Two news stories dominated the digital marketing world last week, the iphone lost in a bar and recovered (and reported) by Gizmodo, and Mark Zukerberg’s announcement that Facebook was opening up the social graph to developers. Of the two stories, which do you think was more interesting to my students?
It’s no contest, the iPhone, while of little lasting import to anyone but the people involved, was easy to understand. In contrast, the Facebook story, while even evoking government suspicion, was a yawner. The difficulty seemed to be understanding what exactly marketers would know and how they would use it. Far easier to comprehend is how marketers might make use of information about you based on your purchase history at the supermarket or from your credit cards. A Toronto Star article, “What the number crunchers know about you” makes this tie pretty explicit.
“People who buy premium birdseed are more likely to pay off their credit card bill than those who buy chrome skill ornaments for the hood of their care. When an airline cancels a flight, it figures out which customer it can least afford to lose and offers the next open seat to him or her.” – Toronto Star, 4/27/10
I worked hard to make the link between what marketers would know know about consumers based on their Facebook profiles and ‘Likes’. I showed them two of the first applications I know of, the “Likebutton.me” application, which puts all your likes on one page (try this if you haven’t already, pretty vivid demo of the power of the social graph) and Levi’s new “Friends Store” social shopping site. Yet students still seemed disinterested. It may be because this is the last week of classes, and the end of the year is bearing down. But I think there is more going on here than distraction.
Students don’t care about the F8 announcement because because it all seemed rather benign.
While they didn’t actually see that there was any real advantage to them in terms of offers or tailored messages, neither did they see any real threat to privacy. Neither did they see any value in knowing what movies, books or apparel their friends like. After all, as one student pointed out, it matters who is making the recommendation, as they trust some friends’ movie recommendations more than others. When pressed one student did, tentatively suggest he would be uncomfortable with this:
Joe S: “We know that as we use the Internet, that they are tracking us to some degree and that is in our subconscious. But once you hear that they are going to craft messages based on sites you visit and that you like, the information you put on your page, to me anyway it seems there’s a line in the sand that is being crossed, a little bit, that’s almost as if they know too much about me and that wall of separation between the company and the marketing world and me is kinda blurred. It’s a little troublesome I guess because it feels like there’s no way to get around that.”
However, Joe was the exception, and even his comments did not suggest strong feelings. Most students did not feel strongly one way or another. And perhaps this is what Mark Zukerberg knows and is counting on.
Are All Millennials Tech Savvy?
One of the biggest myths about Millennials is that they are all digital natives, blogging and tweeting their way through life. The truth is a bit more nuanced.
True, Millennials are some of the most avid USERS of mobile and Internet technology.
The age of first cell phone is dropping rapidly and now stands at about 9 or 10. Currently nearly six of every ten 12-year olds have their own cell phone, a figure that increases to 83% by age 17. On average, 75% of all 13-17 year olds have a mobile phone, 93% go online (76% with broadband), and 80% have a console gaming device (Pew Research).
It’s also true that Millennials rely heavily on digital media to manage their daily life activities, stay informed and stave off boredom.
Digital media so pervades their lives, they cannot imagine living without it. Digital content and communication literally enables their social lives. Some even refer to this dependency as ’addiction’.
A new study conducted at the University of Maryland asked 200 college students to give up digital media for 24 hours and write about the experience. The students’ journals, which amounted to the equivalent of a 400-page novel, were full of stories of deprivation and emotional angst. “We noticed that what they wrote at length about was how they hated losing their personal connections. Going without media meant, in their world, going without their friends and family.”
“I clearly am addicted and the dependency is sickening,” said one person in the study. “I feel like most people these days are in a similar situation, for between having a Blackberry, a laptop, a television, and an iPod, people have become unable to shed their media skin.”
“Texting and IM-ing my friends gives me a constant feeling of comfort,” wrote one student. “When I did not have those two luxuries, I felt quite alone and secluded from my life. Although I go to a school with thousands of students, the fact that I was not able to communicate with anyone via technology was almost unbearable.”
One student said he realized that he suddenly ‘had less information than everyone else, whether it be news, class information, scores, or what happened on Family Guy.”
The Maryland researchers concluded that “most college students are not just unwilling, but functionally unable to be without their media links to the world….Without digital ties, students feel unconnected even to those who are close by.”
Given this level of dependency, it follows that Millennials are adept at manipulating and adapting technology to their needs. However, this is not the case, at least for the majority of Gen Y.
The top six web sites by volume according to Experian’s Hitwise service are pretty mainstream: 1. Facebook 2. Google 3. Myspace 4. Yahoo 5. Yahoo Mail 6. Youtube. Although my students are adept at Facebook, and finding information, music and videos online, few make use of Twitter or maintain a blog. This is in line with statistics by Forrester, which shows only half of 18-24 year olds are what they classify as ’creators’. Few students make use of RSS feeds, wikispaces or other productivity enhancing tools.
A 2007 study by Northwestern professor, Hargittai on web use among so-called ‘digital natives’ reached the conclusion that there is a wide range of web use and skill levels among young adults. Over 1000 college freshman were surveyed on the frequency and diversity of their web use as well as indexed for skill on 27 variables. The study found a range of skill and use and concluded, ”web-use skill is not randomly distributed among a group of young adults who have grown up with digital media.” While some of the diversity could be explained via socio-economic status and ethnicity, much could be attributed to what the authors called ‘context of use’, which included the number of years online, the time spent online, access to a laptop and more. ”Overall, these findings suggest that familiarity with the medium is very much related to how people use the Internet and user savvy mediates some of the otherwise observed relationships of user background and online activities.”
A recent article in The Economist also questioned the assumption that all Gen Y’ers are Internet-savvy (“The Net Generation Unplugged”, March 2010).
“Michael Wesch, who pioneered the use of new media in his cultural anthropology classes at Kansas State University, is also sceptical, saying that many of his incoming students have only a superficial familiarity with the digital tools that they use regularly, especially when it comes to the tools’ social and political potential. Only a small fraction of students may count as true digital natives, in other words. The rest are no better or worse at using technology than the rest of the population.”
The article goes on to point out that according to Pew Research, “internet users aged 18-24 were the least likely of all age groups to e-mail a public official or make an online political donation. But when it came to using the web to share political news or join political causes on social networks, they were far ahead of everyone else. Rather than genuinely being more politically engaged, they may simply wish to broadcast their activism to their peers.”
For marketers, this diversity of use is a caution not to confuse digital dependency with digital savviness. Not all Millennials will be jumping up and down to respond to your latest crowd-sourced campaign, app or contest.
Many of the popular digital marketing tactics require a level of involvement and expertise may be beyond the skills of many Gen Y members on the far side of the digital divide. Far safer, and more broadly appealing, are approaches where the call to action is easy and intuitive, requiring nothing more than a working knowledge of how to use XBox, text messages, Facebook or Youtube.
I spent two exciting days at Ad:Tech in San Francisco’s Moscone Center last week, along with 11,000 other digital marketers. It was total immersion in the state of the advertising art, circa 2010. Needless to say Don Draper would not feel at home either on the exhibit floor or the speaker forums. It’s even a far cry from marketing as we knew it just ten years ago.
Interestingly, the exhibits were mostly about ‘Tech‘ while the speakers were mostly about ‘Ad’. It was as if two conferences were happening simultaneously.
First the ‘tech’. Digital technology means that ‘media’ is defined in a whole new way. It’s still about content, but that content is more targeted and interactive. A case study on the panel I moderated by Alloy Marketing (alloy.tv) and their client, LG Mobile, featured a series of 11 webisodes titled “Haute & Bothered“. The series generated so much comment thru different viral channels via YouTube, RockYou and Meez.com that it will soon begin a second season. Geoff Ramsey of EMarketer.com described a new kind of video from Coincident.tv where viewers can literally friend characters as the playing, as with this ‘hypertrailer’ for Glee. Coincident.tv has essentially developed an XML-based metadata framework dubbed Cue Point Language that makes it possible to add additional content, links or even various types of actions to any predefined point of a video.
Placement of media is also high tech. Advertising networks respond to advertiser queries in just 50 milliseconds, with the highest bidder winning exposure. The ads we see are determined by who we are, the context and what that viewing is ‘worth’ to those bidding. This targeting precision is something the Mad Men-era ad guys never dreamed of.
Finally, attention, interest, desire and action (the old AIDA model) can all happen simultaneously with digital media, so everything is measurable. We know what works instantly or close to instantly. As Sarah Fay of DMG Media, the owner of Ad:Tech, the iMedia Summits and the CMO Summits puts it, “Data is the New Black. Data management
is becoming ‘the’ key ingredient to planning and managing effective advertising program.”
On the ‘Ad’ side of ‘Ad:Tech’, creativity is center stage and ‘insights’ are the new strategy.
Ironically, creative ideas for digital advertising seem to be less about science and more about art. (In this respect, Don Draper would feel right at home!) It would appear that digital execution makes strategy, if not less important, certainly less connected to execution. Now, speed of execution is everything. In a world of instant results and low or no media cost, pre-testing is irrelevant. You can literally ‘just do it’. In his keynote, Jaime Cohen Szulc, CMO, Levi Strauss & Co. made this point explicit when he recommended strategy and execution be handled separately, by different agencies. His reasoning? Both have become ‘too complicated’ to be handled by one agency, it now takes an ‘agency network’, each ‘playing to position’ to create an effective campaign’.
I have been in marketing long enough to know that it takes both strategy and execution matter, and they work best when they work together. So I expect there to be a course correction sometime in the near future, with greater focus on both strategy and media technology. This may come sooner rather than later, once marketers realize there is little more incrementally to be gained from ever finer ways of optimizing media buys. Dynamic Logic, which has researched over 300 online campaigns for efficacy came to this conclusion in a recent report for the 4A’s. “When it comes to digital advertising, a lot of time is spent choosing Web sites, ad sizes, formats, targeting and other factors. Maximizing creative quality, is the foremost driver of ad effectiveness—even more important than targeting, ad size or ad format.”
Even in the new world of high tech advertising and media, ad effectiveness will still be determined by both media targeting and message relevance and likeability. Of the two, overall impact is determined more by the message than by targeting, even in digital media.
The (majority) opinion of my sophomore Marketing students regarding Facebook ads is that they are likely to be ignored. (April 12, “Millennials Skeptical About Facebook Ads“)
It’s not that ads aren’t welcome in social media, they just don’t register. Beyond just not getting attention, some students say Facebook ads can be a nuisance. In the words of student, George C, “The consumers’ tolerance for pestering advertisements on social networking sites is relatively small.”
The results of an intriguing research study by neuromarketing firm, NeuroFocus, revealed Facebook ads can not only be effective, they can be more effective than TV advertisements.
The commercial tested was “Trip For Life,” part of VISA’s multimedia campaign built around the 2010 Winter Olympics. (Click here to see the ad tested) Neurofocus conducted these tests for its own research purposes, not because they were commissioned by the advertiser, which lends extra credibility to the findings. The results were surprising. Facebook ad placement outperformed the TV and web site performance on overall effectiveness, purchase intent (tied with TV), and messaging. The only place TV was a clear winner? Brand perception.
Intrigued, I asked my students a follow up question, “What companies, products, and services do you think would benefit from advertising on Facebook or MySpace.com?”
Not surprisingly, students were most likely to indicate apparel brands and retailers. Their reasoning: These brands are available online and already familiar to young adults. Other frequently mentioned categories were technology, educational institutions and movies/entertainment.
Alex I: “Companies or organizations that should consider advertising on Facebook and MySpace could include: Universities, employment websites such as Monster.com and clothing stores with online shopping capabilities such as Nordstrom and Nieman Marcus. A study done by the New York Times indicated that 45% of the individuals using social networking sites were also likely to make a majority of certain purchases such as clothing and electronics online as well.”
Katie H: “Food products and clothing retailers would be good companies to put their ads on the social sites. These products rely on ad frequency to remind people to purchase the goods. The clothing industry also uses positive peer advertising to get customers. When people see a clothing line on a social site that millions of their peers use, they will be more willing to purchase the products, too. Coke, American apparel, NIKE, Inc, and American Eagle have used Facebook and other social sites to advertise to their target markets.”
Nneka E: “Nike and other shoe stores that sell common shoe brands and styles would be great advertisers for social netowrking sites because they are already popular amongst consumers. If a consumer sees a creative advertisement for a shoe style that he or she is interested in, they can go online to nike.com to place their order befcause chances are they possibly already own one pair of Nikes or are at least familiar with the sizing. Pouplar clothing store for all age groups would also be a great category for social netowrk advetising. Popular stores for men and women such as Express, Victoria’s Secret and Forever21 can benefit in a way similar to Nike.”
Sarah C: “I think the companies that would most benefit from advertsing on Myspace or Facebook would be companies that provide online products or services such as games or shopping and companies selling music or promoting bands and artists. These types of products are easiest for online customers to access after seeing an advertisement.”
Jackie B: “Companies that would benefit from advertising on Facebook or Myspace are those that meet the wants or needs of the 14-25 age group. These companies could include cosmetic products like ProActive, technology companies like Apple, other websites like SparkNotes and upcoming movies.”
Some students indicated that interest in Facebook or MySpace ads could be enhanced by targeting messages to specific interests:
Veronica B: Companies can use the location, interests, and relationship status of individuals to advertise their products and services. For example, local college and universities can advertise to students based upon their recorded location. Dating services, travel and resort agencies, airlines, banks and credit card companies, music groups and concerts, and electronics companies can greatly benefit by advertising to younger individuals based upon their recorded interests.”
Danielle D: “Some companies and products that I think would benefit from advertising on Facebook or MySpace are music companies and band promotions, Apple’s iPod, television shows and movie promotions, political events and campaign promotions and sports promotions. I also found that Facebook targets to college students that can be specific to their universities through scholarship promotions, storage unit promotions, airline promotions, “ND Off-campus housing.”
A few students indicated that Facebook has the added benefit of peer to peer advertising, although others indicated this could be ‘creepy’ or off-putting:
Alex K: “One major benefit of Facebook is that it can promote a product in the user generated content section if a user’s friend becomes a fan of the product. This creates a word of mouth added benefit.”
Parker K: ”Some companies are encouraging happy patrons to write testimonials about the product on Twitter and Facebook. With the advent of Twitter posts being displayed in Google searches, this may be a brilliant plan. If an advertisement does its job of piqueing interest, the positive testimonial can come in to finish the task, instilling desire and action.”
Tim G: “Advertisements on Facebook can be tailored to the interests that you have posted on your profile, making for a much more personalized experience with a company. However, this experience can sometimes not only be creepy, but off-putting. Advertisements for “Cute Cathlolic Singles near Notre Dame!” do not appeal to most individuals. The best advertisers will match you to your interests without the consumers’ knowledge. An ad on Facebook saw my passion for soccer and asked if I wanted better soccer coaching. The ad was personalized for me, but was not overbearing.”
Nick G: “Advertisers should consider tailoring ads to consumers based on their interests to draw more attention to the products or services to be advertised. Banks and investment companies like Chase and ETrade might benefit from advertising on the social networks as well to attract more consumer loyalty by using relationships, e.g., my friends do their banking at Chase, so I will too.“
Finally one student suggested that the more the ads look like the content that students are on social networks to see in the first place, the more effective they will be.
Claire K: With each of these different products and services, their choice of promotion should include some type of media to watch or listen to rather than requiring clicking through to another website. Viewers are on the social networking sites in order to view media and content in the first place and have no intention of searching for products by going out of their way to surf through a website. By using fun media that entertains the viewers as well as informs them of a product or service, companies can create an interest or buzz about the product. These areas or products and services are also similar and related to the media that users are viewing on the social networking sites to begin with.“
I read these responses as permission for at least some advertisers to experiment with advertising on Facebook, albeitly cautiously, and in the most targeted possible way.
While Gen Y may not welcome ads on Facebook and Myspace, they do think some advertisements are appropriate and relevant, especially if they offer an immediate way to follow up on the interest by clicking through to a web site or learning more about the product or service. Another way to add relevance is to offer entertainment value.
Much attention is paid to what Millennials watch for fun and their disinterest in printed newspapers. So, it’s easy to forget that Gen Y is actually among the biggest consumers of news.
An April study by McKinsey in the U.K. reports that the average person consumed 72 minutes of news a day, compared with just 60 minutes in 2006. They further report that the increase was driven almost entirely by people under the age of 35. ”Two-fifths of those in this age group said they felt the need to be the first to hear the news, compared with just 10 percent of people aged 55 to 64.”
In the U.S., the Associated Press (AP), a group with a vested interest in Millennials’ interest in news, released a study in March that looked at ‘news ad fatigue’. The study took an in-depth, ethnographic apporach that focused especially on people 18-34. The study concluded that consumers are “tired, even annoyed, by the current experience of advertising,” and that, as a result, they don’t trust very much of it.
Younger consumers, ages 18-34, have adopted ways of getting their news that are much different from those of past generations. Younger consumers are not only less reliant on the newspaper to get their news; they also consume news across a multitude of platforms and sources, all day, constantly. Among the key touch points in the new environment are online video, blogs, online social networks, mobile devices, RSS, word of mouth, Web portals and search engines.
Newspapers may be less popular with young adults not because they are printed so much as that they are no longer the ‘newest news‘ by the time they hit the newstand. With a smart phone in your pocket, why do you need a newspaper in your backpack? (As an interesting aside, a recent ethnographic study of the contents of over one thousand Gen Y backpacks revealed many ‘low tech items’ like pens and notebooks, but no newspapers).
At the same time, AP found, “consumers do want information relevant to their needs, as well as ways to socialize that information“.
In other words, it’s not just about being informed, it’s about the ability to share information with other people. News is another form of ‘social glue’. By it’s very nature, news is social currency for Gen Y. The AP study further concluded that where Gen Y leads, other cohorts will soon follow: ”the rest of the population is catching up to the vanguard.”
The AP study was designed to understand what ‘news’ means to Millennials and how it relates to their lives. A variety of ethnographic research methods were used.
- Participants completed a live ” journal about how they would represent themselves, focusing on what was important to them, their likes/dislikes, values and philosophies, as well as who and what made up their social networks.”
- In the news realm,” participants described what they considered to be news, how they defined newsworthiness, the influence of platform and channel on their personal definitions of news, their preferred means for accessing the news and how and when they themselves disseminated, or shared, news.”
- Participants were also asked to choose a news story they would typically follow and then track it over the news cycle. A debriefing session asked questions about why they approached the story they way they did, their choice of sources, etc.
- There were also ‘day in the life’ exercises, using cameras and blogs to get ‘in the moment’ close to decisions about what to read or listen to and what to share.
The report takes the form of a series of in-depth, individual profiles of young adults and their relationship with the news. Reading through the profiles it becomes apparent the degree to which news, work, entertainment and social media have converged. These are no longer discrete categories of activities.
Robert, a 28-year old performance events manager working long hours, showed a close connection between texting and checking news. “After finishing a text message, Robert habitually hit the Internet button on his PDA and quickly browsed headlines.”
Here’s a description of how “Mark”, a 28-year old manager of an online travel agency in the U.K.consumes media.
“Mark’s news cycle was continuous and he spent up to six hours a day searching for and receiving information. Mark was on the Internet most of the day and used that time to keep up to date on news coverage and sports-related information. Mark liked his news to be “punchy” and pointfocused. He read the headlines in the Times and followed up on BBC online to “find out what’s happening” with stories that he wanted to track. Mark said he trusts the BBC and Sky Radio (for sports), followed by the Times and the Guardian. Mark’s news consumption was related to other activities that he was engaged in and although he was actively consuming the news, it was almost always in tandem with other activities such as driving or working…
Mark also mentioned Facebook as a source for news. He recently had a friend die and found out about it from another friend who used e-mail viaFacebook to let everyone know about the death. Mark admitted to this being a difficult and potentially unfair way to tell people about the death. He questioned the use of Facebook for certain types of “news.”“
These findings emphasize the need for topicality in marketing and the importance of news to the Gen Y audience. Millennials are accustomed to fresh, relevant content. The blurring between daily activities and ‘news’, combined with the diminished trust Gen Y has for ‘ads’, means marketers who want to reach Gen Y need to spend more time creating ‘news’ than messages.
For marketing that leverages the power of ‘news’ I can think of few better examples than Van’s Shoes. Van’s is a division of VF which also owns The North Face, Jansport, Wrangler and Lee brands. Van’s, which sells both footwear and apparel wholesale, online and in its own retail stores around the world was acquired in 2004 for about $300 million but has grown steadily since. Van’s actually spends very little on paid media, but is extremely active in youth culture. Even a brief visit to their web site shows an overwhelming amount of ‘news’ – about bands, video, contests, and events (like SXSW). Their blog, Facebook and Flickr pages are up to date with lots of current posts. The ‘news’ on their site that isn’t really about Van’s or even footwear, but is all about the things their young active, athletic target is interested in. Van’s really seems to understand their target and how they think about ‘news’.
It seems to be a given these days that Facebook is an essential medium for marketers wishing to reach Millennial consumers. EMarketer projects spending on social media to grow steadily from $2,883 Billion in 2009 to $4,136 Billion in 2011. We are starting to see real case studies of the ROI associated with social media efforts (this new video by SocialNomics does a nice job of summarizing the highlights).
As the age group most involved with Facebook and Myspace, it is considered essential to have a Facebook component to a Gen Y marketing effort. Yet, Millennials are still skeptical that this is the way marketers should reach them. Their behavior also suggests that marketers may not be all that welcome in social media. A new research report from Mintel (“Marketing to Millennials” 2010) says just 18% of 18-24 year olds say they are a ‘friend/fan’ of a product, service or store on a social network site.
Today’s topic in my Principles of Marketing class was ‘advertising’. After reviewing the various types of traditional and alternative media, I zeroed in on social media, sharing a few graphs of the skyrocketing use of Facebook in terms of minutes and unique visitors. I then posed the same question posed on Brand Channel’s site this week: “Should marketers be devoting more or less of their advertising dollars to social media?” While the marketers at the Brand Channel said ‘yes’ – by a nearly 2:1 margin – very few of my forty students agreed.
The students were not averse to the idea of marketers reaching them through Facebook. Mostly they just thought it wouldn’t work. They say they ignore the ads, and fear that the ‘noise’ on these sites would simply make them ineffective at getting or holding attention. They weren’t convinced it was a ‘good idea’.
Alex K.: “Users accept ads on the sites, but may not pay attention. Additionally, larger ad compaigns can be seen by users as being intrusive and may create a negative impact on the product.”
Nneka E: “The Facebook and MySpace environments as a whole will make it more difficult for advertisers to induce ad veiwers to follow the AIDA concept because it is difficult to get the consumers’s immediate attetnion or interest… social networking advertising has a lot of noise because viewers are distracted by many other things.”
Mark K: “One major risk of advertising on social networking sites such as Facebook and Mysapce is that users may get annoyed by the ads and will disregard them.”
The students also universally pointed out the risk that advertisers face by advertising in an environment where they have no control over the content that accompanies their ads. The students’ answers are not that surprising to me. The same concerns have been expressed for years about television and newspaper advertising as well. The important take away is a reminder that building a social networking program that will gain both the attention and the respect of Millennials may be especially challenging.
We take you now to State Street and Madison in downtown Chicago on a sunny Friday afternoon in April…
John: (Holding clipboard) Hi, do you have a minute?
Carol: (Pausing) What’s up?
John: (Perking up, surprised) Hi, thanks for stopping! My name is John, what’s yours?
Carol: Hi John, I’m Carol Phillips.
John: Nice to meet you Carol. We’re here to sign up members for Greenpeace, do you know Greenpeace?
Carol: Of course.
John: (Energetically) Greenpeace is the …
Carol: (Interrupting): John, are you a volunteer or paid?
John: (Sheepishly) Paid, but Greenpeace is a great organization, we ….
Carol: Can I ask you a question?
John: Sure….
Carol: What do you do when you’re not here?
John: (Confused) I work…(vaguely) and I have other jobs…
Carol: Are you a student?
John: I graduated last year from (well-known University) in Finance. But there aren’t many jobs so I saw this one in Craig’s List and I’m glad to have it. But it’s tough.
Carol: It keeps you out of your parent’s basement…
John: (Quickly) Oh, I have an apartment.
Carol: Do you have student loans you have to pay as well?
John: (Suddenly looking very worried). Oh yes, a lot. They are on hold until July, but after that I don’t know what I’m gonna do…I had a job out of school as a stock broker, but I quit after a few weeks. I just didn’t feel good about it.
Carol: Very Millennial of you…
John: I felt like one of those guys that got us in all the trouble. I didn’t want to be one of those guys.
Carol: How much does it cost to join Greenpeace today?
John: Most people go for a $1.00 a day or $30 a month.
Carol: $365 a year.
John: No, $30.
Carol: But over a year that’s $365, right, you were in finance…
John: (Smiling again) Right!
Carol: What’s the minimum to join?
John: $15. It’s more about the advocacy than the money.
Carol: Okay, I’ll sign up on the Internet when I get home.
John: (Looking worried now) Well, I have to sign up at least two new members a day to keep my job.
Carol: How many have you signed up today?
John: (Looking very worried) Well, actually none today.
Carol: I have to go make a phone call, I’ll come back if you’re still here, I’ll sign up then.
John: (Disappointed) Oh, we’ll be here, we’re here all day.
Fifteen minutes later…
Carol: Hi, I’m back.
John: (Befuddled) Oh hi, it’s not you, I just had a bad …. it’s so much harder here. I like being on college campuses more. Here no one wants to talk to you. They are so used to being panhandled.
Carol: Yeah, I agree, this is not the best location, why not go to Millennium Park (points down Madison Street).
John: We go where they put us. We’ve got locations all over the city. The people on campuses are so much easier. I like the campuses.
Carol: Have you gotten any more members?
John: No.
Carol: Well sign me up for $30.
John: Oh, great, thanks. Just fill this out.
Carol: Do I have to pay right now?
John: Well, yes. But in all our years, we’ve never had a problem with a credit card. I’ll give you my credit card…
Carol: No, that’s okay. Do you have a card?
John: (Reaching for his credit card)
Carol: No, I mean a business card, so we can stay in touch.
John: No.
Carol: Do you have a Twitter account?
John: No, I’m more of a Facebook user.
Carol: Okay, give me your email, I do market research and maybe I can use you in a study. I’ll be in touch.
John: Great. Thanks.
Carol: Bye
John: Bye!
One of the questions I hear a lot is ‘What exactly is a Millennial‘?
I have addressed this a few times, before in this blog (see “What’s a Millennial? Why Do Marketers Need a Label?”). Just like the question ‘what is a brand‘ there is no easy agreed upon answer, although I generally answer that I subscribe to the definition used by Pew Research that a Millennial is someone currently age 18-29, born after 1980.
Just for fun, I decided to answer the question as definitively as I know how. Using Census data and Pew Research definitions, I created a chart that shows the number of people there are of each age, from 0-100 years, based on 2008 projections for 2010. (I also laid the actual birth years below so you can double check your identity.) No doubt this data will be updated when the new Census data becomes available, but for now, this may be as good as it gets.
Here are a few observations:
First it confirms that the big three are Millennials (including teens), Gen X’ers and Boomers. Millennials are 73 million strong. Boomers are still the largest cohort by a 3 million person margin and Gen X the smallest. The bars become shorter and shorter past age 63 (yikes that’s a steep decline!) so we can reasonably project Boomers will shrink each year while Millennials and Gen X will be large for some years to come.
Another observation is that the Millennial population currently peaks at age 19-20. This explains the ultra competitiveness of college admissions the last few years with record applications, selectivity and enrollment. This peak is good news for the age groups that follow, those currently 18 or under, but bad news for those ahead them who are already struggling to find good jobs without the added stress of a peak number of new college grads hitting the market.
A final observation is that while teens are currently separated out, they should probably be considered part of the Millennial generation once they turn 18. Most generations span a period of more than 12 years, and this one will most likely be no exception.
My biggest take away from this chart is a caution. A group of 73 million people (current teens and Millennials) should not be thought of as a single ‘market’ any more than Boomers can be thought of as a ‘market’.
The concept of the ‘Millennial market’ for marketers should probably represent more of a psychographic or starting point for segmentation. Millennial, like Boomer, will most likely come to represent a set of values and way of looking at the world. I have long maintained that when marketing to Gen Y, values and behaviors are most defining and useful than age.
Pew seems to agree with me. For the last month or so, Pew has offered a How Millennial Are You? online quiz. If you haven’t taken it, I urge you to try it. The questions are scored 1-100 with anyone scoring 73 or higher rated a “millennial”. The scoring mechanism seems to be pretty accurate based on the results of the quiz. Most Millennials in fact do score pretty high. I scored an 81, well into Millennial territory, a fact I am proud of.
The actual answers from the 2010 Pew Millennials survey on which the quiz is based can be seen here. Even among true age-defined Millennials, the answers are a matter of degree, not black and white.
Sorry for all the numbers, but I think they provide a useful caution for marketers: It’s less about your age, than about young you feel and act.
Last week I asked my sophomore marketing class if they had any ‘must watch‘ TV shows? To my surprise they do! Lots of them — 30 Rock, The Office, Family Guy, Lost and more. In the past when I have posed this question, I would be informed that “Notre Dame students don’t have time for television” (other than sports and high profile events).
What’s changed? Now TV doesn’t have to be watched on a TV screen.
Millennials in my class say they are more likely to access TV shows streamed or downloaded online, via DVD, or recorded on a DVR than live. Emily Cook, a student in my class says,“Personally I like to watch America’s Next Top Model online, since I am rarely near a television when it plays at its regular time on TV.”
When Nielsen began tracking college students’ on campus TV habits in late 2004, they discovered students watched 221 minutes of television a day, mostly in late night and prime time. This was higher than had been previously thought. According to Pew, 57% of Millennials (18-29) watched at least one hour of television in the past 24 hours.
I have not been able to document whether students are watching more or less TV than they were five years ago (help me anyone?), but I strongly suspect it is more. According to Nielsen’s Online Video Census, online streaming of video was up 41% in August 2009 vs. year ago. In December, it was up 13%.
It’s unlikely all of the time spent streaming shows to computers and other devices is a direct replacement of hours watching traditional broadcast or cable TV.
Online viewing supplements rather than substitutes for TV watching in many instances, or is even duplicative. According to Notre Dame Marketing student, Chris Kratchmer, “Most of the online viewers for the major networks are people who missed a new episode of a show over the air and want to catch up before the next new episode.”
My suspicion that total TV time is on the increase was echoed yesterday by Jason Potteiger in his essay for TheNextGreatGeneration blog, “TV’s Missed Opportunity“:
Because of the Internet, people are watching more TV, not less. So why are premium content producers losing money? The ability to pick “what” and “when” in consuming TV content has led to a sharp increase in the hours spent in front of our screens watching TV. Though, it might not seem obvious because companies like Nielsen still aren’t measuring this accurately (not to mention all the illegal consumption going on as well). By a sharp increase, I mean a-wicked-lot-more people are watching tons more TV. Old media can no longer satisfy this new thirst for content. We’re talking TV seasons in a day. An entire series over the weekend. You just can’t get that on TV or even most websites that provide content along with ads. TV is simply unable and the latter (e.g. Hulu) has its hands tied because of low ad rates.
In response to these viewing shifts, The CW announced last week that it would increase the amount of advertising included in the shows they stream online (AdAge, 3.26.10). Online breaks will now match the length of breaks on its broadcasts. Some CW shows have online viewership comparable to their television audiences, a phenomenon enhanced by the fact that The CW does not syndicate its shows to other sites. If you want to watch “Vampire Diaries or “Gossip Girl, the CW’s site is the only option. Even so, there is a 75-hour delay between the debut of a new episode and its appearance online in order to protect TV ad dollars.
Right now, shows on Hulu and ABC Family run significantly fewer ads than appear in the same shows on television. That will most likely change as more and more consumers take to watching online and networks need to replace the lost advertising revenue.
Hulu has been considering charging a monthly fee of $4.99 for unlimited access to shows. According to my students, The CW approach is much preferred. All said they would rather watch commercials than pay for content. This sentiment is not limited to Millennials. A 2010 global Nielsen survey found the unwillingness to pay for online content cut across most demographic groups, although about half (47%) say they would accept more advertising to avoid paying (that figure is as high as 54% among Internet users age 21-24).
The alternative to paying may be more illegal downloading, especially among Millennials. Jason Potteigger writes:
Denying content to consumers hungry for it is simply bad business. People that download to get content are no more guilty of stealing than media companies are guilty of missing a smart opportunity. And so I ask, why should we not download it? Premium content producers are either unable to find a creative ways to meet our demand or ignorant to it.
People like TV and they’re watching more of it than ever before. Further, most audiences accept ads as a “necessary evil,” and enjoy Hulu immensely. In fact, most Gen Y-ers probably pay more attention to the ads on Hulu than the ones they’re skipping over with the DVR on their TVs.too bad that Hulu isn’t getting the ad dollars it’s backers hoped for. But, as any good capitalist would argue, that isn’t the consumer’s problem. They are not into sitting down at 7:00pm, and only 7:00pm, to watch their shows anymore. And, what if they want to catch the whole season? People pay over $100 a month for cable TV and Internet already! They want some slack. Eyes are valuable and they are on the screen(s), so as Tim Gunn would say, “Make it work.”
What’s clear is that TV is not going away. Millennials want high quality video and they are willing to watch ads in order to get it. What they won’t accept is only having to watch it on a TV screen.
The image of the poor artist living in a garrett was probably never as romantic in reality as it sounded. Unfortunately, many of today’s young adults, especially those without resources (like parents) to fall back on, are making that discovery. Mariam Shahab, a Boston University Senior and blogger, bemoaned in Twitter just today “Are we going to be forever known as ‘Generation Recession’“?
The definition of a ‘market’ is a ‘group of people or organizations with a need and the means to satisfy it’. Unfortunately, the “Millennial Market” may not be living up to its true potential, at least right now, due to lack of means.
I am confident Millennials would be lining up to purchase iPads immediately if it weren’t for the high price tag. Fifty-seven percent of 18-34 year olds say price is the number one reason they aren’t buying an iPad, double the average for all ages.
Tru-Research reports that 50% of teens in 2010 say “Not enough money” is their ‘biggest complaint’. This figure compares to just 30% ten years ago. Twenty-three year old Christine Carter wrote an article in Retail Customer Experience this week to explain “Why Gen Y isn’t Buying Your Products“. She writes:
“Our education expenses, our social desire for luxury goods and our inability to save money make us very cash-poor. Because our generation responds and adapts rather quickly to social changes, we have emerged from the recession as “Recessionistas,” informed shoppers who stick to tight budgets while still managing to stay trendy and cultured. We’re looking for inexpensive versions of the items we desire and durable versions of the items we need.”
I hear the same lament almost daily from my marketing students — they consider themselves cash-strapped. Last week, every student expressed a preference to watch ads to access TV shows online rather than pay to avoid them. When I see articles about Gen Y and shopping, they generally refer to teens. Young adults do not seem to get the same pleasure from shopping as those who are still spending their parents’ money. They see it as stressful and are extremely careful shoppers, researching larger purchases and avoiding impulse buys. Of all age groups, Nielsen points out, they make the fewest shopping trips.
Just how poor are Millennials? Let’s look at the data.
First, the Recession was just the latest in a long downward trend in young adult wealth. I have reported before on Gen Y being one of the poorest generations of young adults. According to a 2008 report by DEMO’s, “The Economic State of Young America“, young adults of 2005 were worse off on nearly every dimension of economic well-being other than education than young adults in 1975. Here’s how The Nation summarized the DEMO’s findings:
Men without a high school diploma suffered most, their annual income plummeting by 34.2 percent, while men with a high school diploma or the equivalent earned the runner-up slot, with an income drop of 28.5 percent. As for women, those with less than a high school diploma, as well as those possessing just a diploma, lost less ground than their male counterparts; but then again, they’re still doing worse than before and, perhaps more to the point, they still fare significantly worse than men their age.
At the same time, today’s young workers have had to do more with less. College tuition rates have skyrocketed–in fact, rates for four-year public universities have more than doubled since 1980–with the unsurprising result that nearly two-thirds of students graduating from four-year colleges in 2008 left in debt. The cost of childcare now eats up as much as 10 percent of a two-parent family’s income in many states (as much as 14.3 percent in Oregon). And young people between the ages of 19 and 34 are the most likely population to be uninsured–not because they don’t want health benefits but because employers don’t offer them. A case in point: 63.3 percent of recent high school graduates had employer-provided healthcare in 1979, whereas just 33.7 percent had it in 2004.
“What we’re looking at is a situation where young people entered the recession already feeling the brunt of thirty years’ worth of pretty gradual but nonetheless dramatic economic and social changes,” says Nancy Cauthen, director of the Economic Opportunity Program at Demos. “The recession just made a bad situation worse.”
Today’s BLS positive employment news was welcome, but doesn’t change the fact that unemployment among young adults is at an all time high, much worse than for older age cohorts. Sixteen to nineteen year old unemployment in March was 26%, twice what it was in March 2000.
An article in The Fiscal Times (“The American Dream Dilemma“, March 23) draws a vivid portrait of today’s Gen Y as ‘broke, unemployed, moving home, and living on food stamps.” The part about living on food stamps appears to be no exaggeration. Salon magazine this week also offers an extensive profile of Millennials signing up for EBT cards from the government’s Supplemental Nutrition Assistance Program (SNAP) , then attempting to satisfy their foodie and organic cravings once they have them (“Hipsters on Food Stamps“, March 15) — “Is it wrong to believe there should be a local, free-range chicken in every Le Creuset pot?”
Marketing to a target audience that faces true economic uncertainty is a challenge, especially a market that is used to thinking of what used to be considered ‘luxuries’ (cell phone and computer, high quality food, Internet access) as necessities. They are trying to stay away from credit, using debit cards for purchases and cutting corners whenever possible. Marketers who are winning are careful to explain the real benefits of their products, not just the sizzle.
Despite their current dire straits, Millennials strongly believe better days are ahead. Marketers that reach out to them in meaningful ways now could reap significant benefits later.
Target is a retailer that seems to understand the Millennial “thrifty yet hip” mindset best. According to Nielsen, Millennials are more inclined to shop there more often relative to other age groups as well as to outspdend them. (Nielsen, “Mining the Generations Gap“)
“Certain store banners hold a unique appeal for the younger generations, and Target is at the head of that retailing class. Target stores have managed to maintain a hip, trendy image with a strong value message with whimsical advertising; strong, almost pop art in-store merchandising; and a roster of high profile designers for everything from housewares (Michael Graves) to bedding (Todd Oldham) to women’s fashion (Mossimo) to cosmetics (Sonia Kashuk). And, with the interest in at-home meals, Target recently announced a new partnership with TV cook show host Giada De Laurentiis for a store-brand line of specialty food items and cookware.
