The foundation of marketing to any audience is understanding who they are, how they behave and what drives their decisions. The business opportunity presented by millennial consumers (those born between 1980 and 2000) is immense. They are 92 million strong in the US. By comparison, Gen X amounts to 61 million and Baby Boomers take 3rd place at 77 million. Inspired by the work of Keith Niedermeier, director of the undergraduate marketing program at U Penn’s Wharton, here are some key points about the major forces that have shaped the lives of the millennial generation and what it is that makes them unique. Niedermeier has been teaching millennials since they started college 18 years ago.
They speak fluent digital
While nearly every consumer age group uses digital devices and media today, Niedermeier believes that millennials have a level of digital mastery that goes well beyond their older peers. “I think they use technology in a much more native fashion and integrate with it in ways that I just don’t think people in previous generations quite comprehend. I think that’s really changing the way they consume music, the way they consume media, the way they react to marketing,” he said in a recent interview with Wharton’s radio show Marketing Matters. What this means for advertisers is that campaigns need to be considered with these digital formats in mind. Typically that means video, but more specifically these days it also means social media and mobile. Designing ad creative with its intended digital medium in mind (for example, vertical video for mobile) can aid in its ultimate performance.
They were greatly impacted by the financial crisis
The layoffs and lasting impact of the 2008 financial crisis hit the older millennials early in their careers. The result, says Niedermeier, is that they appeared to become very conservative with their financial investments. But there’s an interesting twist. Rather than become broadly risk averse, what we actually saw was a shift in their risk tolerance. Having lost money in traditional 401(k)s due to layoffs, they developed a mistrust for institutions and traditional investments. This group has shown more of a tendency to invest in their own start-up, or that of a friend, or investing in property. While inherently more risky, these types of investments seem to resonate more with a group who got burned early on by the economy.
Their media landscape is fragmented
Niedermeier’s research shows that millennials are comfortable navigating an increasingly fragmented media and cultural landscape. The shared cultural experiences of movies, television and music are not what they were just one generation earlier because of the fragmentation of those industries, he says. “From a marketing perspective, that becomes a huge challenge because there’s not one band or one pop star or one television show that everyone connects with.” And without that, targeting millennials as one audience is no easy task. But Niedermeier believes there are two key drivers that influence this group’s decisions: value/price and recommendations. Easy access to information underlies both of these. All that’s needed is at their fingertips. This marketing prof cautions that brands need to be consistent in their value prop across all touch points with their millennial customers in order to win their loyalty. It’s never about just one sale.
They are skeptics who need proof
Millennials bring a healthy dose of skepticism to media and commercial messaging. This means they seek out information from a variety of sources before making decisions. “It’s really this combination of the anecdote, their own research data, multiple sources. It’s connecting the data and their experiences together,” says Niedermeier. While this might make it tough for advertisers to connect with this age group, the brands that put the right effort into creating great products, building trust, and utilizing the right advertising channels are in a great position to build long-term loyal relationships with millennial customers. One way advertisers can do this is by using social media as a distribution tool for video campaigns. The personal and shareable nature of social makes it easier to facilitate word of mouth.
Millennials are one of the toughest consumer groups to reach. Their fluency with digital media, interest in a diverse range of media sources and healthy skepticism can all make marketers’ jobs more challenging. But the marketers that truly take the time to get to know this critical age group and connect with them on their terms find that the effort can pay huge dividends.