Are smartphone marketers smart enough?
Reporting on the International Consumer Electronics Show in Las Vegas (CES 2015), NPR reporter Aarti Shahani reviewed the cool new crop of low-price products and asked: “when it comes to smartphones, are Americans dumb?”
It’s a provocative question. It made us wonder when it comes to Boomers, are smartphone marketers smart enough?
The Pew Research Center reports over two-thirds (68%) of American adults owned a smartphone in December, 2014, with the highest level of ownership (80%) among consumers under 50.
According to Pew, the growth rate in this demo was way faster than among Millennials. Already over half (54%) of those aged 50-64 and a quarter (27%) of those 65+ have a smartphone.
So with the low hanging fruit almost picked clean and the younger market almost saturated it’s time for smarter thinking about “old” people. The 50+ space is now key to future growth, not just for smartphones but for app developers and – especially – mobile advertisers.
The $20+ Billion Boomer smartphone goldmine up for grabs
Plus ça change, plus c’est la même chose – the more things change, the more they stay the same. Written by French wit, Jean-Baptiste Alphonse Karr, in 1849, these smart words (how’s that for a segue?) still apply.
That same year, half a world away, the California Gold Rush erupted.
Just a couple of hours from the 1849 diggings via a Tesla, gold fever repeated itself in Silicon Valley after Apple launched the smartphone industry. By the end of 2014, Nielsen reports that smartphones held a 77% share of mobile phone sales.
With the shiny Millennial nuggets now harvested, mining the rich Boomer ore requires deeper thinking. Plus ça change …
Sure, some older Americans have been slow to switch to smartphones. But, years ago, they were also slower to adopt mobile phones; however, 88% aged 50-64 and 84% of 65-69 year olds own one today (Pew).
So, history tell us Boomers will steadily go smart, helped by the lower priced products described by Ms. Shahani. Using Nielsen’s 77% share figure as the Boomer target, and applying Pew market penetration estimates to U.S. Census Bureau data, we connect with exciting numbers:
- 76.5 million Americans aged 50-69
- 66.7 million own a mobile phone
- Of these, 34.5 million are already smart (52%)
- At a 77% share, the smart potential is 51.6 million
- Bottom line: 17.1 million new Boomer buyers are in play
But, in the VC-speak of “The Valley”, how do we monetize this?
A 2013 analysis of real smartphone costs – both phone carrier subsidized contract plans and straight purchases – suggested a median around $550 (Forbes, Tristan Louis). Even if this drops to $400-$450 over the next couple of years as competition heats up, it still translates to a potential Boomer market of $7 billion in newcomer units and $14 billion as current owners renew, upgrade and/or switch brands.
In addition to $20B+ in equipment, there are amazing opportunities for other businesses in the ecosystem if – there’s always an “if” – marketers learn how to engage Boomers.
Smart marketer attitudes towards Americans over 50 are changing
We started by asking: when it comes to Boomers, are smartphone marketers smart enough? Let’s add two more disruptive questions:
- When it comes to engaging Boomers, are mobile advertisers smart enough?
- When it comes to Boomers, are app developers smart enough?
Unfortunately, we Americans over 50 do not rank high on the priority list in Silicon Valley or along Madison Avenue. Group-think claims we are too old to change our ways.
But, with $20+ billion on the table, smart adland and tech-world Millennials are beginning to rethink old theories from the Mad Men and Fortran punch card era.
And they are learning there are even more Boomers than previously realized. The Boomer-Plus Generation™, born 1940-1965, extends the market to 93 million. As a country, it would be the 15th most populous on the planet – one that owns over 70% of U.S. household net worth.
Unadaptable over 50? Well, just remember who launched the smartphone at age 52.