Jennifer Aniston is 40!

Those of you who know me or have become frequent readers of Media Realism might be more than a little surprised by my People Magazine style title for today's post. Well, today's topic is demographics and the working title for this post was initially "Demographics are Destiny." When not even my panel members responded in their usual 90% mode, I knew I might lose a thousand readers or more before they even began the article.

So bear with me for a couple of minutes. The lovely Ms. Aniston is germane to our topic today.

The issue at hand is that the Western world plus Japan is getting older; in some cases, significantly older and quite rapidly. The average age of the Germans, Japanese, and Italians is well into the '40's. Late in 2009, the British, French and Canadians will join them. In fact, the median age of Western Europeans is rising two days per week according to UN estimates. Today, in Western Europe, there are 3.8 people working for every pensioner. In 20 years, it will 2.4 workers who will support every greybeard.

The US remains relatively young at 36.4 largely due to the consistent influx of young immigrants from Mexico.

Okay, just a few more statistics. Birthrates are plummeting. According to population experts you need 2.1 children per family to sustain ZPG (Zero Population Growth). In the West, even ZPG is becoming a memory. Italy, Greece, and Spain are at about 1.3, Germany 1.4, and Scandanavia 1.7 to 1.85 depending on country. Taiwan is down to 1.13 and Hong Kong 1.0.

Does this matter to marketers? It should. Investment analyst Harry Dent who uses demographics to track investment trends put it this way: " Declining population is disastrous for a country, as innovation declines well before economic trends--and you just can't have an economy where most people are in a nursing home! Yet aging trends are difficult to reverse, as an aging population tends to be more adverse to change and is increasingly less able to have children."

Right now, the U.S. is right on the bubble with a birthrate of 2.1. This is due to our culture which in recent decades supports working women. Also, the high immigration of persons from Mexico and South America includes people who tend to have far higher birthrates on average than of couples born in the U.S.

So, for the short term, our population will grow modestly. But looking ahead a bit, things could get difficult in many ways.

We need to keep an eye on this aging trend for marketing, societal, even political reasons. The place that I will monitor closely in the years to come is Italy. Many of us know or grew up around large boisterous Italian families that added much laughter and love to our lives. Well, in Italy, they are no more. The average Italian male marries in his 30's and has one child. Social theorists say they stop at one because they marry late, want a better life economically, and Italian men (like Americans) tend not to help out much around the house. As a result,the women do not want other kids. In contast, in Norway where 75% of the women work, men help out a great deal and they have the highest birthrates in Europe!

Also, some 31% of Italy's budget goes to their form of Social Security. As fewer people contribute to the old age pool, something has to give. Either benefits will get cut or taxes will soar. We will likely face that same issue around 2016-2018 given our current spending deficits when some hard choices will be made regardless of which party is in power. Taxes for the affluent will almost surely rise. It is a demographic certainty. Long term, it may be a good thing to keep Social Security and Medicare solvent but the debate will be loud and ugly.

Harry Dent, the demographically driven financial analyst defends his service by saying the "we can forecast the general direction and magnitude of major economic moves by tracking highly predictable demographic and consumer spending habits."

So, where does that leave all of us in advertising and marketing or media sales?

We see a couple of trends emerging. Despite the inevitable aging of the US population and other Western nations, media changes will continue to accelerate. I cannot tell you how many friends and acquaintances in their 50's and 60's brag to me that they rarely see or hear commercials now that they have a DVR or satellite radio. And, we over 45 types tend to be the ones with the serious money that many marketers want to reach. (Sorry, kids)

As baby boomers (born 1946-64) retire in big numbers, they will likely put even more stress on securities and real estate markets as they cash in savings to live on in their golden years.

This would appear to set the stage for a trend that we have mentioned recently in Media Realism. Established brands will do very well relative to MOST upstarts. It will be very hard to reach these oldsters with their wads of cash as their children will have taught them how to control their media environment quite well and avoid most commercial interruptions.

Line extensions of the firmly entrenched will likely be the big hits in food, cleaning products, and over the counter medicines. Luxury items may suffer given increased tax rates and I would not want to own a McMansion 7-10 years from now. Even when real estate bounces back, they could be white elephants given the demographic tidal wave headed our way.

Perhaps someone can make a breakthrough with social media among the mature that could provide new ways of reaching them and introducing them to a vast array of new products. Right now, however, that looks like a very tricky problem for even the most resourceful new media innovators.

So, be nice to young adults. Going forward, they will be paying for part of your retirement and a large part of your health care. If you are a nice old man or woman maybe they will not resent their higher taxes as much as you might think.

By the way, Jennifer Aniston is not the only hot babe to turn 40 this year. She is joined by such luminaries as Catherine Zeta-Jones, Jennifer Lopez, and Renee Zellwegger.

Forty really is the new 30!

If you would like to contact Don Cole directly, you can reach him at doncolemedia@gmail.com