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You’re getting old
EUROPE’S DEMOGRAPHIC PROBLEM IS YOUR MARKETING PROBLEM

Young & Rubicam
Europe, Middle East and Africa

You’re Getting Old

by Simon Silvester
Executive Planning Director simon_silvester@uk.yr.com

EUROPE, MIDDLE EAST AND AFRICA GREATER LONDON HOUSE, HAMPSTEAD ROAD, LONDON NW1 7QP TEL: +44 20 7611 6000 FAX: +44 20 7611 6074

Young & Rubicam

YOU’RE GETTING OLDYou’re getting old
For years marketing consultancies and advertising agencies have been researching and analysing consumers in the 55-plus age bracket. The interest is timely. Numbers of these people, the so-called Greys, are growing rapidly in all European countries. And as their numbers grow, so does their spending power. But all the interest in older people obscures a much bigger issue. Thepopulation of Europe is static. And as numbers of older people grow, numbers of young adults in European countries are falling rapidly. Consumer goods companies have built their fortunes over the past fifty years by appealing to the tastes and needs of these young adults. Convenience foods, foam cleansers and aerosol deodorants - all would have failed as new product categories without thebubbling enthusiasm of young adults for all things new. The decline in their numbers is long term. It is not about to reverse any time soon. The ageing of Europe is not just a crisis for governments, but for consumer goods companies too.

No one has ever lived in a society as old as twenty-first century Europe. No one has ever tried to sell things to such a society either.

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YOUNG & RUBICAMYOU’RE GETTING OLD

Why there’s a problem
The numbers no longer work It’s always been easier to persuade someone with no existing loyalties to try a brand, than it has been to persuade someone with entrenched loyalties for a competitor. For this reason, people entering a market for the first time have always been amongst marketing’s primary prospects. • In Germany, 72% of bank customers neverchange their bank. Which means the only way to attract them in large numbers is to do so when they open their first account. • Once a woman is happy with her brand of sanitary protection, she is likely to remain brand loyal for life. So most marketing for sanitary protection is targeted at women in their teens. • Young women who drank rum and cola in bars in 1985 today drink rum and cola in front ofthe TV at 40 . Therefore most drinks marketing targets young adults. Talking to people as they take their first adult steps is effective marketing. The fortunes of consumer goods companies have thus relied upon large numbers of young people reaching adulthood each year. The problem is though, that the proportion of Europeans who reach adulthood each year has been falling for decades.

Back inthe 1960s Italian 20 year Back in the 1960s, when Europe was a young conold population tinent, almost 3.5% of all European adults were ‘new’ 20 year olds coming of age each year. millions 1.0 Put another way, each year 3.5% of women buying all-adult products like washing powders, toilet 0.8 paper or bread were deciding what brand to buy for the very first time. 0.6 Run a spectacularly effectivemarketing campaign at these new young women, and you would cap0.4 ture 3.5% of all adults. Run it for three years and you would have over 10% of all adults. 0.2 Furthermore, most of these young 1960s women 0.0 were dead set on two things: early marriage, and 1992 1995 2000 2005 2010 as many as three children. Numbers of 20 year olds Which means that many of them would soon be in Europe are in steepbuying food and household products for as many as decline five mouths. So whilst you picked up 10% of users, you soon ended up with perhaps a quarter of your market’s volume. Magical calculations like these were what made consumer goods companies’ fortunes in the last century. Not today though Today, with a huge bulge of European adults in their late thirties, and numbers of older adults surging,...