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What Marketers Need to Know About Gen Z—the Big, Influential Group of Anti-millennials

Screenagers. Gen Tech. Post-millennials. Generation Y-fi. Homelanders. iGens. Pivotals. Call them what you’d like, but there’s a good chance your marketing strategy is not calling to them. In fact, according to a recent Nielsen study, Gen Z—the first generation of true digital natives—is only being reached by a tiny 2% of the digital advertising targeted to them. And more traditional advertising isn’t faring much better with this “elusive” demographic, because, well, to use current social media lingo, it’s complicated.

Just because Gen Z is the most connected, educated and sophisticated generation in history doesn’t mean they are Millennials on steroids. Marketers treating them as such are missing the mark—and it’s a big mark to miss. Gen Z wields $44 billion in spending power and will represent 40% of consumers by 2020. With the oldest of this demographic (born 1995 through 2010) just beginning to enter the workforce, researchers are finally shifting their microscopes away from Millennials and toward Gen Z. The picture that’s emerging is one of a wholly unique demographic that will require different engagement strategies. Here are a few take-aways from recent studies to help marketers better connect with this increasingly influential group.

Understand Who They Are
The first post-9/11 demographic, forged in times of economic and institutional instability and whose early years were informed by globalization, terrorism, global warming and disappearing resources, Gen Z is radically different from optimistic me-first Baby Boomers, entitled Millennials and cynical Gen Xers. Pragmatism and frugality figure prominently in these kids’ lives and they expect to work hard to ensure their own futures—and those of others. Given their own expectations that they will have to make hard commitments and sacrifices in order to undo the political, economic and environmental damage wrought by preceding generations, they expect the companies they do business with to do the same. So cause related marketing resonates with this group, as this study shows. Sixty-seven percent of Gen Z respondents were more likely to purchase from brands invested in a cause. But sincere efforts only. Their BS monitors are highly attuned to opportunistic, exploitative or political maneuvering and because they are better than their predecessors at online research, they can determine when brands are truly invested in a cause or just paying lip service as a positive PR move. In the same vein, this highly diverse, equality-focused generation has high expectations for corporate citizenship and is willing to boycott or ignore companies that engage in discriminatory practices.

Always Online But Always On Guard
Even though the numbers of teens who say they are online “constantly” continues to grow (45% now vs 24% in 2014 according to a recent Pew Research Center study), they are not blind to the downsides of technology. Nearly a quarter of teen respondents to the Pew study said social media has a mostly negative impact on their lives while only a slightly larger percentage (31%) saw a mostly positive impact. As a result, Gen Z tends to be more cautious and risk averse in their online behavior, particularly when it comes to sharing personal information. For example, according to an IBM study, less than one-third said they are comfortable sharing personal details other than contact information and purchase history online with brands. And while 62% are prepared to share purchase history details with brands, a mere 21% said they would share more sensitive personal data. Also noteworthy, only 18% said they are comfortable sharing their payment information. For brands that means it’s important to tread carefully and transparently when trying to get the information desired for forging tight relationships with this demographic. While their pragmatism makes them responsive to discounts and deals, having to trade personal information to receive them will be viewed with skepticism or ignored outright.

Entertain Them Where They Are
A better way to engage them is to entertain them, according to a study released by Fullscreen at this year’s Upfront presentations. An Adweek article on the findings reported that Gen Z is highly receptive to branded content and much more likely than Millennials to view brand photos, like or share that content and read product reviews. The kicker is that said content has to be authentic (Gen Z prefers real people or online influencers to celebrities), highly visual and entertaining rather than promotional.

“In an era of increased media fragmentation, brands are finding that the best way to market their products is to create entertainment that consumers actively seek out,” Maude Standish, vp of programming strategy of Fullscreen, told Ad Age. “This is particularly true when marketing to Gen Z, who grew up with the internet and are not only demanding that all brands entertain them, but also that entertainment shifts to behave like a friend. It’s also why influencers are so effective in selling to this generation.”

More reports on the traits and characteristics of this unique generation seem to be coming out at a rapid pace. Given that the oldest of Gen Z are just reaching their early 20s, brands have time to study what makes them tick.  But brands should start working on new strategies soon because by all accounts, Gen Z is like nothing marketers have seen before.