The first wave of baby boomers is about to turn 60. eMarketer analyst Debra Aho Williamson tells us that marketers need to be ready for older online consumers.
The first baby boomers will turn 60 next year. This heralds a huge change in the U.S. population over the next 20 years, and a similar change in the internet population as well.
In 2005, there will be an estimated 50.4 million people ages 50 to 64 in the U.S., and another 36.7 million people 65 and older, according to projections from the US Census Bureau. By 2025, people 65 and older will make up 18.2 percent of the U.S. population, according to projections from the US Census Bureau, up from 12.4 percent this year. In raw numbers, that means that in 2025 there will be an estimated 63.5 million seniors in the US, 73 percent more than today.
There are powerful differences in internet usage between boomers and the current senior population. eMarketer estimates that there are 33.2 million people online in the U.S. between the ages of 50 and 64, many of whom are boomers. That's triple the number of 65-plus online users.
The explanation for the stark difference in internet usage among older Americans and seniors is at once both simple and complex. The simple part is the mere fact of having access. The internet isn't easily accessible for many seniors, many of whom retired before internet access became commonplace in the workplace and have no computer in their home. But for those ages 50 to 64, particularly the youngest members of this group, the internet is much more ingrained in their lives. They use it at work; they use it at home.
The contrast in computer and online usage among those 50 to 64 and those 65 and older is evident in a study by Kaiser Family Foundation in 2004.
If the simple reason for the difference in internet usage between the two groups is in having access, the more complex reason lies in the differences in psyche between boomers and the generation before them. While it's difficult to generalize an entire generation, boomers are often thought of as more adventurous and willing to explore new territory. Using the internet is an extension of that quest.
Seniors are from a different era. For many of them, the desire to go online simply isn't there. Baby boomers, by contrast, see it as something exciting and new. Tomorrow's seniors will be a very different group of internet users than today's.
Boomers are broadband fans
Seniors are one of the last strongholds of the dial-up access business. Boomers, on the other hand, are quickly becoming converts to high-speed access. This has great bearing on internet usage, because it implies greater frequency of use and greater likelihood to use rich media such as audio or video.
In the month of November 2004, broadband users spent an average of 22 hours online, versus 17.75 hours for dial-up users, according to Nielsen//NetRatings. Among people who had used audio or video online in the past month, 65 percent had broadband at home, according to an Arbitron/Edison Media Research 2005 study. Broadband users are also more likely to spend more online, an average of 34 percent more than dial-up users, according to Nielsen//NetRatings.
Kaiser found in its 2004 survey that just 28 percent of adults 65 and older used a high-speed internet connection at home, versus 44 percent of those 50 to 64.
Boomers are more broadly engaged online
Research by Pew Internet & American Life Project has shown that seniors, once they go online, are often just as enthusiastic about the internet as younger generations, particularly in the areas of email and getting news online.
However, people in the 50 to 64 age group are much more engaged with the internet overall. They are more likely to pursue a broader range of activities, and they are more willing to experiment with newer online pursuits such as blogs. In many respects, they are more like younger age groups than like seniors.
Some of the differences in usage can be attributed to differing life stages. Retired people 65 and older have less interest in things like looking for information about a job or doing research for school or training. But shopping and managing finances are activities important to both age groups, yet there is a greater propensity for the younger group to do these things online.
Girding for change
Just as boomers changed other industries earlier in their lives, they will force change upon companies that do business on the internet as well. Financial services, health care and real estate are just a few of the categories that will undergo massive change as boomers demand online access to information.
For companies in these sectors, planning for boomer retirement isn't new. What's not as clear is whether the companies have a solid internet strategy to meet the demanding needs of aging boomers. Any company operating under the assumption that tomorrow's seniors will be as internet-shy as today's will be left behind.
This article is drawn from a new eMarketer report, "Seniors Online: How Aging Boomers Will Shake Up the Market," by Debra Aho Williamson. Ms. Williamson is a senior analyst for eMarketer.
eMarketer aggregates, filters, organizes and analyzes data from more than 1,700 research firms, consultancies and government agencies around the globe.