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It’s been almost a year since the iPhone X and 8 arrived, and while many analysts thought these would give Apple an opportunity to gobble up market share, it’s now clear consumers aren’t upgrading quite as quickly as expected. Advertisers need to pay attention to this trend to make sure they’re reaching consumers effectively. Here’s why.
What’s old is new
Many mobile consumers are sticking with their older devices, a trend we noticed looking at the volume of ad requests served to devices on our mobile ad platform across North America.
The iPhone 7 barely makes the top five, with just 6.5 percent of ad requests. The iPhone 6S/6 captured 14 percent and 12 percent of ad requests, respectively. The iPhone 5 comes in 3rd on this list, despite its original release date of almost six years ago!
Samsung’s older models also account for a significant number of ad requests, with the Galaxy S7 (2016) representing 8.3 percent, and the Galaxy S5 (2014) & S6 (2015) together adding up to a similar share.
The cheaper the better
The trend isn’t just about device generations. The Samsung Galaxy On5, for instance, is a sub-$100 Android smartphone released in 2015. It targets a very specific demographic: consumers who want to pay as little as possible for a smartphone. While it would be easy to dismiss it as just another “cheap smartphone,” the On5 accounts for a significant number of impressions, ranking in the Top 20 devices on our network.
It’s also becoming clear that large numbers of consumers are enjoying content on devices that are 4-5 years old. As smartphone technology has matured and generational improvements have become more and more incremental, many consumers have simply decided they’re happy with their older phones’ performance.
This data might surprise many marketers who, understandably, rush to find ways to leverage the upgraded technology in newer handset models. But the users behind the older and cheaper phones are valuable for advertisers as well. The key to finding their value is determining which consumer segments are using them.
Defining this sub-segment of mobile consumer
It would be easy to assume that consumers who are sticking with older models, or who are opting into very cheap devices on networks like MetroPCS (like the Galaxy On5), are mostly from low-income households. This is not the case.
Industry data points to consumers across all demographics who can afford to upgrade, but don’t. This includes Baby Boomers, who are just as obsessed with their smartphones as Millennials, spending 2.5 hours a day on them. Boomers are spending money every single day: buying CPG products like Pantene shampoo and Olay moisturizer. (In fact, 55 percent of CPG sales are made by Boomers.) They eat out at chain casual-dining restaurants like Olive Garden and California Pizza Kitchen and buy coffee at Starbucks or Coffee Bean. They’re at Petsmart buying products for their pets. In short, this population may have older phones, but they’re spending.
While the buzz around marketing to Millennials is well-earned, we should remember that Boomers have money to spend — they control 70 percent of all disposable income in the U.S., and 35 percent have a household income of $100k or more. We’d like to think that young people spend more money on retail items because that’s who most brands direct their advertising towards. But people age 51-69 actually spend the most on retail because they have more disposable income thanks to years of working, saving, and investing. Unlike Gen X, Y, and Millennials who are at work all week, Boomers also have time in their day to spend it!
For advertisers, this is a demographic you simply cannot ignore — they are a prime target audience for your brand. Sure, if you’re selling the latest Mercedes, you might want to run your campaign on a higher-end phone with a very specific audience, but if you’re in CPG, Retail, QSR, or even a vertical like Travel (where Boomers are spending more money than any other age group), you’re limiting your reach if you aren’t considering older and cheaper devices.
Lifetime expectancy → Lifetime value
Currently, the 55-75 age group makes up half of the U.S. population. The data indicate that this age group will continue to represent a large percentage of the population in the future. If you were building a brand 40 years ago, you wouldn’t focus on consumers in their 70s, 80s and beyond. Now we’re seeing many people — with sustained buying power — living well into their 90s. Customers acquired in their 50s, 60s, or even 70s have the potential to provide a great deal of value to an advertiser.
As Generation X matures and enters this category, we’re going to see a similar trend.
I’m the primary decision-maker in my household and a gainfully-employed Gen X’er. Advertisers should be targeting me. But if you tried to find me by targeting newer devices, you wouldn’t reach me — I’m still enjoying my older phone.
Rebecca Mauzy is Chief Product Officer at Mauzy.
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