When you read about businesses realizing impressive “returns on investment”, it’ll be difficult to find anything beating car maker’s marketing to Baby Boomers. A recent study from JD Power and Associates confirms this, and also provides evidence that the younger generation (those pesky Millennials) are harder than ever to convince of the merits of car ownership.
Car companies devote a mere 10 percent of their marketing budgets to the Baby Boomer demographic. In return for this not-quite advertising generosity, people over 50 (those eligible for AARP!) buy almost two-thirds of new cars. That means 90 percent of advertising dollars are responsible for only one-third of new car purchases.
What’s happening here?
Baby Boomers have more money than Millennials, but they’re also purchasing the cars that were supposed to be for the kids. In 2011, 51 percent of Ford Fiestas and 62 percent of Ford Focuses were scooped up by Boomers, along with 64 percent of Chevrolet Cruzes. A little bit of the old quest for the eternal flame of youth.
But that’s only part of it; the change in the auto-buying demographic over the last decade is significant based on its speed and shift.
In 2001, 24 percent of new car buyers were between 18 and 34. Last year, only 13 percent of new car purchases came from the young and upwardly mobile, preferring to spend more of their disposable incomes on smaller-ticket purchases.
Does this mean it’s wise for car companies to change their advertising and marketing strategies? I’d say no. The auto industry is healthy now, and while Millennials place more importance on digital devices than cars, it’s not like the iPhone’s about to sprout four wheels. (But I wouldn’t count it out…) Point being that this demographic will still need to buy cars, even if takes longer than tradition suggests. And as long as it’s hip to be young and spry and flashy and snippy, Ford and Chevy should market their cars as such.
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