Nearly 20% of people over 50 have an income of over pounds 25,000 a year, 50% own their homes outright and 17% have savings of over pounds 50,000, according to research agency BMRB.
Yet over-50s have become a forgotten army of consumers. Referred to as the 'grey market', they are often viewed as passive, but the statistics suggest these are consumers who are very much active.
In the past year, more than 75% of the over-50 population took a holiday, 14% bought holidays worth pounds 1000 a head or more, and 28% went to a beach resort, according to the BMRB. More than 30% have a computer at home, 40% of whom have internet access, which they use to look for prices and deals on holidays.
Martin Smith, managing director of specialist 50-plus ad agency Millennium Direct, says: 'It used to be safe to write these people off as non-active consumers, thinking their spending days are over, but nowadays it's not true. They still have aspirations.'
Unlike time-poor 30-somethings, who have mortgages to pay and young children to look after, the 50-plus age group has a greater disposable income and the time to spend it. Despite this, many marketers continue to ignore them as consumers.
Claire Labrum, director of the corporate and financial unit at The Research Business International (TRBI), says: 'The over-50 sector of the population is growing. The baby boomers are now reaching their 50s. But companies still tend to concentrate on the family market.
'The over-50s may buy relatively lower volumes of food and household products, but they tend to visit the shops three or four times a week, spending just as much in total as families that visit once.'
This age group, argues Labrum, is also likely to make high-value purchases in preparation for retirement or to achieve lifelong ambitions or realise dreams. They may buy that second home in France they always promised themselves, go on a cruise or buy a car.
Even when they're not making these big one-off purchases, they're still extremely wealthy, taking up to five holidays a year, according to TRBI.
Paradoxically, this age group is not as important as it should be on the productive side of the economy. This could be why it's so often disregarded by marketers looking for customers with cash to spend.
Leon Kreitzman, managing director of specialist agency Maturity Marketing, says: 'There is a fallout in employment terms, but in consumption terms, more than 30% of expenditure on household goods comes from households where the head is over 50.'
This group is also often perceived as a 'dying' audience - marketers believe they have to aim their products at the youth market in order to have a renewable reservoir of consumers with brand awareness and loyalty.
Alan Hedges, an independent research consultant and spokesman for the Market Research Society, says: 'To a lot of companies, the idea of addressing themselves to an older market is a death-wish.'
Hedges thinks the decline of Marks & Spencer is related to this theory.
'It had a fuddy-duddy image which it wanted to change, but never could. It thought that a lot of its customers were over 50, so it had to target the youth market. But then it ignored and lost the over-50s.'
When it comes to researching and targeting the over-50 age group for product development and marketing strategy, the biggest mistake marketers can make is considering it as a single consumer group.
As the over-50 market accounts for 38% of the population, it is invariably going to include consumers from widely varying spectrums of life, who have similarly differing needs and outlook.
'In no other market would such a disparate group be treated as a homogeneous whole. It is very shortsighted,' says Labrum.
Be more discerning
Dr Tamsin Addison, managing director of research firm Decision Science, believes the very term 'grey market' may be misleading marketers in their approach to this sector.
'Although it's easy to lump them together, a 50-year-old and a 90-year-old are not the same. Life stage is much more important than age. If you're 52, you have disposable income. If you're 80 and you're on a pension, it's a different story.'
Indeed, once retirement funds have dwindled and the over-50s reach their late-70s, average weekly expenditure per person reduces radically. According to the Office of National Statistics' 1998-99 Family Spending survey, it drops from pounds 175 in the 50 to 64 age group to pounds 105 in the 75-plus age group.
Addison is not convinced that marketers bother to research the different strata of this age group at all.
But one marketing consultancy that insists it does is Value Engineers, which defines the age groups as 'youth', 'parent', 'mature' and 'old', the equivalents of up to 25, 25 to 50, 50 to 75 and 75-plus respectively.
Gavin Galloway, a consultant at the company, admits: 'Fifty to 75 is still a wide range, but people of that age are still active.'
But Millennium Direct breaks the groups down even further, calling 50- to 59-year-olds 'thrivers', 60- to 69-year-olds 'seniors', and the 70-plus, 'elders'.
Smith says: 'Companies don't use or do the research into over-50s that they should. Marketers have always known about the demographic time bomb, but when it comes to briefing ad agencies, they don't want to get pulled down by the statistics or make too many concessions to the over-50s market.'
Sue Nelson, senior manager at Help the Aged, agrees that a lot more could be done to target this group in research.
Saga Group, most famous for its over-50 holiday offerings, has been researching the market since it was established around 50 years ago.
In conjunction with BMRB, it conducts a bi-annual survey, called TGI Gold, of the 50- to 75-year-old market, and also uses a mix of 20 different research agencies for smaller projects. In 1999, it spoke to between 15,000 and 20,000 customers and carried out 60 customer workshops and 70 focus groups.
Saga uses its research to develop new products, which now extend beyond holidays into financial products and utility provision from the Saga Services arm and a customer mag, Saga Magazine, which is published in-house.
John Pickett, head of market research at Saga, says: 'Research is taken seriously at Saga, but it should not be used as a magic wand. It should be used as customer insight, to free up companies to use their creativeness and develop new products.'
Pickett believes the best way to tackle researching the over-50s group is with qualitative methods such as focus groups, customer workshops, and 'depth interviewing' in couples. 'You need to take on different research methods for this group. They need longer discussion periods as they have more experience and more to say, so it takes longer,' he says.
'Getting them to prepare beforehand is important too, so they have time to read material or so they have brought their glasses. Also, it's best to use larger, clearer stimulus.'
Value Engineers' Galloway agrees. 'There are simple rules, like making sure focus groups are held in a well-lit, quiet environment and making sure people have their hearing aids with them,' he says.
He believes that researchers must remember brands don't mean the same to a 75-year-old as they do to a 17-year-old. 'They refer to 'makes' rather than brands. To them, Heinz is just a make of baked beans, but to younger people, brands have personalities,' says Galloway.
'If you asked a 25-year-old what sort of person a particular brand would be, they could answer the question no problem. If you asked a 75-year-old the same question, they'd tell you to stop asking silly questions.'
If more marketers took the time to research the market, they would also find out how comparatively easy it is to do.
The over-50s have time to fill in forms, they understand the motivations behind what they are doing and they can often participate in focus groups during the day. And according to Millennium Direct's Smith, this target group traditionally gives a good response to mail.
His agency, which carries out more than four million over-50 lifestyle surveys every 18 months, receives an average of 100 responses for every 1000 people in this age group - a 10% response. This compares favourably with the average direct mail response of between 3% and 4%
But Maturity Marketing's Kreitzman believes that neither forms nor focus groups are the way forward for this market. He says that although straightforward questionnaires work in terms of generating a high response, they don't always give a true picture of the respondent's circumstances, as an individual's perception of themself can become skewed with age.
'Someone at 70 may think they are fit and healthy compared with their peers, but in actual fact they might not be able to walk that well,' he says.
He also points out that researchers should visit people in their homes as they often can't get to focus groups. And researchers also need to build up evidence of the way the over-50s live.
Vanella Jackson, international planning director at ad agency Abbott Mead Vickers BBDO, and spokeswoman for the Association of Qualitative Researchers, says that observation has a vital role to play in market research as a whole.
Having completed a two-year international study on the use of qualitative research in the over-50s market, she believes that treating them differently during research can taint the development of products and advertising from start to finish.
'If you treat them differently from the research stage, you end up with ads that don't get it right. Older people still want good ads and, like other age groups, they still say the Guinness or Bud ads are their favourite.
Older people like a lot of humour, but there aren't a lot of funny ads aimed at them. Even if you need a stair-lift, you don't need those ads,' she says.
Galloway cites Yamaha as an example of a positive approach to marketing to an older generation. While the company's average customer is over 43 - people who perhaps used to ride motorbikes in the 1960s - the company does not market its bikes as a product for the over-50s.
'Nobody particularly wants to get older, so why would you want to see a picture of a bloke like yourself? You want to think of yourself as younger, and adland responds to that,' says Galloway.
So older people still want ads that let them aspire to own a product, although they don't need to be aspirational in the same way as ads targeted at younger people.
Instead of portraying glamour, style or wealth, they can show health or fitness. Jackson cites AMV's 'Swim black' TV ad for Guinness as an example.
The ad showed an 80-year-old Italian man - a 'former champion' - winning a swimming race against the clock despite the passing years. And with not a walking stick in sight.
'There is too much caricature of older people and not enough positive role models,' she adds. 'A lot of Abbott Mead Vickers' work does target this age group, but it doesn't mean we portray them.'
A common explanation for the lack of understanding of how to advertise to the over-50s is that the marketers and agency staff responsible for creating the executions are rarely over 40, and so cannot empathise with the audience. 'It's a lot harder for a 20-year-old to understand a 50-year-old than the other way round - the 50-year-old's been there,' says Galloway.
This can be combated by including ad agencies in the research process, and making sure they are properly briefed on the findings before they begin the creative process.
'The over-50s don't want to see too many conceptual ads. They grew up with jingle-type ads and that's what they're used to,' says Saga's Pickett.
But Jackson, who says the creative staff at Abbott Mead Vickers are far from all being under 30, points the finger elsewhere. 'The problem is with client-side marketing people who are fearful, strategists who are over-cautious,' she says. 'Brave clients are hard to find, but I am starting to see more ads that have tried harder to speak to the over 50s.'
HELP THE AGED'S FUNERAL PLAN
Help the Aged is not just a charity. Contrary to popular belief, it also operates as a commercial organisation, offering products such as insurance services to its target market of over-65s.
In October it launched its latest service, the funeral plan. This allows customers to plan for and purchase their funeral in advance of their 'time of need', as it is referred to in the funeral business.
Sue Nelson, senior manager at Help the Aged, explains: 'Buying a pre-paid funeral means that people can plan their funeral in advance, right down to the flowers and the music. They buy it at today's prices and the money is placed in a trust fund. When the 'time of need' comes, the money is there.'
According to Nelson, the concept of the pre-paid funeral is popular and established in the US, but in the UK the market is currently very small.
To see whether the UK market was ready to accept the concept, Help the Aged needed to complete extensive qualitative research.
It worked in conjunction with The Research Business International (TRBI) to bring together 12 focus groups in the key market area - the over-65s.
It also carried out group interviews and couple interviews lasting from 40 minutes to an hour. The campaign used larger print brochures and test materials along with 'plain English' that the audience is likely to relate to.
Nelson says: 'We explained the concept of the pre-paid funeral and then showed them the marketing literature we had developed. We looked at attitudes toward the concept and tried to build these into the brochures.
'Some people wanted to save their loved ones the hassle of organising a funeral and others wanted to plan their funeral like they planned their wedding or any other celebration.'
So far, Nelson says the pre-paid funeral service has been very well received by its target market.
Over-50s' spending power
22% have received an inheritance.
51% own their own home outright, compared with 9% of under-50s.
22% own homes worth pounds 100,000 or more.
7% have savings or investments worth pounds 100,00 or more.
33% are more likely than the average person to have taken three or more holidays in the past year.
Source: TGI Gold 2000
Over-50s' attitudes to advertising
42% agree that they expect advertising to be entertaining, while 14% disagree.
24% say they are happy with ads portraying older people, while 30% are unhappy.
49% agree that ads show older people as wiser, while 13% disagree.
48% say the media doesn't take older people seriously, with 12% disagreeing.
Source: TGI Gold 1999
I don''t see myself as being my age:
Thrivers Seniors Elders
50-59 60-69 70+
Agree 86.3% 89.5% 90.7%
Disagree 13.7% 10.5% 9.3%
Source: Millennium Research Bureau
I can relate to the advertising on TV because it portrays my age group
Thrivers Seniors Elders
50-59 60-69 70+
Agree 12.1% 14.5% 20.6%
Disagree 87.9% 85.5% 79.4%
Source: Millennium Research Bureau