Generation Z, the demographic group made up of 12 to 22 year olds, is making waves with marketers. As noted in a recent profile, this generation controls a collective $44 billion in consumer purchasing power. Yet despite the opportunity, many marketers still struggle to reach this group that has unique media consumption habits while eschewing traditional advertising. What do marketers need to know as they think about how to advertise to this emerging consumer group? Here are three facts to consider.
Age-based segmentation isn’t as effective
Ad campaigns have long been based around the idea of demographic targeting, whereby an advertiser would attempt to reach men between the ages of 18 to 34, or women 55 and older. According to experts familiar with Gen Z, this age-based segmentation is no longer effective when trying to reach this age group. “In the old days, there was one segmentation — that was great and we all loved it,” said Monica Dreger, global consumer insights for Mattel, Inc., in a recent Generation Z profile piece. “Now we have to have smaller, more customized, more lean segments to go through.” According to Dreger this often means marketers use customer behaviors or needs as their segmentation starting point to plan media campaigns.
User generated content is Gen Z’s preferred form of media
It probably comes as no surprise to marketers that younger consumers from Gen Z are much more comfortable with social-focused content sources like Facebook and YouTube. But the reasons why they gravitate to sites like YouTube are less widely understood. According to the profile, Gen Z’s love for social media has a lot to do with an entrepreneurial spirit. “This generation grew up being able to make websites, videos and set up their own store to launch a company before they’re even legal adults,” said Kate Beckman, CEO and founder of Fresh U and a contributor to Cosmopolitan Magazine. For advertisers this means finding ways for the audience to participate more reciprocally in campaigns, be it via comments, “crowd-sourced” content, or simply asking for their opinion.
Gen Z is often their family’s decision-maker
The last big takeaway about Gen Z is their surprising power of persuasion. While it may seem counterintuitive, some experts believe Gen Z consumers have a big influence over family purchase decisions. Consider the process of buying a car, a big-ticket item where advertisers might expect the adults to have the final say. Not so, say the Generation Z experts. “We’ve seen buying a car, buying a household — all of the sudden, the kids are actually at the front of the table,” said Mattel’s Dreger. “They have a seat at the table and their voices are heard. That was unheard of at any other generation.” In other words, advertisers need to account for Generation Z’s purchase influence when forming media plans, even if this generation may not physically buy the product themselves.
Some members of Gen Z may not yet be old enough to drive a car or open a credit card account. But as a number of anecdotes reveal about this surprising age group, they’re already exerting outsize influence over purchase decisions, an important insight for marketers to keep in mind as they design and target their ad campaigns. Expect to hear big things about this increasingly important demographic cohort in the years ahead.