Millennial Marketing

Millennials define themselves more by their interests and passions than their careers or even technology. The desire to connect with brands that share their passions is a key motivation, both online and offline.

Consequently, identifying and understanding Millennial passions is an important first step in designing effective marketing programs.

Last week the Kansas City-based agency,  Barkley, shared new research that shows Millennials have a greater range of activities they are passionate about than those over 35. Significantly, Milennials are more likely to define success in personal terms and to put greater importance on it than older generations. “Seventy-nine percent* define success as “doing what you are passionate about“. Today’s youth are not influenced by money or the image of success. In fact, even in their online communities, only 6% feel that “having lots of friends on Facebook” is an influential quality. The vast majority believe “Being True To Yourself” is inherently more influential in life (62%).” *

Millennials  want to be defined by their passions, not their careers.

Last week I moderated a panel at the conference Barkley sponsored to reflect on the findings of their research and its implications for marketers,  “Share.Like.Buy” in San Francisco. The panel was titled “Tapping Millennial Passions,” and the panelists were noted Millennial researchers:  Barbara Bylenga, CEO,  Outlaw Consulting, Alex Smith of Mintel, and Tracy Panko, CEO, Spiral16.

The session focused on how Millennial passions are expressed and how they differ from those other generations. The panelists also discussed the potentially disruptive implications of these differences for marketing products and services across a number of categories.

Alex Smith began by noting that while Millennials’ passions may be similar in some ways to those of older cohorts – the environment, causes, music – the way they express and pursue those passions is very different. They have more tools to express their passions, which are used to curate their personal identities and gain attention.  Their overall goal is to express themselves in a way that is true to who they really are.

Barbara Bylenga added that Millennials are especially passionate about things that impact others: the planet, the environment, social justice, poverty. They see their passions as a way to define themselves as ‘changemakers’. What other generations might consider an ‘interest’, Millennials see as central to who they are. They define success in terms of their ability to turn these interests into accomplishments or even a career. Hence their passions are especially motivating.

Use a lifestage lense to predict and plan for Millennial impact

Bylenga says lifestage is a good lense for thinking about how Millennials will change categories.  The latest Census data confirms Millennials are putting off childrearing, staying single longer.  Currently they are in the ‘explorer’ lifestage, but as they mature, many are entering the ‘spinner’ stage, forming households and settling down, and in some cases readjusting but not necessarily abandoning their passions. They still want to make a difference, but will realize (rationalize?) that making a differences lies in the cumulative effect of small decisions, little actions, not necessarily a big career accomplishment. Every little decision is going to take on added significance. Marketers can leverage this insight by helping them feel like their consumer choices are helping make a difference.

Bylenga went on to say Millennials will increasingly see it as a stepping stone to independence, with many aspiring to be entrepreneurs rather than bind themselves to a sure paycheck.  (In fact, this prediction may be already coming true. There was a 250% increase in the past two years in the number of Millennials who choose freelance work over a job.)

Characteristics of brands that generate passion among Millennials

When asked the characteristics of brands that generate the greatest amount of passion among Millennials, panelists repeated mentioned the importance of authenticity. According to Barkely’s research, Livestrong is the number four most recognized charity among this age group, a position it achieved by being authentic according to research by Spiral16, said CEO, Tracy Panko.

Despite dramatic and controversial events surrounding Livestrong founder Lance Armstrong, the Spiral16 data shows that Livestrong has continued to successfully engage their community and turn them into passionate evangelists. Besides amassing a huge following on Twitter, Livestrong has also spread its influence and message across other social media platforms with a clear and concise message. Eight out of the Top 10 most influential web pages in the study are components of the Livestrong organization, while the remaining two pages were created by passionate Livestrong fans. (The RSS feed for the Livestrong blog ranked even higher — number two — than blog URL itself.)

Panko points out that this kind of community and presence is impressive. As much as brands would like to, they cannot just control online attitudes at will. A digital presence this dominating, nonprofit or not, can only be built up from years of consistent hard work and clear strategizing. She also cited Patagonia as another brand with a strong authentic brand with special appeal to Millennials. Patagonia’s willingness to willingness to show the less desirable parts of their brand suggests an honesty that allows them to win with consumers. Other brands cited for their authenticity were Trader Joe’s and In ‘N Out Burger.

Companies who hope to win and sustain Millennial customers know the importance of product and marketing innovation.  Millennials love shiny things, especially when those things contribute to their personal efficiency, help to protect the environment or contribute to the greater good.

Pepsi’s announcement this week of innovative new plastic packaging sourced 100% from plant-based materials, may be a game changer in the cola wars in its ability to appeal to Millennials.

Why Package Innovation Matters

One of the most difficult aspects of managing an iconic mega-food brand is that it nearly impossible to offer meaningful product innovation. Think about it, do you really want to be the brand manager that messes with the recipe for Heinz Ketchup or (gasp) Coca-Cola?  The most you can hope for is an innovative new marketing approach like Pepsi Refresh or Coca-Cola’s ‘Open Happiness Machine’ viral video. Once in a great while, you may strike gold with a package innovation, as Heinz with its plastic squeeze bottle.

Believe it or not, ketchup only came in glass bottles until the mid-eighties, due to the considerable technology required to make a clear bottle that would resist the acidic nature of ketchup.  The bottle was an immediate hit and consolidated Heinz already sizeable share lead.  A few years later, the upside down squeeze bottle completed the evolution, until recently.

Last year, I toured Heinz Innovation Center outside Pittsburgh. Much of the R&D activity there still revolves around packaging, such as its Dip & Squeeze package. Heinz web site says the dipping package is its first significant food service side innovation in 42 years.

Introducing Plant Based Packaging Material

In November, Heinz announced its latest package innovation, tapping Coca-Cola’s technology to put ketchup in bottles made of 30% recycled plant material starting next summer. Heinz seemed to get the jump even on Coke as it isn’t clear when they plan to roll the technology out for their own products.

Perhaps in response to the Coca-Cola package move, Pepsi made a packaging move of its own earlier this week when it announced that beginning in 2012, it would incorporate 100% recycled plant materials in its beverage packaging. As Coca-Cola say “it could take a few more years to develop the technology” to replace the other 70% of its packaging with plant-based material, this could provide Pepsi with an important short-term edge.  While it still needs to be recycled, the fact that it is made with recycled plant material puts it ahead on the ecological impact scale.  Significantly, Pepsi says the change will be imperceptible to consumers in appearance, functionality and cost. What’s not to like?

Pepsi Packaging: Will It Be The Choice of a New Generation?

In the cola wars where every little bit counts, this packaging offers serious bragging rights. While it may be subtle, in the cola and wider beverage wars, every little bit counts. This new package (and I hope they give it a proprietary name!), may give Pepsi an important edge. All things being equal, most Millennials would opt for the environmentally sound option.  Here’s what I said when asked for my opinion by Chicago Tribune writer, Greg Karp:

“It could be a game changer for them,” said Carol Phillips, a University of Notre Dame marketing professor and president of market research firm Brand Amplitude. “In the cola wars, every little bit means something. It’s a game of perception. It can tip the balance, at least for a while.” The environmentally friendly bottle can be a marketing edge, depending on how Pepsi exploits it, Phillips said. That’s especially true among so-called millennials or Generation Y, a primary target for soft-drink companies. “I think it’s big for the millennials,” she said. “Everybody would love a way to be green, especially if it doesn’t cost them any more.”

This innovation, combined with its ground-breaking Pepsi Refresh marketing effort, may indeed make Pepsi the choice of this next generation — at least for a while.

Note: For great insights into the Millennial marketing behind the Pepsi Refresh effort I highly recommend this YPulse interview with Pepsi exec, Maria Irazabel.

When it comes to defining personal identity, few brand choices matter more than what you choose to wear.  When students tell me they aren’t into brands, I merely smile and point to the Notre Dame, Nike, and Adidas logos on their hats, shirts and shoes. For Millennials, apparel brands are an important means of curating identity.

For marketers, the challenge is to understand what makes a brand cool enough to wear?

The Coolest Brands

There are many systems designed to tell us which brands have the most equity, are the most valuable or represent the greatest value to consumers. But until today I was unaware of a serious study of which brands are the most cool. Spanish branding agency, Allegro234, recently released results of its 2010 Coolest & Gaps Branding Survey.  The study, now in its third consecutive year surveyed 4,200 people in 28 countries.

One of the things that makes it so original is its emphasis on write-in responses. Rather than pre-ordain the coolest brands, they rely on nominations. Each respondent proposes one brand that represents ‘the coolest experience’. Remarkably, of the 114 global brands nominated, 20 represent 60% of the responses.  The top 40 proposed brands are 75%.  This high degree of consensus suggests we know all cool when we see it.

The study went beyond proposing cool brands and also asked participants to rate their nominated brands on ten dimensions of the brand experience. These dimensions included ‘Brand’, ‘Communication’, ‘Place’, ‘Availability’, ‘Related Services’, ‘Tailormade’, ‘Interactivity’, ‘Respect for the Environment’, and ‘Social Responsiblity’.

Of these ten factors, by far the most important was ‘Brand’ – the vision that the brand promises.

The Coolest Apparel Brands

The entire report is well-worth reading, but for this blog I will focus just on the apparel brands. Not surprisingly, apparel brands represent a large proportion of the top 60 coolest brands. They include:

Diesel (6), H&M (9), Gap (12),  Nike (14), Levi’s (17),  Adidas (19), Swatch (22), North Face (23), Hugo Boss (26), Stella McCarthy (31), D&G (32), Patagonia (40), Top Shop (42), Pony (45), Zara (49), and Burberry (51).

Allegro234 observes that cool apparel brands fall into four broad categories. Tellingly, none of these categories has much to do with ‘luxury’:

Masstige: Ex: Stella McCartney, Hugo Boss, D&G, LaMartina, Disiguel

Mass: Ex: Target, Gap, H&M, Top Shop, Zara

Performance Sports: Ex: Nike, Patagonia, North Face

Urban Sports: Ex: Adidas, Pony

One of the most fascinating lessons here  is that ‘luxury is no longer a guarantee of coolness’. The report goes as far as to conclude that ‘luxury brands with some exceptions, are no longer considered cool’ and that a cool experience is now what matters most in the definition of cool’.

“A cool experience helps peoples’ referential status and moves away from the traditional idea of luxury. Something luxurious is not necessarily cool. This gives greater weight to trends over more rational shopping processes and the flow of the experience is more important than possessing he product in order to live it.” 2010 Coolest Brands Survey, p 13.

I have long said that luxury is not relevant to Millennials. In my experience, young adults have a different metric for determining value, and that metric rarely involves status or prestige. While it’s true that Millennials enjoy premium brands, their affinity has more to do with the experience of ownership than the fact of ownership. A Coach or LV bag for a young professional woman, represents the first step on the path to a professional image or career. It has practical connotations,  an accessory that aids confidence in an interview and suggests you are discerning and willing to ‘invest’ in something of value.

Other related lessons: Mass brands can be just as cool as exclusive brands. Performance brands can be just as cool as fashion brands. In other words, it’s no longer essential to be ‘hip’ to be ‘cool’.

Do Millennials Relate Differently to Brands?

The research on cool brands was not limited to Millennials, but coolness represent a more modern view of brand value than more traditional markers.  In particular, by underscoring the importance of ‘brand’ in the sense of ‘credible promise or vision’, the Allegro study is better aligned with how Millennials choose brands.

New frameworks are needed and have started to appear, that emphasize attributes such as Identity, Performance and Social Responsibility (Future Brands). I like to think of these as  Competence, Caring and Belief. More research is needed before we can conclude that Millennials relate differently to brands, but I am convinced they do.

The rules around alcohol advertising and sports need to be re-examined. Why can’t I visit CaptainMorgan.com without answering the question, “Are You Old Enough to Come Aboard?”  Yet – I can’t avoid seeing the Captain’s logo on ESPN when I am working out at my fitness club? A quick check of YouTube shows that the relationship with ESPN is more than logo-deep, as demonstrated by the :60 opening sequence created for Wednesday Night Baseball last summer (see above). The film doesn’t contain any drinks, but it’s all about the iconic Captain.  What’s next, Joe Camel?

Mixing Sports and Alcohol

Thom Forbes, the respected writer and former editorial director of Adweek, wrote a powerful essay today titled “Alcohol and Sports Should Not Mix” (Mediapost, 2.7.11).  In it he asks:“C’mon. Why is it that the only time that advertisers claim that advertising doesn’t work is when they are trying to squirm out of its impact on youth?

…We can throw stats at each other from now until Super Bowl C, as The Center on Alcohol Marketing and Youth at the Johns Hopkins Bloomberg School of Public Health and the Distilled Spirits Council recently did. But today’s argument boils down to a very simple proposition: Why do we continue to send the mixed message to kids that alcohol and sports are inexorably twined? In our culture, they are. They shouldn’t be.

Nearly two years ago, in this blog, I attempted to point out that it is ludricrous to think that a handful of  responsible drinking ad campaigns were going to be of any use in fighting a youth culture that equates partying and having a good time with drinking, largely as a result of nearly saturation levels of advertising delivering the message that the fun only starts when the beer and rum arrives. (“Tough Sells: Anti-Tobacco and Responsible Drinking” 2.25.09)

As marketers, it’s time to admit that advertising does work and be more consistent in our application of rules.

The Captain Morgan multimedia campaign is one of my favorites. It’s great marketing and it’s working.  Diageo reported in December 2010 that it holds a 34.5% share of the U.S. rum market and its share is growing, because its volume is growing faster than the overall  market (which is growing 7% globally each year!).

Don’t get me wrong. I love great marketing like the Captain, and I support Diageo’s right to advertise a legal product. But Diageo needs to advertise responsibly to legal drinkers. Like Forbes, I don’t think sports and alcohol should mix, and I especially don’t think the Captain should be linked with baseball — or any other sport — on ESPN. It’s time to draw the line.

I came to dance, dance, dance, dance
I hit the floor
‘Cause that’s my, plans, plans, plans, plans
I’m wearing all my favorite
Brands, brands, brands, brands
Give me space for both my hands, hands, hands, hands
You, you
Cause it goes on and on and on
And it goes on and on and on

— Taio Cruz, “Dynamite“

Millennials are suspicious of marketers, skeptical of claims and ignoring ads, but their affinity for brands is undiminished. Gen Y understands that brands are cultural symbols that convey meaning. Brand choice, especially in image driven categories like mobile phones, shoes, entertainment, and clothing brands matters even more to teens and young adults, than to older consumers.

Brand Talk

Keller Fay’s 2010 Talk Track study asked participants use a diary to keep track of their brand conversations between July 2009 and June 2010. The study sample ranged from ages 13 to 69, and included a break out sample of 4,900 teens (ages 13 to 17).

They found that, overall, teens engage in a significantly higher level of word of mouth about all brand categories than the public as a whole. Furthermore, teens are twice as likely as everyone else to hold brand conversations online, although online still accounts for a minority of  brand conversations even among teens (13% for teens vs. 7% for general public). (‘ Online’ included email, texting/IM and social networking).

The sheer volume of DAILY conversations about brands is impressive.

• 69% of teens have one or more conversations per day that include food/dining brands, versus 54% of the total public.
• 67%/39% about technology;
• 63%/42% about sports/recreation/hobbies;
• 63%/39% about telecommunications;
• 59%/38% about retail/apparel
• 58%/46% about beverages
• 45%/35% about automotive
• 45%/26% about personal care/beauty

Marketers, Brand Stories and Facebook

This week, Facebook announced a new program called ‘Sponsored Stories‘ designed to generate revenue from these conversations.

When a friend mentions a brand or has any brand interaction such as “Page Likes, App interactions, Place check-ins and Page posts”, that mention will now show up  in a separate ‘sponsored stories’ area to the right of the feed. This is to make sure that mention isn’t missed.  Here’s a short two-minute video from Facebook explaining how it works.

Make no mistake, Brand Stories are  ’advertisements’, but they are likely to receive little or no pushback from Millennials, for they don’t seem like ads.  Millennials want to know what brands their friends ‘like’.  As the video points out, “anything they would have seen as a sponsored story is something they would already have seen in their newsfeed.” Now, it’s just more likely those interactions will be noticed.

Brandification?

As Millennial Josip Petrusa points out in his blog this week, Sponsored Stories is just a continuation of the ‘Brandification of Your Social Presence”.

“Both Edelman’s “8095” and L2’s “Gen-Y Affluents” reports have verified that Millennials are considerably brand-centric. They love the brand. They love brands. They share brands. They talk brands. They live brands. They speak brands. And they have invested considerable ideological value into them. They have come to represent who they are. When you make this correlation you begin to see the very beginnings of branded social profiles. Brands will no longer come to represent the products that encompass them but the user who empowers them. The user who humanizes them.”

The stories go on and on and on

From my perspective, what Petrusa calls ‘branded social profiles” is the continuation of a trend toward the humanization of brands and the branding of people, places and institutions that has been developing for years. The trend has simply accelerated with the advent of social media.

James Twitchell wrote a provocative book as early 2004, titled “Branded Nation: The Marketing of Megachurch, College, Inc., and Museumworld“ .  Twitchell points out the importance of stories to branding in clear terms:  ’Often the only thing that separates this ratty rug from that priceless tapestry is a story’.

In the age of social media,  ’brand’ stories are no longer confined to the ‘marketplace’ but are now part of culture, both high and low. The difference is that now we are more self-conscious about creating those stories. Here’s Twitchell again:

“And really, isn’t all life about marketing, in a sense? You market yourself to your friends, to your employer, your constituents, and they to you. Your children market themselves to their sport team (pick me! pickme!), schools market themselves (a degree from us is a ticket to success), and even churches market themselves (services at 9 and 11) and their products (forgiveness now, salvation later). Maybe it’s just the illusion of not marketing that we need to dispense with.” (p. 3)

Yet another study appeared today showing Millennials are less interested in driving around in a car than they used to be.  Sixty-seven percent of 25- to 34 year-olds say they’d drive less if other options were available.

This study may be a little self-serving (it’s sponsored by ZipCar, click here for the SlideShare presentation), but the evidence was already pretty overwhelming that cars are well-down on the Millennial shopping list. Last spring, Ad Age ran an article titled, “Is The Digital Revolution Driving a Decline in Car Culture?” They reported only 31% of 16-year-olds and 49% of 17-year-olds had licenses, with the decline accelerating rapidly since 1998. Share of miles driven by 20-30 years dropped to 13.7%  in 2009 from 20.8% 10 years earlier.

What’s driving the decline in driving?

A whole constellation of factors appears to be at work here: concern about the environment, the poor economy and high  unemployment, a shift in priorities toward experiences over stuff, and the availability of better options, such as ZipCar and public transportation.

Beyond these more ‘systemic’ factors however, is a nagging sense that perhaps the automotive industry itself has yet to make cars and the car buying process appealing to Millennials. Last summer the Examiner reported on a study by Wakefield research that found “Millennials Say Buying a Car More Painful than the Dentist“. The study revealed Millennials think cars are unappealing and the purchase process is worse. Here’s what they had to say about buying a car:

More than half of Millennials classify negotiations with a car salesman as more painful than going to the dentist. That common conception certainly isn’t going to help the auto industry.  It needs some proverbial laughing gas to make the process a more enjoyable one. Millennials know just the thing. Internet. Eighty-four percent of Millennials agree that having convenient Internet access in the dealership during the car-buying process would make the whole experience seem more “fair and transparent.” More than anything, that means Millennials want to have easy access to research while they’re at the dealership. They’re likely trying already–from their phones.

A study by Microsoft on Millennials and the shopping process revealed similar results. They found 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.

Pain in the purchase process aside, there is evidence that the industry is not addressing Millennials’ needs: high tech, high mileage, low maintenance cars.

• Technology: Wakefield research also found that 27 percent of Millennials said they would compare today’s cars to a 1980s desktop computer or typewriter. “The more integrated the technology in the car, the easier it fits in their lives”.
• Mileage:  Gas mileage is one of the most important factors Millennials consider, according to the Deloitte Automotive 2009 Gen Y Survey. The “Attitudes Toward ‘Green’ Efforts survey, conducted by five Michigan State University grad students, found that Millennials are willing to pay up to $8,000 for a car with an increased 15 miles per gallon.
• Low Maintenance: Cars are expensive to maintain. According to DOT data, it costs $8,000 a year to operate a car based on the average 15,000 annual miles driven. NPD reports that automotive parts stores in geographic areas where Millennials cluster report 11% higher sales of filters, spark plugs, tools and hard parts, and concluded that many are becoming automotive ‘do-it-yourselfers’. After all, if they can fix their computer, why not their car?  As this Gen Y’er explains in a short video, “I won’t buy a new car anytime soon” so “I do as much as I can on my own” and when necessary call a friend for help.

All this spells opportunity for car manufacturers. Why not create a car that is designed from the beginning to make D-I-Y an affordable and realistic option?  If Millennials are willing to pay more for low mileage, why not follow the lead of Ford, Kia and Scion and offer more fuel efficient cars? If they are used to having fully-featured computers, why would they settle for a stripped down car?

There are some who will object and say the trend is one of delay not denial. It’s possible that as Millennials age, have children and move to the suburbs, their needs will change.  Maybe. But, I believe they will continue to look for a different way to satisfy those needs.

If auto marketers aren’t successful in reversing the trend, the ramifications of loss of interest and dependency in cars by Millennials goes beyond the car industry itself. There are implications for housing, urban planning, the auto insurance industry, retailing, and makers of alternative transportion. Perhaps it’s time to invest in bicycles?

This week Advertising Age featured a long and excellent profile of Millennials as part of their annual Consumer Issue (10.11.10) The article was written by a Millennial, Thomas Pardee who interviewed me for the story.  The focus of much of the article is the battering Gen Y is receiving by the economy:

“Today, many millennials are unemployed; according to a Pew Research study released in February, a staggering 37% of 18 to 29-year-olds don’t have jobs, the highest share in three decades. Those who can afford to attend college are going to less-expensive state schools or community colleges and many are moving back home after graduation. More than a third depend on family members for regular financial assistance. They’re tightening their belts and re-evaluating what makes them happy — and they’re spending money accordingly.”

Often ‘spending money accordingly” means spending as little as possible. Pardee quotes Gabi Gregg, a 24-year old graduate of Mount Holyoke College, now MTV’s ‘Twitter Jockey’ making $100,000-a-year, position as saying:

“Almost everyone I know is living paycheck to paycheck, just trying to survive. It’s easier to interact online than to go out and pay for dinner, or go to a movie.”

Millennials’ entry to the job market, and consequently the consumer market, is slower than expected.  At a presentation to a Chicago ad agency yesterday, one young recent college grad said he is the only one of his friends who has a full-time job. Without income, it’s hard to be an economic force.

Yet the numbers suggest it would be unwise to ignore them for too long.

There are currently 48.7 million adults age 18-30, about 22% of the total 18+ adult population. That’s about twice the size of the Senior population (66+ years).  And yet Gen Y does not claim its fair share of households. The far less numerous Seniors account for nearly 18% of all households, while Gen Y accounts for only 10%, a staggering discrepancy.

While the picture is certainly grim, it is not permanent.  Longer term, math is on their side.

Eventually today’s young adults will move out of their free rent, and shared rent housing. When that happens, the household figures will align more closely with the population statistics.  In many categories, their impact will be disproportionate to their size. Certainly the markets for real estate, financial services and travel will enjoy a needed lift.  According to Forrester, people ages 18 – 29 (Gen Y) will account for 40 % of online banking households by 2014.

The question on most marketers’ minds however, is what will their spending priorities look like? Will they match the free-spending Boomers, who are by some measures the most spending generation in history?

According to Ad Age, Boomers spend twice as much as other generations. The Bureau of Labor statistics says Boomers spend about 48% of their income on housing and transportation, which is a pretty healthy percentage. Millennials proportionately spend about the same, but off a lower income base.

As they have more to spend, will they continue to invest in houses, rent and vehicles? My intuition says no.

I don’t see them moving to the suburbs with all the trappings. The Recession has caused them to stop and think about what they really need and what really matters. The answer increasingly is ‘not more stuff’. Here’s what I told Thomas Pardee of Ad Age when he posed the question about long term impact on Millennial spending:

“Ms. Phillips says millennials are now tinged with a sense of frugality that will likely remain for the rest of their lives. Her research suggests they’re big into redistribution of materials, into sharing smaller houses and taking public transit or walking. They’ve dropped their cable and never used landline phones; they’re not eating out as much, and they’re paying down their debt. Though they will splurge on necessities (which now include smartphones) and rationalize that occasional Coach bag as a career investment, “they’ll go online and ask their friends for recs. They’re very careful shoppers.”

An recent article in the Wall Street Journal by Richard Florida  titled “How Soho Can Save the Suburbs” (10.9.10) caught my eye.  Florida contends that changing lifestyles signal a shift away from big homes and long commutes in favor of more convenient ‘walkable’ communities.

“Even before the recession, our changing demography had begun to alter the texture of suburban life in favor of denser, more walkable mixed-use communities. The average age of marriage has been rising, households have gotten smaller, and home-buyers—surprising numbers of them single women—are looking for smaller houses closer in, with access to parks and cultural amenities. ….These are the places where Americans are clamoring to live and where housing prices have held up even in the face of one of the greatest real-estate collapses in modern memory. More than that, as my colleague Charlotta Mellander and I found when we looked into the statistics, the U.S. metro areas with walkable suburbs have greater economic output and higher incomes, more highly educated people, and more high-tech industries, to say nothing of higher levels of happiness.”

The key insight is in the last sentence. Millennials are seeking happiness.  Even in these hard times, they have retained their trademark buoyancy.  According to Pew, 9 out of 10 still fully expect to reach their goals by the time of retirement. The secret appears to be in adjusting the goals.

What will a Millennial-dominated economy look like? My prediction is smaller, greener, less impulsive, and more inclined to do without unecessary frills and thrills — not because they are  ’anti-consumerist’ but because they are simply more inclined to save than spend.  And that may in the end, save us all.

Gen Y represents a specific culture with its own mores, references and preferences. As with other multi-cultural marketing efforts, cultural relevance is a key factor in achieving results. To be relevant, marketers must literally learn to speak the language and communicate ‘we get you, we know who you are and what you like‘.

NASA turned to the Millennials on their own team to ensure cultural relevance.

Three years ago, NASA recognized it had a relevance problem.  Research showed forty percent of Gen Y opposed NASA’s mission and 39% believed nothing good had ever come out of it.  The numbers were even worse among Hispanics.

So NASA leadership asked some of the Millennial members of their own team to help them figure out how the space program could better speak to a Millennial audience. They put together a remarkable  presentation that is still available on Slideshare, called “Gen Y Perspectives”.

The Gen Y team helped NASA understand why it wasn’t connecting with a younger audience, explaining how their generation was different in the ways they grew up, in theirir values, workstyles and  especially in their need to be heard:

“Gen Y is a completely new generation…Gen Y is currently 25% of the workforce and is projected to be 47% by 2014. Is NASA ready?“

The Millennial advisors said it wasn’t enough to just explain the space program and why it mattered, NASA needed to connect in a meaningful way. The team  provided recommendations for how to engage a younger generation, explaining that after all, the space program is inherently cool – it is rocket science!

“For our generation TV is not passive entertainment, it is an interactive experience. And our lives and outlooks have been shaped by this. Anyone can be a star. Everyone deserves to have a say. Getting heard and having a say are not only easy they seem natural. Our generation is not interested because we don’t see the point, we don’t understand the facts and we can’t participate.”

The presentation was widely circulated among NASA leadership and led to close examination of its recruiting and management approaches as well as external communications. It also led to an early embrace of social media internally and by its office of public communications.

Mike Massimino, @astro_mike

Externally NASA now has a ‘Connect’ tab on its home page which offers multiple was to interact with the program, including multiple Twitter and Facebook accounts, apps, Ustream and Youtube channels, Flickr and and more. There are over 100 official twitter handles including @NASA and @NASA_Astronauts covering the gamut of its centers, programs and projects. One astronaut, Mike Massimo, has over 1.25 million Twitter followers and has even tweeted from space (@astro_Mike). There are podcasts, tweetups, and chat opportunities. No social media stone has been left unturned.

Internally, the change was equally dramatic. Rather than rely on open systems which had the potential for touchy asynchronous relationships, they created a proprietary intranet called Spacebook that mimicked the functionality of Facebook but was exclusive to NASA employees. They also leveraged Sharepoint and other Web 2.0 technology and report great success in changing the culture to one that is more collaborative.

“One of the most amazing things about these Web 2.0 technologies, and the greatest value to NASA, is the ability to help us create a culture of engagement and collaboration that makes each individual employee much more effective.” – Linda Cureton, NASA spokesperson

Is it working? According to NASA they have been amazed by the effectiveness of using social platforms to demystify issues and connect with younger generation who have an untapped love of science and exploration.

The second ‘Tweet-Up” in Sept. 2009, advertised through the main Twitter account,  brought the first 190 registrants for a day at the pressroom at NASA HQ in Washington, D.C.. Here’s how a participant described the event on the Aviation Week blog:

We got to hear Commander Mark Polansky and the STS-127 crew describe their mission to the International Space Station, complete with documentary video, then after a lengthy and obliging Q&A session, we could walk down and shake their hands, get autographs and pictures, and sneak in at least a few minutes of one-on-one conversation.  Michael Curie, the “voice of NASA launches,” played host for the afternoon.  We also took home a stuffed bag full of space schwag and got to wander around NASA HQ (where Dr. John C. Mather’s 2006 Nobel Prize in Physics, as well as NASA TV’s recent Emmys are on display; visitors can browse the library and gift shop, and run into all the space big-wigs wandering the halls).  People have come from as far away as California, Venezuela, and Spain for the Tweetups.

Would NASA have been as successful without the involvement of their Gen Y panel? It’s doubtful. If your brand is looking to do a better job connecting with Millennials, why not just ask them? After all, it isn’t rocket science.

New addition to this post: 10.15.10: “NASA Teams with Gowalla on Moon Rock Scavenger Hunt” (Mashable)

This smart location-driven promotion is a reason to sign up for Gowalla! You can win points by finding items like virtual moon rocks, a NASA patch, a spacesuit and a space shuttle hidden at NASA related locations around the country. When a user earns three of the virtual goods, they  get a special NASA pin for their Gowalla passports. The first 100 users to get three items will also each get a real-world prize: A special edition map, entitled “Search for the Moon Rocks. (click the article above to see a picture.)

This promo seems right on for Millennials – combines the fun of a game, the recognition that comes from a contest and mobility all in one. Congratulations to the social media savvy team at NASA!

Was the Featherbone Parlor a forerunner of NikeTown and the Apple Store?

There’s a myth that Millennials don’t like marketing and are indifferent to brands.

The reality is, as my friend Rishad Tobaccowala reminded me last week, that Millennials are ‘besotted with brands‘.  While that may seem like a strong choice of words, he isn’t far off the mark. It’s easy to engage a Millennial in a conversation about brands.  They love to talk about what their favorite brands are doing, as the buzz about Old Spice Guy and Nike’s World Cup marketing attests.  They understand the ‘language’ of brands and the role they play in communicating about culture. And many choose to friend or follow their favorite brands in social media so they can stay up to date on the latest news or provide their feedback. Insider information about brands is strong social currency.

What Millennials actually dislike is interruptive advertising.

This is traditional advertising that is designed to appear everywhere and anywhere, irregardless of context, without personalization, with the single goal of gaining awareness and conveying an idea that may or may not have any relevance to the person seeing it at the moment.  This type of advertising is becoming less and less effective because Gen Y (and others) don’t see any reason why they should put up with it and — and don’t.

As marketers look for new ways to engage empowered consumers, ironically they are returning to the origins of marketing.  Marketers are finding ways to add value that may have nothing to do with purchase, but everything to do with making consumer’s lives more informed, more interesting, or more convenient. This is marketing that aims to get noticed, even engaged with, by promising that the marketing itself will improve consumers’ lives.

The book having the greatest impact on my thinking at present is Bob Gilbreath’s, The Next Evolution of Marketing: Marketing with Meaning. Gilbreath points out that there’s nothing new about thinking about brands as offering real service and real value independent of purchase. He points out that David Ogilvy’s first ad for Guinness was a reference guide to selecting oysters. The 100-year-old Michelin guide was originally a travel guide for car owners in France ‘complete with information about auto maintenance, lodging, restrooms, and restaurants’ that created awareness for its tires and emboldened consumers to take to the roads.  Betty Crocker cook books helped consumers try new recipes and gave them confidence in the kitchen.

Gilbreath believes that the answer to today’s challenge of consumer avoidance of ‘interruptive’ marketing tactics is to return to meaningful approaches like these  that connect brands more directly to their target audiences.

I think he’s right. We could learn from these old school marketers. Here’s another example, dating back to the 1880’s. Warren Featherstone was the inventor of the ‘featherbone stay’, a replacement for whalebone stays in corsets created from by-products from the manufacture of feather dusters. Featherstone knew a thing or two about branded utility and community building.

“Featherbone Parlors were established in major cities and fashion shows were held to demonstrate the latest uses of featherbone to customers. With changing fashion styles, Warren kept adding new products and promotional campaigns. Featherbone bustles, bust extenders, featherbone-stiffened fabric, different weights and widths of feather bones, collar and belt foundations were among the new features offered. Promotions included instruction booklets and in 1893 Warren began publishing the Featherbone Magazinette for distribution to dressmakers and retailers plus advertisements in Ladies Home Journal and other women’s magazines. To further reach the home market and dressmaker, Warren patented and market a featherboning attachment for the home sewing machine in 1895. This 3-1/8″ long attachment mounted on the bed of the sewing machine and aided in the insertion of featherbone or stay.” – http://www.fabrics.net/joan905.asp

Think of the ‘featherboning attachment’ as an app and the ‘Featherbone Parlor’ as a 19th Century Apple Store, you can see just how far, or little, we’ve come from those early days.  But there’s more. Warren Featherbone also understood the power of philanthropy. In 1917 he “acted on his vision to help create a better world for future generations by establishing the Warren Featherbone Foundation.” The foundation was intended to establish new methods for everyday people to engage in philanthropy. and led directly to the donation of properties for parklands and wilderness areas in the State of Michigan, known as Warren Dunes State Park and Warren Woods.

As we move from an interruptive model to an engagement model for marketing and brand building, brand strategies will also need to evolve, and perhaps what was old will be new again.

Marketers are investigating the power of  ’branded utility’, ‘community building’, ‘user generated content’ and new forms of ’cause marketing’ as means for adding value and meaning to their brands.

We may look back and see the ‘Mad Men’ era of mass media as the exception, not the rule in the evolution of marketing.

For some great examples of campaigns that made participation the goal, see “Five Fantastic  Campaigns that Put Digital First” by Jim Nichols of Catalyst.

Getting the right people to fan your brand on Facebook isn’t easy. In fact it may be the modern day equivalent of populating a salon with influential guests. Just two brands, Coca-Cola and Starbucks have more than 5 million fans, which is not that many considering Facebook’s user base and the the size of those brands’ customer bases.

However, difficult it is, new research from Syncapse suggests that recruiting customers to a Facebook fan page may be a goal worth pursuing. The research shows fans are much more valuable than other users and put a dollar and cents value on the difference.

They concluded,  ”A fan base is a self-segmented group of highly valuable customers“.

Syncapse used a combination of a 4000 member survey  and “in-depth proprietary research and data analyses of two-years available data across millions of interactions, Syncapse was able to compare the worth of a fan relative to non-fans for the top 20 brands on Facebook –Nokia, BlackBerry, Motorola, Secret, Gillette, Axe, Dove, Victoria’s Secret, Adidas, Nike, Coca-Cola, Oreo, Skittles, Nutella, Red Bull, Pringles, Playstation, Xbox, Starbucks, and McDonald’s. Results are broken out by brand and results vary a lot across and even within brands. Yet the overall pattern is clear. They conclude Fans were found to spend more on products, be more loyal, are more likely to recommend the brand to a friend:

Syncapse has observed that an average fan may participate with a brand ten times a year and will make one recommendation. But, an active fan may participate thirty times and make ten recommendations. The impact this has on fan value is quite dramatic. In the case of Coca-Cola, the best case for fan value reaches $316.78 but is $137.84 for an average fan. In the worse case scenario, a fan is worth $0. This degree of variability in the value of a fan must be a major consideration in determining how brands address different types of fans in efforts to move them up the value ladder. In short, the goal must be to reduce fan variability while moving the average fan value to the active end of the range.

Before you can ‘move customers up the ladder’, you have to encourage them to join in the first place.

Research shows that fanning a brand is all about content. 67% join to get news or product updates, 64% to get promotions and 41% to view or download music or videos. This is consistent with research I heard presented yesterday at iMedia Brand Summit by the Online Publisher’s Association (OPA) which indicates online users spend 40% of their time on content.

The second most important reason for friending a brand is to interact with the company or other users.  36% say they friend a brand to ‘submit opinions’ and another 33% say they want to connect with other cusotmers. Again the OPA study confirms this insight – 28% of online users’ time is spent on ‘community’ activities.

While this data is about fans and brands in general, it is especially true of Millennials. Gen Y joins brands to gain social currency (content and offers) and to interact with the company and other fans. Paul Parkin of SALT branding in San Francisco was interviewed recently by MediaPost on the subject of Gen Y and their ‘trust’ for brands. The article was widely tweeted for its insight that Millennials trust ‘channels’ over brands (“Fickle Gen Y Trusts Channels over Brands“). Farther down in the article, he commented on the need for Gen Y to interact.

Q: How important are demographics?

A: In some ways, very. Baby Boomers have one set of expectations of brands, and an idea of what it means to trust them. Gen X is quite different. In many ways, they are the brand generation. They latched onto powerful brands that emerged in the 1980s and ’90s, and if you asked most people in that group to name 10 brands that define them, they could probably do it. Gen Y is completely different — they want to multitask, and are much more into “we,” in the sense of collaboration. They want to interact with companies, and with each other.

This conclusion fits with everything we know about Millennials.  The key to attracting brand friends may be primarily promotions and content, but to retain Gen Y fans, its essential to let them speak out to the company and to each other. A brand fan page is really a platform for a conversation, a modern day ‘salon’. The brand hosts the salon, but if it is wise, will ensure that it’s really more about the guests than about the host.