Influencer marketing tends to get a lot of press these days, given the stratospheric sums involved in celebrity endorsements from influencers and brand ambassadors. After all, when celebrity influencers like actress Charlize Theron can command USD $55 million for promoting Dior products, and The Rock—aka WWE wrestler-turned-actor Dwayne Johnson—pulls in tens of millions of dollars per annum from a handful of celebrity endorsements, marketing executives need to be comfortable with the ROI on their influencer spend. Endorsements for sportswear brand Under Armour, reportedly earned The Rock USD $25 million a year, but the riches are two-way—companies like Under Armour that concentrate on the best brand/celebrity partnerships for their products will see the highest ROI.
With Johnson set to become a billionaire from his second career sometime soon as he gives the world a masterclass in the craft of career scalability—in other words, the opportunity to make more money with no corresponding increase in labour—brands are more than happy to funnel huge sums of money into the hands of influencers, just so long as the cash delivers results.
But there are a few common misconceptions about demographic targeting and exactly which demographic various brands expect to reach through their choice of ambassador or influencer. With so many focusing on targeting millennials and their estimated USD $200 billion in buying power, are firms sidelining the even greater prize of the power of older generations at their own considerable expense?
Marketing psychology: Is it a science?
Neuroscientists and psychologists have conducted extensive research in marketing psychology and have discovered that celebrity influencers pay off if they can fulfill the so-called brand trinity (vision, mission, and values). More importantly, the research reveals that the way consumers make decisions about parting with their hard-earned cash and the speed of those decisions can be heavily influenced when companies introduce a well-placed endorsement of an influencer. In other words, a product sold with an expensive A-lister endorsement is far more likely to hook loyal customers.
Gen X and Boomers: Why are they important?
Baby Boomers are the most powerful spending force of all demographics across the globe, while Generation X—consumers born between 1965 and 1980—accounts for one-third of all personal income in the US.
Combined, these demographics are a powerful force. And given the colossal spending power of Gen X and Baby Boomers compared to the share of global populations they represent, marketers who choose influencers to target Gen Z and millennials exclusively run a huge risk of missing out on these big economic powerhouses. After all, the over-55s in the US alone account for more than 40 per cent of consumer spending, and boomers’ global spending power exceeds a staggering USD 15 trillion.
Brands need to think quickly to tap into this super-lucrative demographic, and yet, until quite recently, much of the older generation has been sidelined or overlooked by ads targeted increasingly at Millennials and Gen Z.
This remains something of a historical mystery, because influencer marketing has been shown to work extremely well with Gen Xers. In fact, research shows that brands harnessing the power of influencer and celebrity marketing and endorsement regularly enjoy an ROI some 10x that of traditional digital marketing among those aged 42 to 57 today.
Demographic targeting: Is it going wrong?
In short, influencer marketing aimed at the older demographic delivers extraordinary results and ROI, and the trick, according to industry insiders, is to recognise both the differences and similarities between older and younger audiences. For example, when it comes to social media platforms popular with marketers, Gen Xers and boomers don’t feature that heavily; market research from last year suggests that just one in ten TikTok users are over the age of 50. But with over 90 per cent of Gen X using social media every day, marketers need to carefully target the differences between generational online behaviours.
As one industry specialist has noted, “Many brands tend to be focused on reworking their marketing tactics to target Gen Z in an attempt to keep their brands relevant and to gain awareness amongst the newer-to-brand demographics. So much so that they tend to forget the power of the ‘mass affluent’ Gen X.” And ‘mass affluent’ is the key phrase here for marketers.
Beyond that, authenticity is crucial when it comes to using influencers to reach older generations—they want influencers to be credible before they part with their cash. As just one example, The Rock established the tequila brand Teremana Small Batch Tequila just four years ago. Clear that he wasn’t keen on the hard sell when it came to getting the product he part owns out there, he showed that he was more interested in building relationships with people and took his audience with him as he went about building the brand.
Of course, it’s handy to have 400 million Instagram followers when you need to get your message out there, but The Rock’s authenticity shone through because his audience knew him, among other things, for raising awareness of issues close to his heart. As one industry insider put it, “His authenticity won the hearts of his audience, building their trust in him… by being transparent and true to himself.” And within just three years, he had made Teremana a USD $3 billion company.
The good news is that this ship is beginning to turn around. Marketers are beginning to employ older influencers with huge online followings in order to reach an older demographic that is, by nature, resistant to more traditional advertising. As media company Digiday notes, “there’s a slow trickle of marketers who recognise the potential of working with older influencers and reaching older generations.”
The mass affluent versus the newer-to-brand
The watchword here for older audiences is ‘selective.’ Gen Xers and boomers are more discerning in who and what brands they follow. But that leads to higher engagement rates in those demographics. In fact, engagement for the over-55s is 2 per cent higher than with younger demographics, which is important when it comes to building long-term loyalty.
So big ROIs are achievable with a combination of the brand trinity and the right influencers.
As influencer-marketing agency BENlabs notes, “Not only are older generations actively engaging with creator content, they’re uniquely open to engaging influencer messages.”
Uniquely open. Remember that, and don’t miss out.
By Alex Lonides, Managing Director, Silx
