CBS Corp., derided by rivals for attracting TV viewers too old for advertisers to care about, says 54 is the new 49.
The last of the U.S. baby boomers turn 48 this year, moving into the sweet spot for luxury cars, financial services and pharmaceuticals, three of CBS’s largest ad categories.
The shift is forcing marketers to reconsider how they target the $12.7 billion that researcher Kantar Media says they spent on prime-time network TV ads last year. As boomers -- people born from 1946 through 1964 -- leave the 18-to-49-year-old group that has long dominated television advertising, companies are focusing more on older consumers.
“While we enjoy winning in all the categories, 18-to-49 is not the end-all it’s made out to be,” Nina Tassler, CBS’s head of entertainment, told TV critics last month in Beverly Hills, California.
With the National Football League’s Super Bowl and a key NFL playoff game in the TV season starting next month, CBS will probably lead in 18-to-49-year-old viewers for the first time in 20 years. Still, the most-watched network overall will generate more sales from ads targeting 25-to-54-year-olds, Tassler said.
Though the groups mostly overlap and represent a large chunk of the population, the younger skew of those 18 to 49 has made them a desirable audience since the 1970s. That’s when advertisers began to focus on the 75-million plus U.S. baby boomers, who were reaching maturity and forming households, seeing younger consumers as more open to new products and less likely to have established loyalties.
Time and economics are changing that. Most Americans don’t set up households until after college, according to Pat McDonough, senior vice president of insights, analysis and policy at Nielsen, which reports the audience ratings used to set advertising rates. And more people in their 50s are willing to try new products, she said.
“Realistically, most 18-year-olds aren’t determining what laundry detergent they’ll use,” McDonough said.
With an average age of almost 57, CBS has the oldest audience of the four largest broadcast networks, according to Nielsen. Fox is youngest, with a median age of 45, while NBC’s median is 50 and ABC’s is 52.
The perception that 50 is “ancient” is changing, according to Peter Gardiner, national media buyer at Deutsch, a unit of New York-based Interpublic Group of Cos. that lists Microsoft Corp. and Johnson & Johnson as clients. Most have grown children, are in their peak earnings years and are still a decade or more from retirement, he said.
“It’s not that the younger demographic is less important,” said Gardiner, who notes half his clients have begun to target 25-to-54-year-olds in recent years. “It’s that the older audience is becoming more important.”
The buying power of older viewers has also grown, said David Poltrack, CBS’s chief research officer, while 18-to-24-year-olds have been hit hard by the slow recovery.
The 45-to-64-year-old age group was least affected by the recession, according to Census data. The group’s 2010 median annual income of $60,700 was 2.1 percent less than before the recession. Those under age 25 suffered a 9.7 percent decline, to $24,140.
In the TV season that ended in May, half of the 30 shows most-watched among viewers ages 25 to 54 aired on CBS, including “The Big Bang Theory” and “Two and Half Men,” according to Nielsen data.
CBS says four of its top five advertising categories by revenue target viewers ages 25 to 54, including luxury cars, pharmaceuticals and financial services like banks, credit card companies and insurers.
“This demo, when you look at 25 to 54, is the cornerstone of what luxury marketers are looking for today,” said Loren Angelo, general manager of Audi Brand Marketing.
Investors see a difference too. CBS, controlled by 89-year-old billionaire Sumner Redstone, has a 58 percent higher price-earnings ratio than Viacom Inc., Redstone’s other major media holding, which targets younger viewers with networks such as Nickelodeon and MTV.
CBS, down 0.5 percent to $36.18 at the New York close, has advanced 33 percent this year, compared with 11 percent for Viacom and 17 percent for the S&P 500 Consumer Discretionary Index.
CBS still sells a “substantial” number of commercials targeted at younger viewers, said Jo Ann Ross, who oversees ad sales. The network airs 11 of the most-watched programs in the 18-49 demographic, more than any other broadcast network, according to Nielsen data.
Nonetheless, “we always end up with more being spent on adults 25 to 54 in prime time,” Ross said.
With the youngest median audience of the big four networks, Fox is still viewed by marketers as the best place to find viewers 18 to 49, and its biggest categories include retail, telecom, movie studios, automobiles and fast food, said Toby Byrne, who oversees the network’s ad sales.
Intel Corp., currently starting its biggest campaign since 2003, shifted to the younger demographic after long targeting the older group, said Kevin Sellers, sales and marketing group vice president.
“The younger demographic, even with the economic slowdown, loves technology and will spend on technology, whereas an older consumer may delay buying a new smartphone or laptop,” Sellers said, citing a survey that found “to the younger demographic, being connected is more important than eating, it’s more important than sex.”