Following the acquisition of Reader's Digest last week by venture capitalist Mike Luckwell, Grant Feller, media consultant and director of GF-Media, explores why the "frisky" over-50s market has been ignored by an industry obsessed with a lust for youth.
Of the two most fascinating media deals of last week, I’m more interested in the "frisky" rather than the risky one. The risky is of course Facebook’s astonishing $19bn Whatsapp deal to re-engage with the youth market that it has gradually been losing over the past few years.
The frisky one – Mike Luckwell’s purchase of ailing Reader’s Digest for £1 - is very much focused on the other end of the spectrum.
My 78-year-old mother would be horrified to be thought of as frisky, while my friend Monica who quietly mourned her sexagenarian milestone the other week is as frisky as they come
Frisky is the word he used to describe the new audience he craves and who he believes have been ignored by marketers and their brands. My 78-year-old mother would be horrified to be thought of as such, likewise my mother-in-law who is almost a decade younger.
On the other hand, my friend Monica who quietly mourned her sexagenarian milestone the other week is as frisky as they come. Liberated by divorce, dating with abandon and with a zest for life that mirrors her 30s.
And then there’s my tough-tackling frisky football teammate Wilf, the oldest of our Saturday morning kickabout (numbers steadily decreasing through injury and wilful neglect) yet the youngest in outlook – dragging his family off to far-flung corners of the world in search of adventure, first in line at the Royal Court and endlessly probing teammates for the latest celebrity gossip.
So which of them will want to engage with the 76-year-old Reader’s Digest, whose readership has dipped alarmingly below 200,000?
"Over-50s have a very different life than they did 20 years ago," Luckwell said. "People over 65 are jumping out of aeroplanes now, it’s a younger type of audience with a ridiculously high proportion of the wealth and only 10% of advertising."
The digital actives
That’s not the only startling figure. For instance, last year, according to the Office of National Statistics, over 50s accounted for 47% of household expenditure. More than 35% of the UK is over 50 and they hold 80% of the wealth.
Which niche lifestyle magazines are tailored to satisfying this enormous audience’s needs and desires? Saga, Reader’s Digest and a couple of women’s weeklies, all of them expertly produced and full of interesting material - but, well, frisky they aint.
And what of the arguably more important digital market? A statistic I discovered on the Kantar Media website is astonishing: 80% of 55-64 year-olds have internet access but only 4% of those people think brands meet their needs on the web. And the three brands that they feel do "reach out" to them are Amazon, Skype and Google.
It’s a pretty dispiriting state of affairs and no wonder Luckwell – whose instinct for what the public wants, whether it’s health clubs or Bob The Builder, is highly attuned – thinks there’s a profitable gap in the market.
Forget fickle 'digital natives', there’s an enormous and ignored 'digital active' audience out there - time-rich and cash-rich, waiting to be entertained and sold to
Of course there is when 43% of 55-74 year-olds (about 9m people) are internet users and they are, for instance, the fastest-growing demographic to join Facebook. Incidentally, in America at least, more over-55s (17%) use tablets than 16-24 year-olds (14%).
Forget fickle "digital natives", there’s an enormous and ignored "digital active" audience out there, time-rich and cash-rich, waiting to be entertained and sold to. So why is there such a dearth of interesting targeted material?
Yes, there are newspapers, yet they’re engaged in a chimeric quest to hold on to their traditionally most loyal audience while trying to appeal to their children and grandchildren at the same time.
And one or two websites, such as the increasingly confident High50, are defiantly plugging the "frisky gap". But then it’s a short hop to Gransnet and Age Concern and, well, even Reader’s Digest - whose most read article last week (next to pruning roses and making your own curtains) was about belching caused by dentures.
The over 50s should be an advertiser’s nirvana
If you type "Pink Pound" into Wikipedia, you’re directed to a page with the expected plethora of subsections looking at the nifty phrase’s meaning, history and cultural impact, along with plenty of other links to articles written by both gay and non-gay commentators on the importance of this consumer sub-section.
Now type in "Grey Pound". That entry has two utterly pointless sentences. And one of those is about the "Pink Pound".
As much as anything, that reveals just how little importance we attach to probably the biggest, richest, most adventurous and influential single consumer group we have today. People over 50 should be an advertiser’s nirvana. Yet they are ignored in our lust for youth.
The vibrant London media scene is now controlled by the very people who, 20 or 30 years ago, were the targets and creators of this youth obsession.
The vibrant London media scene is now controlled by the very people who, 20 years ago, were the targets and creators of this youth obsession. Now they are in their 50s buying boxsets instead of slippers
Now they are in their 50s and instead of buying slippers, smoking pipes and going on cruises, they’re buying boxsets and boutique whiskies, spending a fortune on luxury holidays and engaging in evermore ridiculously immature and sweaty weekend pursuits designed to show the world that they’re still young.
And they are still young – the entire 50-70 market is still young – because age is meaningless now. It is a label that doesn’t match the clothes. It used to be a part of one’s identity. Today, it’s what holds people back. Yet the reluctance (fear?) of appealing to this audience, instead of younger generations, seems to be holding this lucrative market back.
In a recent KPMG analysis of shopping habits, Vicky Redwood, chief UK economist at Capital Economics, put it like this: "By 2030, the number aged 65 or older is projected to reach 15.5m, growing 43% on its level in 2012, compared to an expansion of only 13% in the population as a whole. While this group currently accounts for less than £1 in every £5 of total spending, this share might rise to £1 in every £4 within two decades."
The conclusion, according to KPMG, is that "the rising influence of this group could see sales shift towards the categories and methods of shopping that they favour. Health, DIY and home maintenance retailers, which attract a large share of elderly households’ budgets, should benefit from this change, whereas retailers selling clothing, beer and soft drinks, which are geared towards a more youthful market, could lose out".
Can Luckwell fix it?
Neil Saunders, managing director of retail analysts Conlumino, in the same report, added: "The baby boomer generation has no intention of retiring quietly to a life of crochet and gentle gardening. They are down-ageing: acting younger, both physically and mentally. Understanding this is important because it’s this older segment that’s going to drive retail over the next 10 years."
Perhaps Luckwell will be able to consign the tired, patronising notion of "grey pound" to history and capitalise on this incredibly vibrant and rich seam of society – richer perhaps than that currently obsessed by the so-far-unprofitable Whatsapp.
It’s a growing portion of the market that, in terms of content, is close to broken. Instead of sneeringly doubting whether he can "fix it", Medialand’s frisky fraternity should echo the mantra of the tycoon’s most famous creation and hope that "Yes he can".
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