As a college professor, it’s easy for me to forget that not all Millennials are college students or graduates. In December, I called attention to a recent Mintel Market Research report (Oct 2008) that notes college students are just 15% of the 71 million young adults 18-34 in the U.S. The report says ‘Affluent Young Adults’ make up another 19%. The remaining two thirds are what Mintel calls ‘Minimalists’ or ‘Unpowered Young Adults’. These groups are quite different in their demographics, buying habits and general outlook on life. The large number of ‘Minimalists’, and their aggregate buying power, make them critically important for marketers to understand.
A new report from Tufts University (“Youth Demographics – Youth with No College
Experience“) provides an even more detailed picture of the education divide among Millennials. The report focuses on young adults 18-29 years old. Like Mintel, the report reminds us that non-college educated young adults represent a sizeable opportunity for marketers. The rate of college education among 18-29 year olds has increased steadily since the 1960’s, yet today only 52% of all young adults have at least some post-high school education.
The Tufts report rebuts one of the the most widely shared views of this generation, it’s civic-mindedness. According to the report, this trait is a function of education. Those who have no college experience are significantly less engaged on 10 different dimensions, from voting, to volunteering to membership in clubs or unions than their college educated counterparts.
In the Presidential primaries and caucuses, young people who had college experience were 18 percentage points more likely to vote than their counterparts with no college experience (25% and 7%, respectively). In the general election 70% of young people who voted had at least some college experience. Comparing non-college youth to full-time college students and people with bachelor’s degrees would produce substantially bigger gaps.
The education divide is apparent in other ways as well. Non-college young adults are more likely to be unemployed. Census data through March 2008 shows the unemployment rate for 18-29s with no college experience was 13.6%, while only 4.5% for those with some college. Interestingly, they are equally likely to be married.
What makes all this especially interesting is that another Tufts report (“Civic Engagement and the Changing Transition to Adulthood”) says it wasn’t always this way. In fact, they believe that there is a generational shift that is increasing the divide between those with and without college educations. This report argues that “life has changed dramatically for people in their 20s. Marriage, childbearing, financial independence, and other aspects of the “transition to adulthood” have been transformed since the 1970s, and are now very different for people with and without college educations.”
Most disturbingly, they conclude that young adults without college experience are permanently missing some aspects of civic engagement–such as group membership–that were common thirty years ago. While this has obvious implications for society and policy, it also is important context for marketers. We must keep in mind that there is great diversity among 71 million people, and generational shifts we see among the college educated, like civic-mindedness, may not hold for everyone.
This chart was taken from Pew’s Internet’s just released report, “Generations Online“. It does a great job of comprehensively mapping out the differences in online usage across age groups. A graph is worth a thousand words so I won’t spell out every observation here (click the chart to enlarge), but it’s interesting how each generation has its own defining way of using the web. For teens it’s gaming, for Gen Y it’s video and social networking, for Gen X it’s online shopping. Also of note, is how many activities they have in common.
Microsoft just completed a study in January that concludes, predictably, that “Automakers Should Turn to Technology to Target Millennials“. While not a ‘newsflash’, it is nevertheless interesting to know that Millennials want to connect with car companies through IM (56%), company blogs (74%) and mobile alerts (52%) about new car releases and price drops. Fifty-two percent said they would use self-service kiosks or mobile devices at the dealership rather than talk to a real person. My hunch is that most Millennials would never set foot in a dealership until they were fully armed with all the comparison shopping information they need.
One of the more interesting, and somewhat less predictable findings, is that “44 percent sought to network with other auto enthusiasts through automotive company-supported social networking sites, Facebook or MySpace groups….Large percentages of millennials report they will seek advice from third-party consumer Web sites (65 percent), third-party consumer blogs (45 percent), friends or colleagues via social networking sites (61 percent), and friends and family (87 percent).”
Mercedes Benz is using social media to connect with Millennials. The site is called “GenerationBenz.com“. Launched in December, it requires a pass code to enter and provides moderated discussions with Mercedes employees and other enthusiasts. The community is still small but credit goes to Mercedes for reaching out to Millennials this way. Scion offers similar community tools for owners and prospects.
Personally, I think the main barrier to Millennials purchasing cars is not technology, it’s financing the new purchase and reducing the risk of not being able to pay back the loan. Ads for Hyundai’s ‘Assurance’ program guaranteeing to take back cars if the owners lose their jobs are likely to catch the attention of many Millennials when they air on the SuperBowl this weekend. While not specifically directed to Millennials, the Assurance program message is sure to resonate: According to MediaPost:
Two ads for the Assurance program carry messages like: “In times like these, buying a new car is a big commitment. So what about the company selling it to you–how committed are they?” and “Whenever you buy a new car, you have to sign a contract. But what about the company selling it to you? Where’s their signature?” The ads direct viewers to HyundaiUSA.com for details.
My recommendation to the automakers: focus less on the technology and more on making a car purchase seem realistic and smart. One Millennial friend of mine tried using Zipcar, but gave it up as unrealistic. A creative offer for ‘car sharing’ or pooling with a friend or roomate might strike the right tone?
picture from thedigeratilife.com
If you listen to Millennials, it’s an easy decision not to send commercial messages on their mobile phone. Most Millennials pay for their text messages. As Marty Predd, Research Associate at Brand Amplitude puts it, “They ration text messages like bread in WWII”.
Yet, SMS has powerful potential for delivering just the right message at the right time. The sheer volume of text messages is impressive. In Q2 2008, the average text messager sends or receives an average of 357 text messages per month, the average teen, 1752 messages a month. That’s more than the number of phone calls. (“Realizing Potential“, September 2008).
What about advertising messages? The numbers here are also impressive. Well over half of all U.S. cell phone users have a text message plan and 16% of texters in the U.S. see some form of text-message advertising each month. (The number shoots up to 35% for teens). Consumers are not only seeing text message ads, Nielsen says 45% have responded in some way. The most popular response to mobile advertising (text, video, Internet, etc.) is sending another text-message; one-quarter of responders sent another text-message. These figures make a compelling case for figuring out how to overcome Millennial’s barriers to text marketing messages.
There are some successful cases worth looking at. A subsequent Nielsen report (“The Short Code Opportunity“, Dec. 2008) points out that President-Elect Barack Obama’s “V.P. pick” text message remains the most notable example of short code marketing in the U.S. In August 2008, the campaign attempted to announce Joe Biden as the vice presidential candidate over SMS text message. Nielsen estimates that the Biden text was received by 2.9 million mobile phone users in the U.S. over the course of that weekend. The next most prominent example of a text message-based effort is is Coca-Cola’s My Coke Rewards program. This program had engaged 1.1 million AT&T and Verizon Wireless customers as of Q3 2008.
“Through My Coke Rewards, Coca-Cola customers collect unique codes found on various Coca-Cola products and enter them into an account they’ve registered at mycokerewards.com. When they reach certain point levels, they are able to redeem points for rewards. The mobile component of the program allows consumers to enter the codes over their mobile phone on the go. Coca-Cola’s mobile users typically send and receive about 32 messages a month to Coca-Cola.
Importantly, it’s not just kids or teens who are an active audience for short code marketing. In the Coca-Cola example, nearly half (47 percent) of users were 35 or older. That age diversity is not unique to Coca-Cola either. Overall, 53 percent of those engaging with free (standard rate) short codes, such as those used by brands in marketing, are sent by texters 35 and older.”
Subway, Arby’s, Jiffy Lube, BestBuy, Papa Johns, Village Inn, and other major brands have also provided special offers through text and multimedia messaging.
Papa Johns, Domino’s Pizza and Pizza Hut all allow customers to register ordering details online and then order pizzas over text message. Nielsen estimates that 552,000 AT&T and Verizon Wireless subscribers texted with Domino’s Pizza, 279,000 texted with Pizza Hut and 182,000 texted with Papa John’s in Q3 2008Foot Locker sends special offers to its “VIP program” participants—they sent those texts to approximately 306,000 AT&T and Verizon Wireless subscribers in Q3 2008.
Subway’s FRESHBUZZ service allows Subway customers to receive news and promotions via text message. Nielsen estimates that Subway sent these sandwich deals and news flashes to 212,000 AT&T and Verizon Wireless subscribers in Q3 2008.
Short codes are not limited to brand marketing. Traditional media is also using text messaging to enhance participation (e.g.“American Idol”). In radio, Nielsen’s tracking of short codes showed more than a million transactions in 2Q 2008 with the short code “A-L-I-C-E” (or 25423), a short code assigned to the station Alice 97.3 KLLC-FM in San Francisco. Alice listeners are invited to send text messages directly to the studio to make requests, win prizes, and enter polls.
Given Millennials adamant stance against text message ads, any marketer considering using SMS should take a cautious approach and make sure that the messages are both useful and welcome. But these marketers have shown it can be done.
(video from DigProjects)
The financial crisis of 2008 to ??? may turn out to be the defining event of their generation. Todd Woodward, a savvy Millennial Marketer, believes the crisis may be the event that distinguishes Millennials from the generation immediately following behind them. No doubt the childhood experiences of today’s middle schoolers and younger children will be quite different; the Millennials were the children of plenty and the next generation will likely be the children of scarcity.
So how will Millennials cope with the financial crisis? Last week I suggested that they are unlikely to make immediate or drastic changes in their spending habits (or savings) because they already consider themselves cash-strapped. Here are a few more predictions:
1. Many will return to school. According to GMAC’s 2008 Application Trends report, “economic changes and GMAT test-taking patterns suggest that the highest level of growth in (graduate school) application volume may occur next year (2009), after which a slowdown is likely to begin.”
2. Many will seek alternative jobs in the not-for profit sector. With career advancement iffy, many will decide to focus on other ‘rewards’ for working. Making a difference is a key Millennial value. Many will reason that there will never be a better time to try. GMAC’s annual Corporate Recruiter survey (11/09) says “Overall, salaries for 2009 MBA graduate hires will likely remain at the 2008 level. Yet, the majority of nonprofit and government organizations as well as energy and utilities firms plan to increase average annual base salaries for new MBAs in 2009.)”
3. Many will try to supplement their income with side jobs.. Instead of spending less, Millennials will become creative about generating income from what 26-year old Arneta in the video above calls ‘a side hustle’. Arneta styles hair, her boyfriend makes videos. She believes many Millennials will become more entrepreneurial, and so do I. As she points out, a side hustle not only generates income, but also provides experience.
4. Many will redirect their careers. An article in today’s Wall Street Journal (“Summer on the Street, Before the Fall“) describes the lives of three summer 2007 interns at Morgan Stanley in New York. Today only one is working full-time at Morgan Stanley after graduating in May. The others? One delayed his graduation from Rutgers to take more business and accounting courses. The other had a subsequent internships at Lehman Brothers in the media-relations department and now has a wedding and fashion photography business. I expect to see students in the MBA program at Notre Dame who might before have been fixed on finance careers start taking a harder look at marketing and management.
5. Many will move back home. Helicopter parents will continue to provide a social safety net for Millennials in need. And Millennials will not feel uncomfortable about moving back in with Mom if it comes to that.
6. Some will sign up for military service. Time magazine reports (2.2.09) that the US military surpassed its 2008 recruiting goal. A total of 184,841 new recruits were added to active duty service with the National Guard recruiting the most and overshooting its goal by the most. Second in line was the Army Reserve.
As this very cool video from Nokia demonstrates, the so-called fourth screen ‘changes everything’ by bringing the big screen to your pocket. If you want impressive statistics on global market for mobile youth marketing, look no farther than “The Mobile Shift” a slide show by Graham Brown at Mobileyouth.org. A sample: “By 2010, American mobile owning youth under 30 will number 100 million. The USA is the most valuable mobile youth market in the world currently producing 17% of the world’s total telecoms youth revenue, or $48 billion per year.” (Reminder, 2010 is next year!)
However, understanding how to make mobile youth marketing acceptable to youth is harder. In focus group after focus group, Millennials tell us, often emphatically, they do not welcome commercial messages on their personal phone — especially if they have to pay data or text messaging charges to receive them. What’s a youth marketer to do?
For clues to making mobile marketing work, I turned to some youth bloggers.
1. Arielle Patrice Scott: 19-year old blogger, Arielle Patrice Scott, a student at Berkeley and entrepreneur, recommends meeting your target in person, then continue the conversation digitally.
You really only need two marketing methods to establish long-lasting relationships with Gen Y. The first is face-to-face communication and the second is social media.
It’s really simple.
You use face-to-face to introduce yourself. You use social media for building and maintaining our friendship.
Face-to-face marketing refers to any form of guerilla, event or physical interaction communication between you – the brand – and us. The key is you want to make a great first impression and ask for permission to get to know us better, almost as if you’re looking to go on a second date.
Social media is the most effective for keeping in touch and afterward, it’s the perfect medium recommend your products to us. We already know you and are looking forward to your messages at this point. We are ready to get to know you.
2. Josh Kowitt: Arielle’s insight no doubt accounts for the presence of campus ‘ambassadors’ for brands like Apple, Red Bull and more. Taking the brand to the target is also expensive and fraught with pitfalls, as Josh Kowitt, the 24-year old entrepreneur behind College Boxes, explains in his guest entry for the blog, ‘Big Brand on Campus’ . Just giving something away free at a fraternity party does not guarantee you will be noticed or loved. Josh suggests carefully selecting the venue to ensure students will be present who will value your effort and spread the word to others.
3. Benjamin Leis: Benjamin Leis is the Millennial blogger and entrepreneur behind Big Brand on Campus. He describes a campus appearance by Havaianas Sandals that made the transition to digital successfully, to his great surprise!
Upon learning about the Havaianas’ Color War Campus Tour I joined their Facebook page and posted a complimentary comment on the wall. A few days later I was thanked by the page administrator/brand ambassador for 1. becoming a fan of the page and 2. “participating in the community”.
I was shocked. I am a fan of over 15 business’ Facebook Pages and I have never once received a personal message from any of them. The representative then went one step further and asked me for my sandal size and mailing address. SHE WANTED TO SEND ME A FREE PAIR OF HAVAIANAS!! Now that is remarkable! I have told just about everyone I know about this. It is super low cost marketing. The cost of postage will probably rival that of the manufacturing cost of the sandals themselves. Divide that by the number of people I have told and you have an incredible word of mouth marketing metric.
Ironically this wouldn’t be remarkable if it weren’t for the status quo, so that is something marketers should be aware of as well.
4. Tyler Reed: Tyler Reed, 20 is the founder of Younique and Project Wolf. Tyler suggests that mobile advertising should be location-focused, even if it is not triggered by a location search, per se.
Why is location based advertising so special? Once again, it ties in with being able to target people who looking for specific information at or withing a specific location. Therefore if advertising is location relevant or specific, it has a greater chance of being more relevant to the person. Even if they are not performing a search, information that is location specific to the person’s current position can be just as relevant.
Next time: Effective mobile media campaigns.
In a word, no. Or let me modify that, I don’t think so. Millennials, like everyone, are feeling the pinch of a shrinking economy and collapsing financial markets. Yet there are indications Millennials may not be pulling back to the same degree as everyone else. Individually, none of these indications would be definitive. Together, they suggest Millennials will keep spending:
Our focus group research last week suggests they are still interested in imported beer.
An Ad Age-commissioned survey (1.19.09) shows younger coffee drinkers are the least likely to report they are cutting back on expensive lattes. “Those who have scaled back the most since the beginning of the year…are consumers 45 to 54, with fully half (50.4%) saying they have “cut back a lot” on fancy or expensive takeout coffee. That was followed by consumers 35 to 44 (37.5%) and 25 to 34 (33.3%).”
This week BIGresearch predicted Millennial-favorite retailers Aeropostale, Hot Topic and Buckle “are almost certain to see an increase” in sales in 2009, based on indications from their survey panel. (Wal-mart and Fred’s were the only other retailers in this category.)
What’s going on? My guess is that Millennials are already accustomed to thinking of themselves as cash strapped, so the crisis is unlikely to bring any real change in behavior. Every college student I know is convinced he is ‘poor’. Recent grads feel burdened by (very real) college debt and young marrieds/parents are chronically short of cash. This is good news for Millennial marketers who have long understood that ‘luxury’ is not a word designed to appeal to the Millennial mindset. Millennials always think of themselves as ‘value’ shoppers, even as they opt for expensive brand-name apparel and electronics. Apple will continue to thrive, despite the fact that a $649 Dell provides the same functionality as a MacBook at twice the price.
Judy Hopelain, describes in her blog, Retail Hits and Misses, her experience shopping for a formal dress with her 16-year old daughter. I think it perfectly captures the Millennial mindset, spend carefully, but spend!
There were deals to be had. We started out at Bloomingdale’s and after trying on a dozen or so dresses, found one by French Connection she loved but was a size too small, and had them hold 3 others while we went to look elsewhere. She was concerned that someone else would show up in the BCBG dress she put on hold. A group of 15 girls all agreed to post pictures of their dresses on Facebook to prevent duplicates (GREAT IDEA!), but the whole school is not part of the plan, so she couldn’t be sure. BCBG seems to be the favorite of high school juniors and seniors, and apparently two girls wore the same BCBG dress last year. The horror!
So, we worked our way through the mall. The favorite dress on hold at Bloomies was on sale at the BCBG boutique for 30% off – and the store was filled with girls from our high school. So, despite the discount, which put the dress closer to the price I had in mind, the dress was off the list. The whole brand was out. We ended up finding a totally unique dress in a London boutique called Reiss – no way would anyone else have that dress. It was marked down 75%, which put the dress comfortably in our price range. So, we bought it, and a great looking pair of sandals to go with. Later, at home she went online and found her size in one of the dresses she’d tried on at Bloomingdale’s that was a size too small at LolaBoutique.com. What to do? Like lots of people, we are cutting back and watching our spending.
She came up with the plan – return the sandals since she realized she already had shoes to go with either dress. Return the dress to Reiss. And since the dress online was still slightly over the price I had in mind, have her pay the difference. Oh, and let her run around and handle the returns herself.
Moderator: Anything else help you get ‘away’ from it all?
Kevin: when im stressed, I usually grab a beer and watch some family guy dvds…thats the only way i can be happy again lol
Matt B: I second the family guy dvds 
Gregg C: Family Guy is a great stress-reliever
James: ps3, and yes to The Family Guy.
This exchange happened yesterday in an online focus group about beer. All of these guys are 25-29 years old, young professionals, some married, some not. Why has Family Guy become the ‘escape’ of choice?
Upon investigation, I became aware of how what I have been missing. The Family Guy is a cultural phenomenon.
There are six boxed DVD sets, one for each season. The Family Guy has sold over 5 million combined DVD units, making it the fourth-largest TV series seller ever.
The Family Guy series won 3 Primetime Emmys. IMDB.com lists another 7 wins & 26 nominations. . It has set viewership records on Fox’s Adult Swim block.
A Facebook application with over 55,000 subscribers.
There was a ‘live’ show at Carnegie Hall in November 2008.
There are several Youtube clips with 5-8 million views.
After watching a few (Puke-a-Thon, Stewie Beats Brian, Electric Man), I am baffled. These are not only not funny to me, I don’t see how they could be funny to anyone else either. Perhaps that is the point? If I liked them, perhaps Millennial Men would not? Oh, we also did a focus group among 25-29 year old Millennial Women; The Family Guy never came up.
This week I lost another kid to Facebook. Like most Millennials, my 18-year old daughter has been addicted for years, but my son, who just turned 15, had so far found it uncompelling. No longer. This week, he went from just a handful of friends to over 140 friends. Like his sister, he now spends hours uploading photos, posting remarks on friends’ walls and making new connections.
According to Gallup poll data, there are dramatic differences in amount of time spent on the internet by age group. Those spending at least one hour a day drops steadily with each successive age group, from 62% for Millennials to 24% for their grandparents. (See chart) If my kids are any indication, the ‘Facebook Effect’ is a large part of the difference. (My dad likes his computer, but doesn’t know what else to do once he’s done with email).
According to Nick Burcher, who follows Facebook and other social media site usage, Facebook’s U.S. user base grew from 27.8 million users in July to 42.0 million in December, a 51% jump. Internationally, its user base grew even faster. Altogether, Facebook added an eyepopping total of 47 million new users in the last 6 months of 2008. The largest non-US user bases are in the English speaking Canada and UK. (For more on international use of Facebook relative to Twitter, see Brendan Mitchell’s Jan 11 blog post.)
There is no doubt that Facebook dominates the lives of many Millennials, but whether this pattern will continue indefinitely is still up for debate. In our research among young adults we are starting to hear some reservations about Facebook as the end all be all social network application. While Twitter is not really registering yet among young professionals we talk with, we are hearing that they think of Linked In for professional use, and fear that their Facebook profiles may come to haunt them as they advance in their lives and careers.
Now that we are finally done hearing reviews of the top TEN younameits of 2008, we are enduring endless top TEN predictions for 2009. Given the shocks of 2008, wouldn’t it be great to go into this year with some clue as to what might happen? There seem to be two approaches to seeing into the future. One is to tap ‘experts’. However, expert predictions are notoriously unreliable, as this video from 1930 speculating on fashions of the year 2000 reminds us. (It’s interesting to note, however, that many of these predictions are not that far off the mark — men do carry a lot of gadgets and women’s 2009 fashions do feature the ‘transparent’ look).
The other approach to future-sight is to observe what ‘trendsetters’ are doing. After all, every trend has to start somewhere. Something those who prize ‘newness’ for newness’ sake is likely to go mainstream. Of course, there are pitfalls here as well. Who exactly is a trendsetter? And which of their quirky choices will cross over to the rest of us?
According to Outlaw Consulting, there are two ways to approach trendsettter research. One is to identify “attitudinal leaders”, individuals with ‘broadly aspirational lifestyles’. Often these individuals can articulate the shifting values of their generation and provide ideas about larger societal trends. The other way is to seek out “category leaders”, individuals who are highly involved and ahead in one particular category, such as fashion, media, music, night life or alcohol. Within each category, there are degrees of ‘forwardness’ from cutting edge ‘initiators’ to slightly less forward ‘influencers’. While a cutting-edge fashion initiator makes her own music and clothes, and reads underground blogs created by his friends, the influencer, may be just one step ahead of the mainstream buying the latest styles in the mall, only to be copied by all of her friends.
Knowing what trendsetters are doing is only the first step. The second step is determining which of their choices, tastes and interests will go mainstream. This requires research among early adopters or even late adopters, with a keen ear for ‘underlying motives’ that may lead these mainstream consumers to adopt the more forward trend. Here is how Barbara Bylenga at Outlaw Consulting describes it:
The key to accurate prediction is understanding the mainstream’s barriers: do they reject the trend because of a soft barrier that could weaken over time? (Soft barrier example: “I don’t like to spend a lot on things like that.”) Or is the barrier deeply ingrained in their identity, suggesting they will never absorb the trend? (Hard barrier example: “Nobody will respect me if I do that.”) … The process works because it’s thorough and intelligent, rooted in essential truths about human behavior.
Perhaps the 1930’s fashion experts were on to something after all. If human motivations remain constant, transparent women’s fashions and dedicated pockets for men’s gadgets may still be with us in 2050.
