Top Local Markets
The rankings of the Top 10 local TV markets were unchanged, but in the Top 20, the Miami-Ft. Lauderdale area moved ahead of Denver. No new markets entered the top 100, however there were several changes within the ranks. Austin, TX had the largest spike within the top 100 ranks, moving from 48 to 44.

Other notable local market changes:
There were more changes in the rankings compared to last year, yet still not as many as previous years. It was a tie for the largest increase in TV households, with Odessa-Midland and Austin, both rising four spots. The decline in the overall number of rank changes the past few years reflects overall slower household growth in the U.S. and large declines in domestic migration, particularly to Sun Belt areas. Major metropolitan areas lost less population than usual partially attributable to Baby Boomers delaying retirement plans, individuals unable to sell their homes, and/or individuals unwilling to move away from job-heavy markets. However, the recent increase in rank changes for this year seems to imply some of these phenomena are relatively short term and/or heavily contingent upon economic conditions.

Similarly, while many Florida markets had dropped in rank in the latest estimate (Tampa, Miami, Ft. Myers, Tallahassee) partially as a result of the aforementioned phenomenon, there is evidence of some “bounce back” for markets such as Miami and Tallahassee. Further, previous “high growth” markets (e.g. Las Vegas, Florida markets) which showed diminished growth or even declines in the last two estimates seemed to “stabilize” (i.e. maintain rank) for the most recent estimate. For all these markets, the decreases and/or growths do not necessarily reflect a true decline in population or households. The estimates may also reflect an adjustment to align with the most recent information from the U.S. Census Bureau.

For the first time since the Hurricane Katrina recovery period, the New Orleans market rank has declined (from 51 to 52). Though population in the market has increased, recent trends in Persons Per Household (PPH) indicate that previous PPH assumptions were too conservative (i.e. assuming fewer people per household). To better reflect contemporary population dynamics in the area, the PPH ratio was increased for the recent estimate, based on recent U.S. Census Bureau data, resulting in a smaller than usual increase in the Total Household estimate for this year which allowed the Buffalo market to pass New Orleans.

The Nielsen Company recently analyzed the demographics of Brazil, Chile, Colombia, Mexico and Puerto Rico, and estimates that people age 50+ currently make up 19% of the population.  But that number will rise to 26% by 2025 and 38% by 2050.  Households with mature housewives (who drive buying decisions in the home) account for 30% of the region’s populace.  In Puerto Rico, such households make up more than half (54%), while in Chile they represent 40%, in Colombia 35%, in Brazil 29% and 28% in Mexico.

Per Capita Spending Power
These older households – while being 13% smaller than the average home – have higher levels of per capita spending than other age groups:

• Chile: 17% higher
• Brazil: 15%
• Mexico: 15%
• Colombia:13%
• Puerto Rico: 12%

“In the next 10 to 12 years, one of every four consumers will be over age 50, and as in other countries around the world, older Latin Americans are defying the traditional stereotypes.  They are more affluent, spend more money and are open to new brands and products,” said Mary Paz Roman, Consumer Panel Services, Product Leadership Latin America at Nielsen.

Categories that currently attract a greater preference among more mature Latin Americans include hot and cold beverages, sweeteners/sugar, pet food and hair dyes and coloring, and retailers and manufacturers can expect increased popularity in years to come.  But other categories that could benefit – if manufacturers innovate and appeal specifically to this demographic – include a number of health and beauty segments such as shampoo, conditioners and deodorants.

“As competition for a greater share of consumers’ pesos, reals and dollars grows more intense, retailers and manufacturers should re-assess how they view this consumer group if they hope to seize the opportunities this new reality offers,” concluded Roman.

Dr. A.K. Pradeep, CEO of NeuroFocus, Inc.

Each year a trillion dollars is spent on communicating to and persuading the human brain, yet few understand how the brain really works—what’s attractive to it, how it decides what it likes and doesn’t like, and how it chooses to buy or not buy the infinite variety of products and services presented to it every day. Neuromarketing research is revealing a myriad of fascinating insights that help improve the effectiveness of every aspect of clients’ brands, products, packaging, in-store marketing, advertising, and entertainment content.

Synchronized Senses
Among the five senses, vision is the most pronounced and the brain will discount information that is not in concert with the visual stimuli it receives. The sense of smell is quite powerful too, as it is the most direct route to emotions and memory storage. Being linked with a pleasant, iconic smell can significantly improve a product’s success in the marketplace.

Brains are also quite empathic and it is a neural “monkey see; monkey do” mechanism that can help companies around the world create and market products and services that consumers will find naturally compelling. Mirror neuron theory says that when someone watches an action being performed, he or she performs that action in his or her own brain. Activating this mirror neuron system is one of the most effective ways to connect with consumers. Consider how watching a close partner handle a stressful conversation can cause your blood pressure to rise; how seeing a bicyclist zoom down a hill will elevate your heart rate and give you a feeling of alertness and possibly even a mirrored endorphin jolt.

Defining Differences
While human brains are remarkably similar, there are some fundamental differences such as age and gender that affect how we respond to stimuli.

The Boomer Brain: There are 44 million baby boomers in the U.S. who control 77% of all financial assets. After age 50, the brain becomes less able to screen out distractions, presenting a huge implication and a great opportunity for marketers. A key difference between the older and the younger brain involves the amygdala, the brain area devoted to primal emotions, which in young people responds to positive and negative stimuli, but in older people, more strongly to positive stimuli. Another key trait among older adults is the tendency to overlook the negative. It’s called “preferential processing,” and several studies have highlighted it. They indicate that, when presented with a negative message, older brains can “delete” the NOT and remember it as a DO over time. A real world example of how this neuroscience discovery is useful for marketers is when crafting a message for the Boomer Brain, say “Remember the milk”, not “Don’t forget the milk”.

The Female Brain: Despite the fact that women’s spending capacity has increased to a whopping $13 trillion annually worldwide—more than the GDPs of China and India combined—it has only been in the last decade that the female brain has been studied in any depth and detail. Marketers are waking up to the fact that the female brain has four times as many neurons connecting the right and left hemispheres, greatly enhancing its ability to process information through both rational and emotional filters—a fact that must not be ignored when crafting a message.

The Mommy Brain: Pregnancy and motherhood present women with the most significant changes their brains will experience in their adult lives. Importantly, those changes will last their entire lifetimes. The highly evolved Mommy Brain is largely responsible for our status at the top of the food chain, and mothers control 80-85% of all household spending. The millions of Moms across the country are an army—mobile, nimble, vigilant, in touch like never before through social media, and powerful—if your product or messages hit home with them, you have won over powerful allies who will support you through instant communication networks beyond anything you could create for yourself. But the reverse is also true.

Precise Measurement
The group of world-class neuroscientists, neurophysiologists and marketing experts at NeuroFocus measure and analyze actual brainwave activity across the full brain using a combination of electroencephalographic (EEG) testing and sophisticated eye tracking equipment that records exactly where a person is looking while experiencing a stimulus. This combination allows precise measurement of exactly how a person’s brain is responding to a certain stimulus in terms of three primary NeuroMetrics: Attention, Emotional Engagement, and Memory Retention, and correlate that with exactly where the person’s eyes are focused at that same millisecond. The results are unprecedented in depth, accuracy, and detail, and unequalled by any other form of research.

Companies around the world, including the largest and most successful global giants, are increasingly turning to EEG-based full brain neurological measurements because they offer far more accuracy, reliability, and actionable results than conventional market research methods alone such as surveys and focus groups. In the near future manufacturers, marketers, retailers and content creators that take the time to know the real consumer at the subconscious level will survive and prosper. Those that treat consumers like a number in a survey or a nameless wonder in a focus group will perish.

NeuroFocus CEO Dr. A. K. Pradeep, is the author of the forthcoming book, The Buying Brain: Secrets for Selling to the Subconscious Mind, which provides the knowledge and the tools necessary to help marketers understand how to appeal to the subconscious on a very practical level by covering the five major areas of neuromarketing practice: brand, products, packaging, in-store marketing, and advertising.

To learn more about the book and to discover how neuroscience is impacting the making, selling and buying of projects, visit NeuroFocus.com.

Born between the years 1946-1964, the oldest of the Boomers are beginning to retire. But today’s middle aged and older consumers are different than their predecessors. The conventional wisdom that they spend little, resist technology and are slow to adopt new products needs to be re-assessed. Boomers are an affluent group who adopt technology with enthusiasm (think about the number of parents or grandparents who regularly send e-mails or upload photos to Facebook and other sites). They have also shown a willingness to try new brands and products.

Boomers should matter to marketers and CPG companies because they spend 38.5% of CPG dollars. Yet it’s estimated that less than 5% of advertising dollars are currently targeted towards adults 35-64 years old (which includes the latter half of Generation X in addition to Boomers). With most marketers generally targeting 18-49 year olds, more than half of the affluent Boomer demographic is ignored entirely.

“Boomers should be as desirable for marketers as Millennials and Gen-Xers for years to come; they are the largest single group of consumers, and a valuable target audience. As the U.S. continues to age, reaching this group will continue to be critical for advertisers,” said Pat McDonough, Senior Vice President, Insights, Analysis and Policy at the Nielsen Company.

Consider these Nielsen facts about Boomers:

• Dominate 1,023 out of 1,083 consumer packaged goods categories
• Watch the most video: 9:34 hours per day
• Comprise 1/3 of all TV viewers, online users, social media users and Twitter users
• Time shift TV more than 18-24s (2:32 vs. 1:32)
• Are significantly more likely to own a DVD player
• More likely to have broadband Internet access at home

And if you think that the web sites Boomers visit are entirely different than those visited by adults age 18-34, you’d be mistaken: 8 of the top 10 web sites are the same:

At a time when most analysts are predicting much slower growth in consumer spending, manufacturers and marketers need to look at every opportunity to grow market share. Boomers can represent tremendous potential to those who know how to reach them.

Todd Hale, Senior Vice President, Consumer & Shopper Insights, Nielsen

SUMMARY: Understanding shopping and media habits at different ages can help marketers optimize critical assortment, pricing, promotion and advertising decisions by crafting targeted strategies and niche offers that reflect deal propensity, trip frequency, channel predilection, average spend and media usage.

Generation: group of contemporaries; all of the people who were born at approximately the same time, considered as a group, and especially when considered as having shared interests and attitudes.

• Greatest Generation: born prior to 1946 (64 + years of age in 2009)
• Boomers: 1946 – 1964 (45 to 63)
• Gen X: 1965 – 1976 (33 to 44)
• Millennials: 1977 – 1994 (15 to 32)

Observers of popular culture have long known that in large part, generations look alike, think alike, dress alike, vote alike, live alike, and share a similar attitude toward life and leisure activities. That theory certainly holds true for shopping. A recent Nielsen analysis of the four key generations revealed generationally consistent shopping habits that reflect diverse lifestyle preferences and economic habits.

The Greatest Generation members, shaped by the Great Depression and World War II frugality, are the most frequent shoppers and more deal prone than other age segments. High-earning Boomers have the largest annual dollar spend per household of any group, followed by GenX. Millennials don’t like to waste time in-store, shopping less often than other age cohorts but buying more per trip as a result.

Young Spenders
Millennial and Gen X shoppers favor mass supercenters and mass merchandisers over more traditional formats like grocery or drug stores which remain a draw for the Greatest Generation and Boomers. When younger shoppers do check-in to a format, they make a big impression at checkout. Millennials topped the basket value list at grocery stores and mass supercenters, with Gen X taking top spending honors at mass merchandisers and drug stores. Millennials today represent the largest population segment—over 76 million strong—just slightly larger in number than the Boomer segment. The two groups together represent half of the U.S. population.

At club, dollar and convenience/gas channels, Boomers and the Greatest Generation populate the aisles more frequently, while younger shoppers offset fewer trips with bigger baskets.

On Target
Certain store banners hold a unique appeal for the younger generations, and Target is at the head of that retailing class. Target stores have managed to maintain a hip, trendy image with a strong value message with whimsical advertising; strong, almost pop art in-store merchandising; and a roster of high profile designers for everything from housewares (Michael Graves) to bedding (Todd Oldham) to women’s fashion (Mossimo) to cosmetics (Sonia Kashuk). And, with the interest in at-home meals, Target recently announced a new partnership with TV cook show host Giada De Laurentiis for a store-brand line of specialty food items and cookware.

Gen X and Millennials both patronize Target more often than other age cohorts, but also outspend them at Target, as well as at competitive mass merchandiser banners like Kmart and Walmart.

Spending Patterns
Research suggests that owning a pet can stave off loneliness and lower blood pressure. Apparently, the Greatest Generation got the message, which may account for the average $198 in annual spending among pet food buyers in these households. An analysis of a selected sample of categories where there were big differences in annual spend across the generations showed gaps between the gaps. The next largest spending categories for seniors were wine at $124 per year and vitamins at $107 per year.

For these selected categories, Boomers spent even more on pet food ($211 per year), followed by carbonated beverages ($140/year) and wine ($125/year). Pet food also topped the list for Gen X at $148 per year, with carbonated beverages a close second among big dollar categories at $134 per year and baby food in third position at $127 annually. Millennials and their young families placed baby food in the top spot with annual outlays of $170 per household, followed by carbonated beverages ($116/year) and pet food ($112/year).

Pleasure or Pain
A Nielsen survey identified that most households (53%) have favorable attitudes toward grocery shopping while 38% consider it a chore. Retailers take note: interesting generational differences exist, which can help uncover ways to extend their time in the aisles.

It is an interesting dichotomy that the Greatest Generation is less likely to enjoy shopping than any other age cohort—with the most respondents rating shopping as a chore—and yet also the most likely to walk up and down each aisle on a shopping trip, thus extending their time in-store. Merchandising opportunities to pepper products that appeal to older consumers should be pursued.

Conversely, the Millennial generation, who makes the fewest trips to virtually any format, really likes shopping. On a typical mission, they know how to find what they need and are less likely to shop the entire store. Engaging this “in and out” shopper with products such as music or other in-store entertainment could extend their time in stores and get them to shop more aisles.

Planning and Price
Investigating an array of different consumer shopping practices and strategies, Nielsen determined that shoppers in these economic times are proving to be rational consumers with more than half relying on shopping lists and consistently comparing the unit price for a product. Other ways consumers attempt to eke value out of a shopping trip include using the store circular to identify sale items and redeeming coupons—a practice that has spiked in popularity thanks to the advent of electronic and mobile coupons.

While Gen X and Millennials claimed the highest coupon redemption rates and were among the most likely to use shopping lists for most trips, they also admitted to making the most unplanned purchases on their shopping excursions. Younger shoppers tended to bring children with them more often than others, were less likely to ask for advice from meat or produce department personnel and, in the case of Millennials, very likely to bring another adult along on most outings.

Dining and Dollars
When asked how the economic downturn had impacted meal time, more than 40% of respondents mentioned consuming fewer carry-out or home-delivered meals, or increasing the use of private label foods. One-third or more of those surveyed now incorporate more basic ingredients in meals and buy the produce that is in season, fresher and less expensive.

More than one-quarter prepare large quantities of food that can be eaten throughout the week, reduce the number of desserts served and opt to brew their own coffee at home. Nearly one-quarter mentioned serving healthier meals. The Greatest Generation and Boomers were the groups most likely to purchase seasonal produce and serve healthier meals, while Gen X and Millennials cut down on carry-outs and home delivery while stocking up on private label.

Media and meals
Consistently across the board and across the generations, people turned to cookbooks, the Internet and television for recipe ideas and less expensive in-home entertainment as budget-conserving options. Millennials were the most wired into the Internet, while Gen X favored cooking programs and the Greatest Generation paged through cookbooks.

On average, the typical American consumes more than 35 hours of media per week across the three screens—TV, Internet and mobile. As smartphones redefine customer media interaction, they present enormous potential for generating buzz around products, delivering timely product info and coupon codes, and building community through brand advocacy.

Shopportunities
So what is the best way to reach each generation and capitalize on their unique shopping interests and needs? Here are some suggestions:

Greatest Generation: freebies and senior discounts to appeal to their value orientation. Special products addressing aging issues; special packs for smaller households. Better signage, more forgiving package design, on-shelf or on-cart magnifying glasses. These savvy shoppers spend most of their online time using email and message boards, providing two ready avenues for delivering targeted offers and initiating value-add discussions about health issues and special wellness programs.

Boomers: keep these big spenders happy with monthly or quarterly cash-back savings programs that reflect spending levels. Pursue the up-sell into prescription medications, insurance, gifts for grandkids and kids, entertainment, travel, even discount wines by the case. Comprising more than one-third of the Internet population, Boomers are big online shoppers, comfortable using email and messaging to stay in touch. Twitter is a huge untapped outlet for reaching Boomers, who increased utilization 469% during 2009. Reach one and you reach their entire follower base with product info and special offers.

Gen X: time is a precious commodity for these busy young families, so reduce deadline pressure by offering meal planning and deals, school supplies and little indulgences like lattes to make shopping less onerous. Child care activity centers or computer kiosks keep kids engaged while parents shop. In-store cooking or craft classes offer family fun and a reason to increase the trip count. More than 80% of X-ers are online checking out Facebook, MySpace and Twitter, shopping and price checking online and texting or emailing friends. Deliver quick hit info and offers using new media for fast results.

Millennials: consider upgrading piped-in music to current hits to attract contemporary shoppers. Coffee stations with battery chargers and in-store WiFi let them kick back and review Internet or mobile coupons and shopping lists. Convert their need for immediate gratification into impulse buy sales with enticing end caps and front of store bins. These visually-oriented shoppers will Tweet and text about special deals real time from the store aisles about what looks good today, where to meet-up, and anything cool that catches their eye on site. If you’re lucky, you’ll hit a quirky Millennial sweet spot, and they’ll YouTube or Hulu a video of a helpful employee or unusual in-store promotion.

Doug Anderson, SVP, Research & Development, The Nielsen Company

SUMMARY: Population growth in the United States is slowing. Projections from the Nielsen Company, the Pew Research Center, and the Census Bureau all agree that year over year population growth will struggle to reach 1% for decades to come. In these projections the vast majority of population growth is slated to come from new immigrants who have yet to arrive and from children they have yet to conceive. New data show that the number of immigrants entering the U.S. has been substantially downwardly impacted by the recession. If growth from immigration remains suppressed, then the U.S. will certainly grow even more slowly, and in some near future years, may actually drop in population.

From the heights of the Baby Boom, growth rates have declined with the exception of the period from 1990 to 2000, when there was unprecedented growth among persons of Hispanic ancestry. Current 2009 and projected 2010 data show that this trend has not continued and future projections show an ever declining growth rate. However, these projections are based on assumptions about immigration and fertility rates formed before the current recession. If those assumptions are shown to be false over the long term, then the growth rates will decline even more.

The Pew Research Center projections show that 82% of all U.S. population growth from now until 2050 will come from new immigrants. Since immigrants tend to be younger and to have higher fertility rates than the native U.S. population, they account for a disproportionately large share of growth among children and families. Without a continuing influx of new immigrants at the rates projected before the recession, there will be no growth in the numbers of children and families. In fact, these key market segments will decline in absolute numbers from year to year, and will cause the U.S. population overall to age even faster than has been projected.

Declining birth rates
Birth rates have historically been impacted by tough economic times. Drops in the birth rate were recorded after the 1973–1975 and the 1980–1982 recessions in the U.S. Similar drops have been seen throughout the more developed world during periods of uncertainly about the economy. For most of the 2000s, the U.S. saw record numbers of births—a trend broken by provisional data recently released by the CDC showing a near 2% decline in 2008. Hard hit states like Florida, California, and Arizona have large drops in the number of births.

If birth rates continue to drop into 2009, the impact on long-term population growth in the U.S. could be substantial. “It is certainly too early to tell if this economic crisis will result in a sharp drop in the birth rate, but all the measures and indicators are much worse than in the 1970s”, says Carl Haub, a senior demographer for the Population Reference Bureau.

Downturn in immigration rates
Immigration also tends to slow during bad economic periods. Since new immigrants are so important to U.S. population growth, any downturn in immigration rates is a clear warning sign for long-term growth. The current recession has hit particularly hard in the Southwest, as construction—particularly of housing—has almost completely dried up. The areas and occupations most hard hit are also those with a high concentration of immigrant workers—in particular, foreign born workers from Mexico. The unemployment rate for both native-born and foreign-born Hispanics in the U.S. increased 45% faster from the fourth quarter of 2007 to the fourth quarter of 2008 than did the rate for all workers.

A drop in Mexican immigration
Failing job prospects have had a dampening effect on the movement of workers from Mexico to the U.S., according to a recent report issued by the Pew Hispanic Center and several other sources. Since Mexico is the largest source for immigrants entering the U.S. by a big margin, a downturn will have a strong impact on population growth driven by new immigrants. Since many Mexican workers are unauthorized to enter the U.S., tracking this population using standard government data sources is difficult. However, the preponderance of evidence shows a clear fall in the number of Mexican immigrants—particularly unauthorized ones.

• Data from the Mexican government (ENOE) shows a strong decline in the numbers of persons leaving Mexico: from 547,000 for the year ending February of 2007, to 374,000 for the same period ending in 2008, and 203,000 for 2009. Since the U.S. is the primary destination for Mexicans who leave their country, the 63% decline from 2007 to 2009 should have a similar impact in the U.S.
• Data from the U.S. Census Bureau’s Current Population Survey estimates there were 175,000 immigrants from Mexico in the period from March 2008 to March 2009—lower than any other year in the 2000s, and nearly 37% lower than the average year from 2002 to 2008.
• Data from the Department of Homeland Security (Border Patrol) show a strong decline in the number of persons trying to enter the U.S. illegally—the lowest level since 1973. The 2008 rate was 40% lower than in 2004. Recent higher levels of border enforcement may also discourage people from trying to cross at all. A more difficult crossing plus the difficulty in finding work due to the recession are both clearing slowing unauthorized immigration.

Additionally, an analysis of government data by the Associated Press shows a huge decline in the number of green card applications over the past two years. The government has received about half as many employer sponsored applications in 2008 and 2009 than in previous years. As firms have shed jobs throughout the recession, it has become easier to find citizens who have the specialized skills that, in the past, might have justified sponsoring an immigrant for a green card.  This is likely an early indicator that immigration from India, China, and other countries, who have supplied highly skilled workers to the U.S. market, may also begin to fall.

Clear warning sign for long-term growth
If immigration continues to remain suppressed and fertility rates continue to fall (and note that there is a clear connection between the two as immigrants tend to have much higher fertility rates than the native population), then the demographic outlook for the U.S. could begin to shift.

• Population growth rates, already projected to be at historic lows, will fall lower. Many countries in the more developed world expect to see population declines owing to aging populations and low fertility rates over the coming decades. Without new immigrants and the children they will have, the U.S. could see little or no population growth in the near future.
• New, young immigrants both increase the share of the population that is younger, and of course often have children themselves. Fewer immigrants will accelerate the aging of the U.S. population and exacerbate the economic strains that will come from paying for Social Security and Medicare/caid.
• Fewer immigrants also mean slowing growth in ethnic populations (Hispanics, Asians, etc.) in the U.S.
• Finally, the share of households with children—already projected to decline to below 30% over the coming decades—will fall more rapidly and to lower levels.

It may be too early to call an end to the current recession in the U.S., but many economic indicators suggest a corner may have been turned. The stock markets have recovered some of their losses, the rate of increase in unemployment has slowed, and even the housing market has begun to show some signs of life. It will take at least another year or two of government data to determine if immigration and fertility rates remain below recent levels. If both fail to recover, the impacts to the U.S. marketplace—both in terms of growth and composition—will be substantial.

Sources:

• Centers for Disease Control and Prevention—National Vital Statistics Report Volume 57 Number 19—Births, Marriages, Divorces, and Deaths:  Provisional Data for 2008
• Pew Hispanic Center—Mexican Immigrants: How Many Come?  How Many Leave? (July 22, 2009)
• Pew Hispanic Center—Unemployment Rises Sharply Among Latino Immigrants in 2008 (February 12, 2009)
• Population Reference Bureau—Will the Economic Downturn Lower Birth Rates? (January 8, 2009)
• U.S. Census Current Population Survey—tabulations by the Pew Hispanic Center
• Instituto Nacional de Estadistica y Geografia (INEGI)—Encuesta Nacional de Ocupacion y Empleo (National Survey of Occupation and Employment – ENOE)
• The Nielsen Company—Population and Household Projections
• The Nielsen Company—The Low Income Consumer in Mexico
• MSNBC / Associated Press—Petitions for U.S. Worker Green Cards Plunge (August 6, 2009 / www.msnbc.com)

SUMMARY: A likely future for the U.S. in the year 2020 and beyond is a country split between the aging Baby Boom still with substantial political, economic, and social power, and a young, fast-growing multi-cultural population with far less political and economic clout. Beyond the clear demographic trends, the starting points for this divide can be seen in the growing generation gap that can be measured in the attitudes and behavior of Americans today.

In 1969, a Gallup poll found 74% of Americans thought there was a generation gap. That gap manifested itself throughout U.S. society in the social and political upheavals of the 1960s and early 1970s. Things

settled after that and 10 years later in a CBS/New York Times poll, only 60% saw a generation gap. Today, 30 years on, a Pew Research Center poll finds that 79% of Americans think there is a generation gap. While the 1969 gap was driven by widely varying points of view between younger and older Americans about the war in Vietnam, race relations, and women’s rights, today’s gap is centered around a different set of issues.

The Pew poll finds that Americans of all ages believe that differences in values make up most of the generation gap. Differences in morality, ethics, politics and beliefs/religion are frequently mentioned by younger people, while older folks are much more likely to say there are big differences around a sense of entitlement—that younger people want everything handed to them. Interestingly, only 8% of 18–29 year-olds and 5% of all other ages, mention differing levels of reliance on technology as being divisive, despite the fact that adoption and use of technology wildly varies across generations.

You’re old when…
Did you ever wonder what life would be like when you grow old? While the perception of “old” varies by age group—18–29 year olds think you’re old when you turn 60!—the generation gap of 2009 is focused primarily on the ability of younger persons to understand the large group of aging Baby Boomers.

Younger people exaggerate both the challenges of growing old and the benefits. For example, 57% of younger persons expect to have some memory loss after the age of 65, while only 25% of those aged 65+ actually experience memory loss. Likewise, 87% of 18–64 year olds feel that older people have more time for hobbies and other interests, while only 65% of persons over the age of 65 actually find that extra time in their lives.

Secular states
Religion plays a more central role in people’s lives as they age—and is a clear dividing issue between younger and older Americans today. Less than half of those aged 18–29 (44%) say religion is an important part of their lives, but that percentage escalates by about 10 points with each increasing age increment—54% of 30–49 year olds agree, 61% of those aged 50–74 feel the same, and 70% of persons 75+ believe.

Similar patterns of church attendance can be seen in the Catholic faith. Many younger Catholics consider religion important, but attendance at Mass falls off substantially compared to older persons. There is, however, a slight increase in weekly Mass attendance for Millennials born after 1981 compared to those born between 1961 and 1981. Around one-third of U.S. Catholics are Hispanic, with many of them concentrated in the younger ages—the up-tick may be due to the influx of younger Hispanics into the church.

The gloom of the boom
For three decades, data from the General Social Survey, conducted by the National Opinion Research Center at the University of Chicago, have shown the Baby Boom generation to have experienced less happiness than other age cohorts—new data from Pew show this is still the case. Their consistent gloomy attitudes have separated them from both preceding and subsequent generations of Americans.

Baby Boomer’s rate their overall quality of life lower than other age cohorts—they worry that incomes won’t keep up with inflation, that it is harder to get ahead today than it was 10 years ago, and that their standards of living don’t exceed that of their parents at the same age. Fewer Boomers expect to be able to live comfortably in retirement than members of other age cohorts.

These findings are surprising considering the fact that Boomers have the highest incomes of any age cohort, the highest home values, and the highest net worth. In today’s recession, however, they also have the most to lose and have been hit the hardest by the collapse of the housing and equity markets. Many are financially stretched still supporting children, their parents, or both.

Why are the Boomers the gloomiest generation? One possible explanation is supported by published sociologist, Yang Yang. Her work suggests that the roots of the issue may lie in the size of the Baby Boom generation. Because of the unexpectedly large size of their cohort, Baby Boomers have had to compete with each other for admission to schools, for jobs, etc., and this added level of competition has increased the level of stress in their lives and lowered their overall levels of happiness.

Technology and media
Whether young people feel it differentiates them from older persons or not, adoption of technology and use of both traditional and new media varies substantially between older Americans and new emerging youth

markets.

Average monthly television viewing time varies strongly by age. Although younger persons still watch a substantial amount of television—over 150 hours per month for persons age 25–34—their viewing is dwarfed by that of older viewers. Persons over the age of 65 watch 38% more TV hours per month than those aged 25–34.

While time-shifted television programming via a DVR accounts for a relatively small share of viewing, the highest levels of adoption are among 25–44 year olds, who watch time-shifted programming 24% more than 45–64 year olds and over four times more than persons aged 65+.

The Internet is a more ubiquitous medium with persons over the age of 35—averaging more than 40 minutes a day from home. Younger persons spend somewhat lower amounts of time online from home in an average day, but are the strongest adopters of other forms of technology—such as the mobile telephone. In 2008, the average teenager sent or received over 35,000 text messages a year—about one message every 15 minutes, 24 hours a day, 365 days a year. That’s 163 times more than the average person aged 65+.

Young persons are also much more likely to have abandoned their land lines in favor of an all mobile life. The chart below shows the distribution of persons by age based on how they make use of land and mobile telephone lines.

The U.S. in 2020 will be a very different marketplace from 2009, and the roots of that change are everywhere. The aging of the Baby Boom is inevitable. And in much the same way as they have redefined what it means to be young and to be middle aged, they will also redefine what it means to be old.

Other demographic trends that will shape the future are also present today—growth in Hispanic and Asian populations, with the highest shares among younger people, and falling fertility rates and falling family sizes. Beyond demographics, the gap between the generations, while clearly defined in differing usage of media and technology, has deeper roots too—in values, outlooks, and political perspectives.

Sources:
Center for Applied Research in the Apostolate (Frequently Requested Catholic Church Statistics) – Georgetown University

Baby Boomers: The Gloomiest Generation (Pew Research Center – Pew Social & Demographic Trends Project June 25, 2008)

Yang Yang—Social Inequalities in Happiness in the United States, 1972-2004: An Age-Period-Cohort Analysis—American Sociological Review April 2009

Growing Old in America: Expectations vs. Reality (Pew Research Center—Social & Demographic Trends Report June 29, 2009)

How Teens Use Media —The Nielsen Company, June 2009

A2/M2 Three Screen Report—The Nielsen Company, 1st Quarter 2009

SUMMARY: Nearly 39% of U.S. households—some 44 million—are headed by a Baby Boomer. Nearly 77 million Americans fall into the cohort born between 1946 and 1964. In a couple of years, that generation will begin to reach the traditional retirement age. Given all that has happened in the economy in the last eighteen months, will they be able to afford to retire?

Some of the parents and almost all of the grandparents of the post World War II Baby Boom lived through the Great Depression. Many, if not most, Baby Boomers grew up with their stories of hard times. And while those stories were always in the back of their minds, most Baby Boomers came of age in a world so full of promise that the idea of hard times coming to their front door was simply not conceivable. Sure, the earliest Boomers struggled along with everyone else during the recession of the early 1970s, but they were young enough to recover, and the great wealth creation decades of the 1980s and 1990s gave them a sense of invincibility.

The worst possible time
Today, many Boomers are feeling far from invincible. The drop in the housing market has removed three trillion dollars in home equity from the pockets of Americans. On average, that is nearly $40,000 in lost equity for each U.S. homeowner. Since Boomers have the highest rates of home ownership as well as the highest home values, they have lost much more than the average. Likewise, the current economic downturn has taken $11 trillion dollars in stock market wealth away. That’s nearly $100,000 in lost assets for every household in the country. And since Boomers are much more likely to have their money tied up in stocks, they have suffered a disproportionately large share of the losses—for many, at the worst possible time.

Unemployment, traditionally the bane of younger and more downscale workers and not something that strongly impacts those at the peak of their careers, has over the second half of 2008 and into 2009 begun to hit the Baby Boom hard. The rate of increase of unemployment nearly doubled for those aged 45-54 in the second half of 2008 versus the first, and increased far faster for those over 55. In past years, most older and longer tenured workers who lost jobs from downsizing could rely on early retirement packages and other benefits from their former employers. Today, those packages are going away as companies seek to cut headcount without incurring substantial severance charges.

Time is not on their side
Assuming a retirement age of 66, the oldest Boomers have only three years left to recoup lost money they took decades to save. The collapsing stock and real estate markets of 2008 alone wiped out four years of gains in the net worth of Americans, and 2009 has taken more. The youngest cohorts of the Baby Boom may still have time to recover, assuming a substantial long-term upswing in the economy, which is by no means guaranteed, but for the oldest Boomers, time may have run out.

New economic difficulties
Even without this current economic downturn, the U.S. economy would be on the verge of some serious difficulties caused by the aging and retirement of the Baby Boom. The Baby Boom is still the largest generation of Americans and their removal from the labor force and the costs of paying for their support—particularly for healthcare—over the next several decades will place enormous stress on the U.S economy.

Starting now, and continuing for more than 25 years, the number of persons who reach the retirement age of 66 each year will substantially outnumber the number of persons who turn 19 and are entering the labor force. In fact, beginning in a couple of years, shrinking generation sizes will mean that the number of persons who reach the age of 19 is smaller each year than the year before. The number of 19 year olds will continue to shrink until at least 2019. During that period, millions of Baby Boomers will retire and leave the labor force, lowering economic productivity.

The well is drying up
The real burden of the Baby Boom on the economy will be in paying for pensions and healthcare. Projections from the Office of Management and Budget (OMB) show that Social Security will have a shortfall by 2017—only about six years into the retirement phase of the Boomers—with the majority still to come. The fund remains solvent for much longer though, all the way out to 2041, when the reserve trust fund runs out. At that point, with current standards of funding and payments, money coming into the Social Security system from payroll deductions will cover only about 70% of the cost of benefits.

Medicare and Medicaid, however, are much different stories. Because they are much younger programs, neither has as large a reserve fund as Social Security. And even though the cost of living has been going up steadily, the costs of healthcare have gone up much, much more. Medicare will require incremental sources of funding by 2019 when the Boomers have 12 more years to retire, and much longer to live.

The golden years?
As many as 60% of persons living beyond the age of 65 will need some form of long-term care, either at home, in a nursing home, or in an assisted living facility. Costs for a year of care average $57,000 today (much higher in metro areas), and are increasing faster than the rate of inflation, and are expected to be around $100,000 in the middle of the Baby Boom retirement years. Since few Boomers have long-term care insurance—and Medicaid coverage is only for the very poor—paying for long-term care will quickly deplete the savings of many households.

Empty nest syndrome delayed
Nearly two-thirds of the very youngest Boomers still have children under the age of 24 living at home. And nearly 20% will still have children under the age of 25 for at least ten more years. And while the children of the Baby Boom will be the best educated generation of Americans ever, getting them out on their own is taking longer—the age of 24 has become the new 18. Expect to see more multi-generational households as the parents of Boomers live longer and need more support. Many Boomers may have full households at the time when earlier generations were living on their own.

On the other hand, nearly one-quarter of all Boomer households today are single adults living alone. This grows to nearly one-third for the oldest Boomers, and will increase rapidly as the generation ages. The share of those singles who are women will also grow rapidly as the longevity advantage that women have over men plays out. Over the next decade, two new types of Boomer households will emerge, elderly Boomers caring for their parents, and single Boomers—predominantly female in the older ages—living alone. New household structures may also emerge with more unrelated individuals living together, as Boomers band together to share costs and company.

Financial assets of the Baby Boom
In terms of income, the Baby Boom is at the top of the chart. Boomers are in their peak earning years with a median income of nearly $64,000—much higher than either the generations who came before (median of $32,000) or those who followed (median of $50,000). The Baby Boom is above average for all income ranges in excess of $65,000 and peaks at the very top.

Click to image to enlarge.

However, the Baby Boomers have not been particularly good savers. The table below shows the average market value of all financial assets excluding real estate based on the 2006 Consumer Expenditure Survey (i.e., before the recent economic downturn).

While older Boomers have certainly saved the most, they also have a higher share of their assets in securities—over 70% for the two groups closest to retirement versus around 60% for those farther away—and would have been hit by the current stock market woes more heavily.  The younger Boomers are saving more, averaging over $7,000 per year going into insurance and pensions versus only $4,200 for those closest to retirement.

Real estate makes up a disproportionate share of the net worth of most households, but years of moving for jobs and trading up in competitive housing markets as well as taking equity out for home improvements or college funds have placed the Boomers in the position of still paying for their homes at ages when their parents were long done. More Boomers rent (24%) than own their home free and clear (17%). Those who own their home outright increase with age, but around 45% of households with a head aged 63 or 64 still owe at least something on the mortgage for their primary residence.

Can the Baby Boom afford to retire?

While some can, the majority will struggle and have to make substantial compromises to the plans they once had. Some smaller, but still significant share, will simply have to continue to work in whatever jobs they can find for as long as they can, or else take very large cuts to their standard of living. Those fortunate enough to have sufficient insurance coverage will be able to weather most of the healthcare issues they may face, while those without coverage will see their nest eggs quickly diminish. Many will end up relying on Medicaid and other government programs.

Over the next several decades, many of the service jobs once held by teens and younger workers will be held by older ones. As the number of younger people continues to fall, there will be many older workers ready to take their places. Marketers will be required to rethink their portfolios to ensure they have products able to meet the needs of an ever growing numbers of older Americans. The key question that only time will answer is this: Even if marketers can restructure portfolios to meet the needs of the changing U.S. population, will there be enough consumers who can afford what there is to sell?

Sources:

Alzheimer’s Association—2009 Alzheimer’s Disease Facts and Figures
Bureau of Labor Statistics—2006 Consumer Expenditure Survey
Census Bureau—2007 American Community Survey
The Nielsen Company
The Washington Post—Stocks soar, but dismal signs remain (March 3, 2009)
MSNBC—Boomers face stark choices in bleak economy (March 11, 2009)

More proof that Boomers should be looked at by advertisers is Nielsen research from January which shows baby boomer households represented more than 50% of sales in 98 of 122 consumer packaged goods (CPG) product categories analyzed in a recent report by Nielsen and the Hallmark Channel.  That adds up to almost $200 billion in total sales in those categories.

In the New York Times today, Nielsen’s Howard Shimmel said, “Especially in this economy, with marketers’ budgets under so much stress, advertisers would prefer to spend dollars on today’s sales instead of thinking about establishing brand loyalty.”

Read the full article in the New York Times.

Doug Anderson, SVP, Research & Development, The Nielsen Company

SUMMARY: People in the U.S. move for a wide range of reasons, but typically they seek out places that provide them with opportunities—economic opportunities most often. But, mobility is on the decline, and not just because of the ongoing economic downturn. Moving rates have been dropping for the past several decades, driven by long-term demographic trends.

The percent of the U.S. population who move has declined every year since the late 1960s (with the exception of a few years, in the mid 1980s). Prior to that, nearly 20% of the population moved every year. That rate fell below 15% in 2000 and is now at an all time low—11.9% in 2007, which represents a 40% decline in the moving rate versus the average year between 1947 and 1969. Since people tend to move to areas of growth, which reinforces and strengthens economic development, this decline has consequences.

As the population of the country continues gets older—and older people are less likely to move—there will be further braking effects on mobility. In addition, the growing incidence of two worker couples impedes mobility. And while the current economic downturn is certainly slowing mobility, it does not explain the longer term trend. However, as the Baby Boomers start to retire in earnest beginning in the next five years, mobility rates could increase as they decide where to spend their golden years.

Local economic impact
Markets with large population increases since 2000 show the highest rates of moving. High-growth markets not only see new households coming in, but they also have higher rates of local moving in the existing population. New migrants tend to bid up housing prices, making it more attractive for current owners to look to move up in the market. At the same time, existing owners with increasing home equity spur local economies by funding home improvement projects such as new kitchens or bathrooms.

However, when migration begins to decline, those local economic boons start to go away. Housing prices tend to remain stable—or even decline as has been seen in many markets over the past year. Less growth in home equity means that homeowners put off renovations that provide work for local contractors and sustain local economies.

Who is moving?
The profile of those who move has changed dramatically since 1990. Comparing the distribution of movers in the 1990 Census to the 2007 American Community Survey data (from the Census Bureau), there are several substantial differences:

• In 1990, college-educated people were more likely to move than those with high school or lower levels of educational attainment. By 2007, education was a much less powerful predictor of mobility, and, in fact, those with graduate or professional degrees were the least likely to have moved. As manufacturing jobs have declined, more blue-collar workers have been forced to move seeking new employment elsewhere.

• Blacks are much more likely to be movers in 2007 than in 1990. Hispanics also have a higher moving rate. Non-Hispanics whites have declining moving rates.

• Households with a head in the 35-44 age range are still the most like to move, as they were in 1990. This likely reflects the loss of middle class jobs over the past several years. The concentration of movers in both the 35-44 and 45-54 age ranges has increased, while among those aged 55+, the concentration of movers has decreased.

• While income wasn’t a very good predictor of mobility in 1990, it was a strong determiner in 2007. Households in the $20-50k ranges were much more likely to have moved in 2007 than the national average, while the lower-income ranges saw the concentration of movers fall by more than half.

Why people move
According to the Pew survey, most people move for their job or business. Moving to a good place to raise children or for family ties are also frequently cited reasons. However, moving for family ties may be on the decline.

One of the often overlooked impacts of the aging U.S. population and its declining family sizes has to do with family ties. As families get smaller, children will have fewer brothers, sisters, and cousins. As this trend continues across generations, they will also have fewer aunts and uncles. Over time, this means that one day the majority of living Americans will have few or no living biological relatives. In countries like Italy—which are much further down the aging population/declining family size curves than the U.S. —fully 60% of children today have no biological relatives other than parents, grandparents, and great grandparents. As these children become adults, they will gradually lose them too.

This trend could increase rates of moving, particularly for reasons that are less important today, such as cost-of-living or climate. In addition, as the Baby Boom ages, they may also increase the number of moves made for cost-of-living, climate, or recreational activities.

States of attraction
There are fifteen states in which the majority of the current population was born outside the state. For these states that attract movers, expect to see a wider range of tastes and product preferences, influenced by shoppers from across the U.S.  And as the Baby Boom retires, these ‘magnet’ states will see even greater diversity within their populations—posing challenges to retailers who will need to stock more products that appeal to regional tastes from outside their own region.

There are eleven states in which more than 66% of the people born there never left. Pew calls these ‘sticky’ states because their native born residents tend to stay at home. Florida is the only state to appear in both lists—a state where people born there don’t want to leave, and many others want to come.

The future of mobility
Moving rates in the U.S. have tracked perhaps more closely with family size and the percent of households with children than with any other factor. The peak years of the Baby Boom—when nearly half of all households had children—were also the peak mobility years. As the share of households with children has declined, so has the moving rate. With fewer children, the need for larger homes has declined, pushing down the local (intra-county) moving rate in particular. Since the share of households who have children will continue to decline and will stay low for decades to come, there will be a continuing downward tug on mobility.

The current economic downturn will certainly slow moving rates among parts of the population. However, as the unemployment rate continues to rise, many workers may move in search of new opportunities. This will have advantageous impacts on markets receiving those workers, but will have doubly disadvantageous impacts on the markets that lose them. High rates of unemployment adversely impact sales of consumer products, but must-have staples still get purchased. And when workers leave, even those purchases are removed from the market.

Sources:

U.S. Census Bureau Current Population SurveyU.S. Census Bureau American Community Survey
Pew Research Center – American Mobility:  Who Moves?  Who Stays Put?  Where’s Home? (12/29/2008)