Boomers -- Yes, Boomers -- Spend the Most on Tech

Nice piece from Adage revealing the real age of the technophiles amongst us

Due to Broad Demographic Grouping Problems, Biggest Misconception About Group Is That They're All the Same

by Beth Snyder Bulik
Published: October 11, 2010

YORK, Pa. (AdAge.com) -- Marilynn Mobley has a desktop at work, a laptop at home, a netbook for travel, an Android smartphone and just last week she bought an iPad. She time shifts all her TV viewing using DVRs and enjoys watching Blu-ray movies at home. She's also 63 years old.

Tech Use

"The misconception that boomers do not appreciate tech crosses all generations. I've heard it from fellow baby boomers who say, 'Wow, you're so into technology,' and on down to 20-year-olds who are also surprised," said Ms. Mobley, a strategic counselor for Edelman in its Boomer Insights Generation Group.

However, she's not nearly as unusual as the media portrays. Boomers are almost as likely as Gen X and Gen Y to own computers, access the internet daily, own mobile phones, DVRs, digital cameras and GPS systems. And while boomers do trail in areas such as early adoption of new devices and services, many of those generation gaps are closing.

"It's actually a myth that baby boomers aren't into technology. They represent 25% of the population, but they consume 40% [in total dollars spent] of it," said Patricia McDonough, senior VP-analysis at Nielsen Co.

In fact, spending on technology is one area where boomers are ahead of their younger counterparts. The 46- to 64-year-old group now spends more money on technology than any other demographic, according to Forrester Research's annual benchmark tech study. That includes monthly telecom fees, gadget and device spending, and overall online purchases. They averaged around $650 spent in online shopping vs. Gen X ($581) and Gen Y ($429) over a three-month period.

And adoption rates of the tech areas where they do lag are soaring. In 2000, baby boomers made up 28% of the internet population and accounted for just 24% of the traffic on a typical day, according to Pew Internet & American Life Project data. But by 2010, those percentages had climbed to 34% of the internet population and 32% of all traffic. Ten years ago, only a quarter of boomers went online every day; in 2010 that number jumped to 70%.

Among 50- to 64-year-olds, social-media usage grew by 88% from April 2009 to May 2010, up from 25% to 47% of all users in that age group, according to Pew Internet. And one in five of them now use social media every day, up from one in 10 last year.

Along with the timeless youth platitude that "old people just don't get it," the misconceptions about boomers and technology incompetence may also be a demographic grouping problem.

The age range in many market-research surveys and studies, for instance, often puts the oldest demographic group at 50 and older. However, Robert DiLallo, director of Grandparent Marketing Group, New York, said that designation is too broad.

"People who are 65 and older were at the tail end of their careers when the real tech revolution began and did not get introduced to the internet that way," he said. "I'm 60 years old, but I'm no more like a 70-year-old in my tech use than I am an 18-year-old."

THE FACE OF TECH CONSUMPTION: Edelman strategic counselor Marilynn Mobley

Forrester's research, for instance, found that among seniors ages 66 and older only 67% owned cellphones. However, 84% of young boomers ages 45 to 54 and 80% of older boomers ages 55 to 64 owned cellphones.

Boomers also use their phones for more than calling, vs. seniors. According to Deloitte's annual media research, 66% of boomers send text messages, trailing Gen X-ers at 80% and millennials at 88%, but way ahead of the 28% of matures (64-plus) who text. Another 37% of boomers have accessed the internet by phone, just behind Gen X at 42% and millennials at 55%, but again ahead of matures at 20%.

Grandparent Marketing Group research notes that the boomer generation and millennials are strikingly similar demographic groups. Both number around 80 million and both grew up in some of the U.S.'s most prosperous eras ('50s/'60s and the '90s).

So it should be no surprise that boomers' internet behavior is more similar to millennials, according to Pew research. Both groups overwhelmingly use email (91% of boomers/94% of millennials), search engines (88%/89%), research health information (78%/85%), get news (74%/83%) and check out online ratings (30%/31%).

The key for marketers to reach boomers is not to dismiss technology as irrelevant to them, but rather to figure out what technology they prefer.

"Which platforms resonate with which demographic?" said Ed Moran, Deloitte director of insights and innovation. "Take gaming for example. For male mature users aged 60 to 75, the PC is the preferred platform, while for the under-15 age group, it's consoles or the iPhone."

Ms. Mobley concurred: "I think the biggest difference in the way boomers use technology vs. the younger generations is that we tend to see it as a way to get something done -- whether that's something at work or staying in touch with friends and family. Gen X and especially Gen Y just see it as a part of life."

Beckoning Boomers to the Web

Eons and TeeBeeDee both court the over-50 crowd, but their diverging paths illustrate the differences between Web 1.0 and Web 2.0
by Sarah Lacy

In the summer of 2006 my inbox was flooded with pitches from new Web companies hoping to bring some of the MySpace (NWS) magic to the largest and most neglected demographic on the Web: baby boomers. Makes perfect sense. Boomers represent a huge market, and more than 65% of Americans between the ages of 50 and 70 use the Internet. Many would feel out of place on MySpace or Facebook, though they'd still like to connect online. And advertisers who use the online medium would certainly like to reach them.

A year later, many boomer-focused sites are discovering it's a lot harder than they thought to build a MySpace for adults. There are plenty of contenders, including Gather and BoomJ. But the duo that most interests me is last year's glitziest entrant, Eons.com, and a scrappy newcomer, TeeBeeDee, standing for both "the boomer demographic" and "to be determined," a reference to the options open to people in the postkids and retirement stage of life.

Eons and TeeBeeDee are a study in the contrasts between Webs 1.0 and 2.0 and how each generation of companies views—and tries to conquer—its respective corner of the world.

A Portal for All Things Boomer
Reminiscent of an earlier Web era, Eons has pedigree, cash, and eyeballs: Founder Jeff Taylor previously founded Monster Worldwide (MNST); Eons has raised $32 million from Sequoia Capital and General Catalyst Partners; and it gets about 600,000 unique visitors a month, according to comScore (SCOR).
Headquartered in Boston, Eons launched with fanfare, issuing press releases about its cash, early advertisers, and how Taylor—a few years shy of 50—left a cushy job to start this new venture. Reporters ate it up (BusinessWeek.com, 10/16/07). And since free press only gets you so far, Eons began spending hundreds of thousands of dollars a month on marketing.

Taylor also did copious market research and found that virtually none of his focus group participants wanted anything to do with social networking. So Eons began as more of a portal for all things boomer, with a staff writing articles about life-changing topics boomers face. Taylor soon discovered his focus was wrong. An article on how to quit smoking would get a paltry 30 page views, while a posting from a user who hadn't smoked in 51 hours but said he was tempted to have a cigarette would get 300 comments. "It was clear people wanted to talk to each other, not get talked to," Taylor says.

Indeed, much of the early Eons approach was out of step. Credentials, lavish spending, even large audiences—all of it was paramount in the 1990s, when entrepreneurs dreamed more of huge brands than useful sites, and getting to market first was more important than getting to market right. Spending millions of dollars—including on TV commercials—to buy traffic, as Eons did, is now anathema to many who lived through the excesses of 1999 and 2000 and paid dearly when it all crashed. Better to invest in engineers who can build a product so indispensable it spreads on its own.

Authenticity Over Market Research

Compare all of this to TeeBeeDee, begun by Parenting magazine and CNET Networks (CNET) veteran Robin Wolaner. The company has put out a grand total of two press releases and spent a few thousand dollars on marketing. It has raised a modest $7.5 million from Shasta Ventures, Monitor Ventures, and several angel investors including Ron Conway. Wolaner has hired just 19 people. TBD did some modest market research but ignored most of it. Wolaner says she learned to distrust research after working in Penthouse magazine's promotion department, where she used market research to "prove" to advertisers that people bought the magazine for the articles, not the pictures.

Instead, her team mostly built what they would like to see online and figured they'd iterate from there. That's much the way some of the most successful Web 2.0 startups, including Yelp, Digg, and Facebook, were born. TBD is a lot like those companies in other key ways: It's housed in a dingy, anonymous building in San Francisco's South of Market district. Desks are scattered around a wide open space, there's a buzz of activity, and everyone is dressed casually, many in TeeBeeDee T-shirts. The only difference: Almost everyone working there is over 40.

Which underscores another key Web 2.0 hallmark: authenticity. Every great social networking site was built by someone the community can trust and relate to. Early on, college kids and recent graduates could identify with Facebook founder Mark Zuckerberg. And what early MySpace hipsters didn't have a little affinity for the ubiquitous, automatic first "friend," MySpace co-founder Tom Anderson, even if he was lying about his age? Building a site by listening to hundreds of thousands of vocal members is hard work, but the more a site is built for you and your peers, the easier it is to understand what they have to say.
What to Do Next
Since Taylor, 47, can't even join his own site, which bars anyone under 50, Eons is breaking the cardinal rule of the Web 2.0 handbook from the get-go. Wolaner's site, on the other hand, has no such restrictions, because it's focused less on that pivotal birthday and more on the stage of life when you start to see more wrinkles, your career may be less important, your kids are out of the house, and you're figuring out what comes next. It's her stage of life. Wolaner, 53, knows well the feeling of getting that first AARP mailing at 50. It's not "Oh, great, I get a discount!" she says. Instead, it's "Ew, am I really old enough for this?"
To its credit, Eons has adapted well to at least one Web 2.0 way of doing business: iteration. The site has learned from early mistakes and reacted swiftly, recasting itself as a social network. Eons has slashed marketing and hopes to take off through word-of-mouth instead. The feisty Taylor is coming around to the benefits of a small but loyal community, over a mass torrent of clickers who don't stick around. "Everything about me is saying we need to get this business to grow, but I am learning to do things differently this time," he says.
Capital Can't Buy Community
As a result, the distinctions between the sites now are diminished. Both recognize that boomers want a site that will help them meet new people and organize around common interests. Both understand they have to be simple and intuitive so they lure more than just early adopters. And, Eon's early missteps aside, both realize listening to users will get them there.
So who will win? Part of that answer depends on what each company counts as success. Expanding to 600,000 users in a year clearly wasn't enough to support Eons' original business model, prompting layoffs of 35% of its staff. But TBD, with its lean staff and expenses, would be thrilled to hit those numbers sometime in the next year. Because, at its core, TBD gets something Eons still may not: To build a huge Web 2.0 company, it's not about getting big fast, it's about getting it right first and then growing. A community needs to love your site, and no amount of venture capital or advertising can buy that.
Lacy has been a business reporter for 10 years, most recently covering technology for BusinessWeek. Her book on the new generation of Internet moguls and the rise of Web 2.0 will be published by Penguin Publishing in 2008.