Starbucks appears to have hit it right with Millennials with its Dec 1 RED Event for World Aids Day. So far, nearly 580,198, people have RSVP’ed on Facebook. Whether all of them actually come and sip a ‘handcrafted beverage’ (and generate a 5 cent donation to Project Red), is irrelevant. Starbucks is already a winner just by getting that many people to raise their hand in support of the effort. At minimum, those handraisers will think twice before buying a latte someplace else on Monday. The event is only the beginning. For the next few months, all holiday drinks will also result in a 5 cent donation. There’s a Red Community site where customers can use an ‘impact calculator’ to see how their donations are impacting the world crisis.
If Monday’s event results in lines at Starbucks stores, it will owe its success to doing its its homework on Millennials. The Project Red promotion hits a number of Millennial hot buttons:
1. A worthy cause.
2. Easy to do – doesn’t require any extra effort.
3. Social – hey, let’s all go!
4. Multi-media – everything from TV to celebrities in Times Square.
5. Lots of ways to participate online and in person — even a photo op in the store.
While RED is a promotion, it feels bigger, more like a party. That’s what makes its appearance on Facebook more permissible than most commercial attempts on Facebook, and consequently something Millennials click on rather than ignore. A lot has been written lately about Facebook’s struggles to become a viable advertising medium. Perhaps Starbucks has just given us all a clue as to how to leverage its potential.
Millennials across the country will be returning home for Thanksgiving. What will they be talking about other than the pie? I strongly suspect the economic crisis will be at the top of the list.
For those in college, there will be some anxious discussion of whether it will be possible to stay there. For those out of college, jobs will be top of mind. We just completed a series of focus groups among Notre Dame students and recent alumni about their lives post-graduation. While they are overall optimistic about their future, they have immediate worries about getting a job, keeping a job, or changing jobs, depending on where they are in their career. They yearn to be independent, and want the freedom to make good choices based on what they really want to do, not ones dictated by a poor economy. Many are struggling to pay back loans.
Jessica: “My loan payment is about a quarter of my income each month, it’s constantly hanging over my head.”
Gwen: “I worry that I’ll never go back to school and I want to.”
Laura P. “More generally, my biggest worry the economy and job stuff. I feel okay about our mortgage and student loans as long as our jobs remain stable.”
Chad: “If I didn’t do what I do, i wouldn’t be able to pay my debt. And I hate that fact.”
Traditional Thanksgiving conversations about ‘What would you like for Christmas?’ will give way to ‘How can we moderate our Christmas spending and still make it feel like Christmas?’ Millennials tell us they are finding small ways to save — eating out less often, forgoing a cell phone upgrade, drinking fewer lattes, taking fewer trips. One Millennial I know has given up his car in favor of Zipcars. But they are still having trouble making ends meet.
A study from the American Savings Education Council (ASEC) and AARP shows that 91% of young adults report having financial goals for themselves, only 53% report sticking to a monthly budget. 61% feel their retirement savings is behind schedule. 42% of these young adults give themselves a grade of D or F to describe how well they are saving. Cash in a stocking is likely to be a common request.
Does this sound familiar?
“Why do those in the Millennial generation seem to have such a sense of entitlement?”
“Has anyone else noticed the “Paris Hilton syndrome” that is taking over our young people’s brains? The lust and desire for material possessions and fame increases, while the standards of hard work and creativity diminsh.”
Gen Y:
Mike: “Older people sometimes laugh when I say I want my job to have meaning.My parents’ generation… they often accept that a job is a job. (They) say my generation is spoiled — I’m spoiled — because I look for work that means something to me. They were satisfied with the paycheck. I have the luxury of wanting much more.”
Katie:
Justin: “I often play the work/life balance card to work from my girlfriend’s apartment in DC for a day so I can have a long weekend. It is critical to have the balance (between work and life) and I will demand it or find a new job.”
The first comments came from the web. The Gen Y comments are from the transcripts of a series of online focus groups we conducted among young professionals last spring. The general theme was that my job isn’t big enough for me, I want more from my job than just a job. Millennials feel prepared to make a difference.
Managers interpret this yearning for ‘more’ as over-ambition and unrealistic expections. The biggest frustration I hear when I speak with managers about their Millennial employees is an inability to meet high expectations on the job. Managers feel pressured to give young workers more responsibility, more praise, more rewards, faster than they feel comfortable. One senior brand agency exec I spoke with last week described his anguish over having to fire a talented and promising young Millennial because he was exhausted by the constant demands for more responsibility that he didn’t feel the employee was ready to assume.
One generation’s idea of ’spoiled’ is another’s idea of ‘better prepared’. Here’s blogger Cliff Mason’s response to a review of Ron Alsop’s new book, “The Trophy Kids Grow Up.” Cliff blogs for CNBC at MillennialMoney.
“We all know the rap about us so-called millennials: we’re spoiled, we have entitlement issues, we think we’re better than everyone else, we have unrealistic expectations about entering the workforce. Apparently we were coddled too much by our parents and teachers, or at least that’s what the baby boomers keep telling me…..At the end of the day the millennial generation is better educated, more adept at using technology, and much more media savvy than generation X or the baby boomers. Maybe we feel superior because we actually are?”
I may have to agree with Cliff. At the very least, it’s worth giving him and his generation the benefit of the doubt. After all, it may be true!
Millennials spend 12-14 hours a week online searching for information, watching video, updating their profiles and messaging their friends. They are confident “neti-zens” who have never known a time when up-to-date info about friends, grades, tonight’s biology homework, favorite political candidates and the latest SNL episode wasn’t instantly and freely available.
It’s worth understanding what they like online now, because Millennial’s online tastes are very influential. According to Deloitte’s 2007 State of the Media Democracy Survey, word of mouth is the most common reason for Millennials to visit a website. When they find a particular television show or website that they enjoy, they tell an average of 18 people, compared with only 10 people for all age groups.
So what online brands are hot with Millennials today? New research from Outlaw Consulting among 100 hand selected Gen Y Trendsetters sheds some light. The biggest surprise here is that there are no real surprises here. Facebook is number one, even among trendsetters, who at the beginning were vaguely uncomfortable doing something so, well, popular. It just seemed so vain. That apparently has changed however, due to the ubiquity and ease of use.
>”Facebook has become more of a fact of life, a way to communicate and schedule events—consider it this generation’s version of Microsoft Outlook, but with an emotional side. “There is an entire army of friends who I don’t see regularly but still care about. It means a lot to automatically be able to see their photos from time to time, and keep abreast of who’s where. Facebook provides a warm blanket for me. It makes me feel more connected, less alienated.”
In our research with recent college graduates, we learned Facebook has become essential for remaining in touch with newly scattered friends. While the Facebook habit is strongest among those who actually used it in college (those who graduated less than 4 years ago), we expect the trend to continue.
Other popular trendsetter sites pose similar paradoxes. Ironically, trendsetters want to tap into the ‘wisdom of crowds’ available, where else, on EBay, Yelp, Wikipedia, Craigslist.
“There are tons of different opinions on there, but you can sift through and get a feel for the truth. I don’t know what I did before Yelp.” “Whenever I have an item in mind, I check eBay. It standardizes the pricing. If you want to know what the public thinks an item is worth, eBay will tell you.Gen Y trendsetters will gladly sacrifice 100% accuracy for direct access to the public’s version of reality, whatever it may be. They believe they know when to trust sites, and when to seek another source. In the meantime, they credit these sites with doing no less than changing their lives. The model of the open platform giving voice to a crowd will be close to their hearts as this generation comes to power.
The rest of the list is equally unsurprising. CNN, NYT, Netflix, Amazon, YouTube, Flickr and Pandora round out the list. Where are the obscure, the trendy, the not on the map ideas? Perhaps that is the big finding. The Internet, arbiter of every personal whim and taste, may be more mass than we even suspected.
It may be the first true “millennial” play. “Speech and Debate” by Stephen Karam captures the Millennial point of view, right down to text messaging and blogging as important elements of the plot. The story features three earnest, tech savvy high school senior misfits who find each other on the web through a serendipitous convergence of, ahem, interests. They find themselves weirdly entwined and move awkwardly toward a deeper mutual understanding in an ending that surprises us all. The repartee is fast and witty and very 2007. The portrayal of the relationships between the three main characters and their relationships with teachers and reporters, is hilarious and very much in line with how Millenials view Boomers – quaint, clueless and easily to run cirlces around.
The play debuted late last year off-Broadway in New York and has also been staged in Chicago and on the radio. I heard a production on the radio Saturday night by LA Theatre Works. It is reportedly being produced as a movie. If that is true, I predict it will be bigger than Hamlet 2 and Juno.
Nielsen reported monthly hours of viewing for all age groups (see below) in May 2008 in it’s “Third Screen Report”. You’d have to be blind not to notice the age differences. Based on this and other TV viewing reports, I have a theory about what is happening to TV viewership among Millennials. It goes like this:
1. Appointment-style primetime TV viewing habits are pretty much dead, even for ‘destination shows’. According to Millward Brown, nearly half of Millennials (45%) use a DVR ‘regularly’ or ‘fairly often’ and another 25% say they are considering buying one in the next year. The Heroes season opener derived 33% of its viewership from time shifted viewing.
2. Primetime viewing is largely social. According to Knowledge Network, 39% of Millennials watch primetime outside of their own home at least once a week, compared to just 11% of young boomers and 21% of Gen X’ers. I presume outside of home means other people’s homes, a gym, bar or other social gathering place. 55% watch primetime with other people in the room, vs. 41% for young boomers. This suggests other technologies have a stronger claim on Millennials’ ‘alone’ viewing time than primetime TV, another signal (pun intended) that TV is becoming marginalized for ‘right now’ viewing.
3. Internet video is becoming a reasonable alternative to TV for personal viewing. Over one quarter (27%) of Millennials go to websites to watch video vs. only 9% of boomers (Millward Brown). According to Nielsen, 18-34 year olds spend an average of 3-4 hours a month watching Internet video. My college-age daughter loves Masterpiece Theatre, but does not feel compelled to watch the latest episode at 9:00 on Sunday night when she can view it anytime on the web. My high school age son is as likely to watch a movie he downloaded to his laptop as TV or a DVD. I can’t recall the last time he purchased a DVD. He is very interested in Apple’s iTV. (Is that the next ‘must have’ Christmas item?)
4. The so-called ‘third screen’, mobile video, may move to second place soon. Nielsen reported that as of May 2008, 18-34 year olds with video enabled phones viewed video this way 3-4 hours a month, a figure similar to that of video on the Internet. Younger people with video enabled phones watched even more.
While the changes now are mostly confined to Millennials and their younger siblings, you only have to think of the explosion in text messaging to know it won’t be long before their parents follow. If these patterns hold, we are moving toward a model where the venue is less important than the content. Soon, it will all be simply ‘video entertainment’, with viewing devices presenting alternative formats for watching the same stuff. Each format will offer different advantages in the user experience, but the same content. In that world, does it even matter that Heroes and SNL are on NBC? From a branding standpoint, channels simply won’t matter. It will all simply be ‘video’.
What a great time for first-time home buyers, right? They have the good fortune to buy at what may be close to the market low (we hope) without having to sell at that same low point. Well, as usual with Gen Y, it’s not that simple. While the average age of first time home buyers is 26, realtors shouldn’t expect waves of Millennials to be knocking on their doors. While the under 30 set may enjoy high incomes and high hopes for future earnings, both their attitudes about homeownership and the reality of high debt are certain to impact their likelihood rushing in to snap up real estate deals.
First is attitudes. Millennials do not aspire to the homes many grew up in. They see a big backyard and lots of square footage as a maintenance nightmare. Smaller living spaces and open space floor plans are likely to be their preferred way of life, for environmental as well as lifestyle reasons. The NewsObserver recently interviewed several Gen Y members on their dreams of homeownership. Here’s what they said about the desirability of living in a big house:
Stephen: No. I want a smaller space so it’s easier to take off and go. A house that’s low-maintenance is good. Generation Y traveled a lot in college and will continue to do so through life. So a big yard isn’t a plus, either.
Ryan: No. I think that seeing so many of our generation’s parents divorce makes us understand that family togetherness is important. So as we start having kids you will see us avoid homes with a living room, family room and finished basement rec room in favor of open-plan homes where the family can share space.
Carrie: Definitely not. The huge space thing as a status symbol is gone. Well-used efficient space is best. I want a house that reflects who I am and where I’ve been. In big houses, people buy meaningless stuff just to fill them up. Living in a cookie-cutter subdivision with vinyl siding and no trees is not palatable to me.
Second is finances. Even if they aspire to home ownership, it’s harder now to amass the necessary down payment of $30,000 or more. It’s been widely reported that the average college debt is $20,000. Many struggle to pay it back, while making ends meet. Many still accept support from parents. Higher income Millennials in our focus groups, those with MBA’s and good paying jobs, tell us of staggering college debt loads — $60,000 or even $80,000. While these civic- and community-minded young adults are motivated to dontate to their college and other causes they believe in, they sheepishly admit it just isn’t possible right now.
Add inexperience in budgeting and planning, credit card debt and the uncertainty of the job market, and the picture becomes even more grim. Consider these statistics from MSN (Why Gen Y is Broke):
The median credit-card debt of low- and middle-income people aged 18 to 34 is $8,200
People between the ages of 25 and 34 make up 22.7% of all U.S. bankruptcies (but just 14% of the population at large).
While the facts are sobering, Millennials are cautiously optimistic rather than dismayed. They have the long view, and are confident in their skills and abilities. As one young potential home buyer shared with me, ‘With so much for sale, we can afford to be picky right now and get a really great deal.’
For most college students, text messaging has replaced email and talking as the preferred mode of communication. ExactTarget’s 2008 Channel Preference Survey of 1,500 internet users ages 15 to 65 shows those under the age of 25 prefer SMS to both email and instant messaging.
Text messaging combines the mobility of a phone with the instant gratification of IM. According to an Opinion Research Corp study, those under 30 are 4 times more likely to respond immediately to a text than an email and 91% of text messages receive a response within one hour.
Who are they talking to? Friends of course, but according to a study by Sprint, 51% are texting their parents. Fifty-seven percent of 50-64 year olds have children in the 18-24 age group, so it’s not surprising that Boomers are texting their college age students for a quicker response. (Certainly this is true in my family. My text messaging use has skyrocketed since my daughter left for college in August.)
But marketers should not expect to be making much use of texting as a medium for reaching college students with marketing messages anytime soon. Millennials are strongly protective of their text messaging lives. In our research, they repeatedly tell us non-personal messages — even messages from their university — are not welcome. Likewise, Exact Targeting says College Students “believe private communication channels (e.g., SMS, social networks) are off-limits for marketers. College Students want to keep personal and business affairs separate. Marketers should remember that email is the channel for “official” communications.”
Okay, so it’s not big news. The Obama win shows how influential young voters are in politics. Research from Rubicon Consulting group shows how influential they are in marketing. Rubicon’s report, “Online Communities and their Impact on Business: Ignore at Your Peril” provides these statistics on just how important they are:
About 80% of the user-generated content on the web, including comments and questions, is created by less than 10% of web users, a group we refer to as the most frequent contributors (MFCs). The rest of the web community sits back and watches the interactions as a mostly-passive audience that only occasionally injects a few comments”
Half of all MFCs are under the age of 22.
MFC’s look a lot like Millennials: They’re more ethnically diverse;
more technically skilled; more likely to be single; more likely to work in technology, entertainment, or communication companies; and more likely to be Democrats.
The Rubicon report emphasizes that far from being a problem to be solved, the fact that most web communities are dominated by a few active voices and a lot more ‘voyeurs’ is something marketers can leverage by targeting MFC’s. There really are influencers – a lot of people are reading the opinions of MFC’s and using them in their purchasing decisions across a variety of product categories, especially electronics, vacations, movies, restaurants and jobs. The chart below shows that this is especially true for Millennials. For nearly every category, the influence of online word of mouth is strongest for those 18-22.
