and still use in great numbers. Radio still delivers.
The “Music of YOUR Life” is Now The Rolling Stones
Back in the 1980s, I managed one of the first Al Ham “Music of YOUR Life” radio stations. Next to Rush Limbaugh, this big band based music format was one of two formats that were attracting people back to AM radio. I remember joking that one day, when we Boomers were their age, the music of our life would replace the sounds of Tommy Dorsey and Glenn Miller.
That day is here!
And there’s money to be made.
DickTaylorBlog 
…and we wonder why Bernie Sanders resonates with the millennials?
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Exactly.
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Dick…As usual right on! I could not agree with you more!
Madison Avenue has said for years that we are no longer in their desired demographic because we are “not influenced by advertising” but that is research based on our parents’ generation, and to my mind does not apply to Baby Boomers! Unlike our folks, who were old when they were in their 50s, we Baby Boomers will NEVER be old, and therefore dismissing us as desirable targets are just wrong! Hell, Fords have been our family’s cars of choice for years, but today there are two Hyundais in our driveway, and even though I have used Window’s Computers since the 1980s, I am writing this on my new Apple Macbook Air! No, to my mind Baby Boomers are still a very desirable target audience, and if you dismiss them than it is more about you and your misbeliefs than our ability to buy “things”.
Frank
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Frank, I grew up in a Chevy family.
Today, I drive a Honda, I have a brother who drives a Toyota and a son who drives a Hyundai. Not a Chevy to be seen.
I switched from a PC to a Mac at my university office. When my laptop needs to be replaced at home, it will turn into a MacBook.
I went from a pager to a bag phone to a flip phone to a Blackberry to an iPhone.
We are a generation that grew up with lots of change and we embrace change.
To write-off this market is like trying to find water in a desert. You’re going to come up empty (and thirsty).
Thanks for reading and adding to the discussion.
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Indeed today’s over 54’s aren’t your parents over 54. Agencies and advertisers ignore older adults (and their ability to spend) at their marketing peril. Perhaps a broader and more inclusive label would be 18-54+, the “+” indicating an openness to selling your wares to anyone and everyone who can pay the freight. And isn’t that the whole idea?
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If the 25-54 demo was more like a family reunion, I’m not sure expanding it like that is the answer.
My point is you can’t abandon the money demos. But with the amount of radio signals on the air today, more diversity would be in order.
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However, I have noticed that on network news and cable news, as well as N/T radio that much of the advertising (much is PI) is geared to the “boomers,” including ED, term life, et al.
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Unfortunately, most of the ads that permeate those broadcasts contribute to the perception that Boomers are a sorry lot.
I don’t live far from the only Corvette plant in the world. Their biggest customers are Boomers. (Average age of a new Corvette buyer is 59.)
Boomers are NOT the Geritol-set they are made out to be by many Millennial ad buyers.
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I happen to agree with what was written here. This brings up the question…If all this is true, why isn’t there 50s and 60s music and personality djs on radio today who appeal to baby boomers?
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That’s a great question!
And it’s one that I’m working on for next week’s blog post.
Stay tuned.
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I’d say it’s because Madison Avenue thinks you can’t sell to that demo. Look at stations that have an older audience and even with great numbers they will struggle to sell to quality advertisers because their audience is “outside the demo”.
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Perception is reality Frank. Next week I will try and show why agency perceptions are wrong and how it’s costing them and their clients sales.
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Dick, I am addicted to your wisdom. I am not in the radio business but in business nevertheless, and your thoughts are incredibly valuable to me.
You speak universal truths. So look forward to your postings!!!
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Thank You for your feedback Rick.
If you click on the “FOLLOW” button at the lower right hand corner of my blog, you will receive my newest blog post delivered via email every Sunday morning.
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There’s a fine line between super-serving a valuable demographic…and alienating the generation that follows it. Sooner or later the boomers are going to start dying off. A large amount of the content, styles, and media that works well for boomers? It’s anathema for millennials. Worse, the vice versa is also true.
And radio is facing a severe existential crisis in the form of self-driving cars. If those really are about to hit the roads en masse, then radio is about to lose the last place where it still has a significant stronghold.
If radio simply clings to boomers with the desperation of a drowning man, then we’re no different than newspapers. And our fate will inevitably be the same.
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BTW, I’m NOT convinced self-driving cars are “about to hit the roads” just yet. But there’s too much money behind the concept for them to be too far away. And losing the car is like newspapers losing the classifieds to Craigslist: utterly deadly to our business model. And the existing radio schema is so broken from self-inflicted injuries that it won’t take much disruption for things to get very ugly, very fast.
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Aaron I understand where you’re coming from, I wasn’t for a moment suggesting that EVERY radio station target boomers, but if you want to reach people with the buckaroos, you should give it serious consideration and there are many different formats that could provide some diversity to carry out this mission.
Likewise, marketers that avoid advertising on stations that reach Boomers are missing a valuable target as well.
I think we can agree on the fact that Boomers will eventually die off – LOL. But not appealing to them due to that eventuality seems, IMHO, to be jumping the gun. For these are the very people who grew up with radio. They are the people most likely to be attracted to the medium.
Radio will need to develop a new kind of content for online consumption. Just putting its broadcast online with bad filler ads isn’t the way. It competes against companies where online is the whole enchilada.
Radio is now not only the #1 frequency medium in America but also the #1 REACH medium. I wouldn’t call that “the desperation of a drowning man.”
And we also agree that self-driving cars are going to take a little while longer to get to market, but when they do, it will mean self-driving taxis, buses, and trucks. Since being a truck driver is the #1 job in virtually every state, putting these many good paying jobs out-to-pasture creates a bigger crisis than just a person being offered more options to amuse themselves while the car drives itself.
The world is going to have to re-think how we look at work in this new robotic society.
Welcome to the future.
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Aaron I concur with your oppinion, the fragmantation of media, the bland programming, the lack of innovation, the on demand digital music and news, and the biggest of them all (shareholder value) have choked radio. The sad part is none of the trends will reverse in my boomer lifetime.
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