Millennial Marketing

After three months of blogging about Millennials, it seems appropriate to ask what have we learned about them that differs from common wisdom? While we agree with many of the mainstream conclusions about Millennials – they are more collaborative, tech savvy, ambitious and self-confident than previous generations, I would like to take moment to challenge a few ‘myths’.

1. Millennials are cash strapped and debt ridden. (5.22.08) In 2006, households headed by 18-24 year olds had earnings before taxes of nearly $29,057, up from just $20,120 in 2003. Their earnings grew 7.5% 2005-2006 alone compared to a 1.1% jump for total households. While that is not a whopping salary, consider that less than 10% of 18-24 year old men are married, 50%live with the parents. This may help to explain why, according to the BLS, they are heavy spenders in virtually every category other than food and housing. Within many of these categories, they are more likely to purchase the luxury brand, like imported or craft beer, rather than the mainstream brand.

2. Millennials and Boomers make good partners. (5.19.08) While it’s true Millennials enjoy stronger relationships with their (mostly Boomer) parents than most other generations, they prefer working with Gen X’ers who they believe have more to teach them in the workplace. In fact, our research shows that Millennials have little respect for tech-challenged Boomers. Perhaps Hogwarts provides a good metaphor; in the Harry Potter books, the kids are the crusading and effective wizards, while the professors seem a little behind the times and inept.

3. The way to reach Millennials is through social media like Facebook. (5.19.08) Social media is more social than media. Millennials do not use social media to shape their buying and tend to ignore commercial messages. MySpace and Facebook lowered their sales goals by 11 and 13 percent respectively. EMarketer has also lowered its forecast for social media ad spending by 12%. Much more experimentation will be needed to bring brands directly into the application experience rather than relegate them to a banner or group, such as Slide’s branded ‘SuperPokes’.

4. Millennials are no more socially liberally than other generations. (5.29.08) According to Pew (2007), each generation tends to be more liberal than its predecssors, but Millennials are even more socially liberal than Boomers were at a similar age. On Super Tuesday, 58% of younger voters self-identified themselves as ‘Liberal’. This is happy news for Brand Obama.

5. Millennials are drinking more beer compared to earlier generations of young drinkers. (5.26.08) Not true! According to Nielsen, U.S. 21-30 year olds are forgoing beer in favor of wine, with beer dropping 12 percentage points in this age cohort over the past 10 years compared to a 6 percentage point drop among over 30′s. Instead, Millennials are embracing the wine culture in record numbers. This contrasts with France, where Millennials are losing interest in wine. Mon Dieu!

6. Millennials are cynical and mistrusting of institutions. (5.21.08, 6.04.08) According to Pew, Millennials put more faith in government and business institutions. Their faith in business is growing, while that of other cohorts is decreasing. The gap is even more pronounced when it comes to government effectiveness.

7. The Ultimate Millennial personna is an entrepreneur. (5.12.08) This is more true of Gen X’ers than Millennials, who tend to be more idealistic. Their goal is to ‘make a difference’ as well as be successful. Clues to the Millennial Persona may be found in some of the TV shows they watched growing up. There are a remarkable number of fifties style through backs and ‘princesses’ where the kids are smart, gifted, special and uniquely successful – Lion Witch and Wardrobe, Nancy Drew, High School Musical. There are also a surprising number of ‘princesses’ and average kids by day who become rock n roll stars by night.

Call it the Juno effect, the Jolie effect or the Jamie Lynn Spears effect. Whatever you call it, it’s ‘in’ to be a mom. The average number of births per woman reached the magical 2.1 population replacement rate in 2006 for the first time since 1971. The trend continued in 2007. According to newly released U.S. Census Bureau data, more babies were born in 2007 than even during the height of the baby boom – 4.32 million babies in 2007, more than the 4.30 million babies born in 1957.

There’s no question that being pregnant and having a baby looks cooler than ever. First there’s the celebrities reproducing faster than one can read about it in the supermarket tabloids. Then there’s the movies and TV shows. Ellen Page as Juno was spunky, hip and totally emulatable by teens in Gloucester, MA — and who knows where else? An NBC Reality Show, The Baby Borrowers, is reportedly intended to reveal the sleepless reality of parenthood, but would it be interesting at all if there were no interest in the topic? Knocked Up was a hit romantic comedy.

So who is driving the trend? Is it the Millennial teens and young adults or Gen X’ers who delayed having babies to establish careers? The 2007 numbers of births by age of mother are hard to find. But there are indications that it is the younger women driving the trend. The percent of births to women 15-29 has remained steady at 62% from 2001-2005, and there is no reason to believe that proportion has changed in favor of older mothers. Further, according to a Dec 2007 CDC report, the birth rate for the youngest teens (aged 10-14) declined, and the birth rate for older teens aged 18-19 (73 per 1000) is more than three times higher than the rate for teens aged 15-17 (22 per 1,000). The biggest jump was among unmarried women aged 25-29, among whom there was a 10 percent increase between 2005 and 2006.

The current baby-mania may have its roots in Millennial attitudes. Many no longer feel constrained by a timetable that calls for establishing a career, then a family. Millennials believe they can do what they want, and if a baby is what they want right now, why not go for it? As the products of one of the most successful generations of parents, they have good parenting role models. And as one of the wealthiest cohorts, they may feel they are financial as well as psychologically prepared. Who knows, they may be right? A plethora of babies may be just the latest clue that Millennials are not like Gen X’ers.

Barbara Bylenga is President Outlaw Consulting, a highly successful San Francisco-based company specializing in spotting trends. They talk to trendsetters and predict which trends will go mainstream. Outlaw has been telling companies like Nike, Levi’s and Diageo for years what the coolest of the cool kids want. In a recent exclusive interview for the Global Business Network(GBN), she affirmed that cool Millennials are indeed different from cool kids of the past. Here are a few highlights:

GBN: The bulk of your trendsetters are in their teens and 20′s. We hear a lot about the Millennial Generation and how they are different. Is it hype or real?

BYLENGA: Millennials, or Gen Ys, are definitely different. They seem to feel more empowered – and more entitled– than any generation before them. They have an innate team orientation that makes them excellent collaborators. And the ideas about issues like marriage and career are radically different. Their “American dream” isn’t about the picket fence; it’s a flexible freelance career and a life defined by passion. There’s no doubt in my mind that they are poised to change society. And they’re the biggest American generation ever — even bigger than their parents, the Baby Boomers. In just a couple years, they’ll be on-third of the U.S. population.

GBN: What are Gen Ys like as consumers?

BYLENGA: Gen Ys see themselves as change-makers. But they’re also busy trying to have a middle-class life, so their protests take different form than youth protests of the past. They see corporation’s as having lots of power but little heart, and they try to create change by using their dollars. The “aha” for corporations is to recognize that values and authenticity are important to this generation — and that directly affects how they spend. American Apparel, for example, has been totally embraced by youth because of its labor practices. Shopping there make them feel like they’re spending money in the right place. Companies that really “walk their talk” about cor values will be endeared. If you want to be relevant to Gen Ys, you need to understand their mindset. Understand what they’re doing — and why.

GBN: What’s the hot new thing among Gen Y trendsetters? I assume they all have iPhones...

BYLENGA: Well, iPhones are still very popular, but they’re not as cool as the MacBook Pro, which is the most powerful status symbol among our trendsetters right now. Some of them are living in squalor on 24th and Mission, eating Ramen noodles and shopping at the Goodwill – but they paid two grand for their MacBook Pro. An iPhone is nice for keeping in touch, but let’s face it, it’s yuppie accessory. Toms Shoes are also big right now. Every time we do a focus group wtih trendsetters, at least one of them shows up wearing a new pair of Toms. They’re simply designed and very comfortable, and for every pair you purchase Toms donates one pair to a child in need in Argentina or South Africa. “one for one,” they say on the box. It’s a simple mission and the shoes are hip.

Wendy Kopp is 40 years old, but she may be the ultimate Millennial. As founder of Teach for America, she understands the deep need of Millennials to make a difference in the world and has given them a way to do it. Each year, Teach for America selects about 3,700 college graduates to work in low-income public schools.

At Notre Dame, where I teach Marketing, 10% of seniors in each of the last three class years planned to join a service program upon graduation rather than accept employment or pursue a higher degree. According to the Wall Street Journal, the Fighting Irish are not unique: there has been a surge in applications at Teach for America and the Peace Corps. Teach for America saw applications jump 36% to 24,718 for its limited spots, spots that offer salaries of just $25,000-$44,000 but offer rich psychic rewards. The Peace Corps is expecting a 16% increase in applications, and is experiencing volumes last seen in the 70′s. While some of the increase is no doubt dimmer job prospects, the Journal says it is something deeper – a generational desire to give back.

According to researchers, Millennials are among the most civic minded cohort in four generations. Our own recent focus group research among new hires at major marketing companies provides confirmation: many feel conflicted about their inability to “give back” in their current job. Here’s how one responded to the question of how he feels about opportunities to give back at work:

“The last company I worked for went down to New Orleans to help with the Katrina clean-up effort.I know people really enjoyed that.In fairness, taking time out to do some good — while great — is a lot different than being in a career where each and every day you’re supporting a cause or a purpose you believe in.”

“I lead the company in a fund raiser for a battered womens shelter,something small but makes a difference.”

While some respondents were able to rationalize their work as doing good (or at least no harm), others are overt about seeing their current job as simply a stepping stone to a job that will provide more opportunities to give back. Most think that means a job at a non-profit, and lower pay.

Moderator: Do you see a tradeoff between making a difference in the world and making a lot of money?
Millennial: (There are) plenty of non-for-profits that would be fun to work for that make a difference but you can’t earn the same there.

Marketers take heed, this may be a group that is motivated less by self-interest than the common interest. How refreshing. How Millennial.

Talk about an unlikely product for a Millennial target. Yet this campaign seems to be to be a direct hit for the give-it-to-me-straight-but-don’t-bore-me Gen Y market. The billboard is from San Francisco. The web site, nograpesnonuts.com, is worth a visit: clever, charming and highly entertaining. (I actually watched it for 15 minutes) How to describe it? Stephen Colbert at his most deadpan? The Apple guy doing stand up? The message has inherent appeal: Grape Nuts, despite the unlikely sounding name, is just what it says it is. The campaign makes you think, which makes it advertising for the advertising averse. A++

“My sister is 32. We believe them to be generation X, but it’s not that many years apart,” said Giacomo Abrusci, 26, an American Chemical Society project coordinator. “But they managed to get through their education without technology.My sister thinks she’s in gen X, but she’s also super into Facebook and MySpace.”

Ways to ‘define’ — rather than label — this generation include politics (liberal), social views (community oriented, tolerant), academic (lots of degrees) or lots of debt (to pay for the degrees). Ultimately, what will matter most to marketers is how the Millennials label themselves. Boomers considered themselves the ‘Me Generation’, a label Pepsi was able to leverage and exploit. Gen X’ers see themselves as entrepreneurial and independent, a self-image luxury marketers are doing their best to leverage.