Courting Millennial and Gen-Z Money
eet Millennials and Gen Zers, the new kids on the spending block. Despite being young, hip, energetic and constantly choosing alternative ways to make a living, GenZers alone have the spending power of 140 billion. These two generations are currently shifting how brands approach and engage with them. The retail sector alone has seen massive changes, the 2010s saw the bankruptcy and closure of many iconic brands. Of course this shake up was also as a result of more direct to consumer companies and e-marketing sites, who are able to provide a more personalized engagement, but still other brands managed to survive while maintaining brick-and-mortar stores. The difference, their understanding of how to court this generation. For example, in 2017 Gucci reported that 50% of its revenue came from millennials. This percentage has jumped to 60%, with the fastest growing consumer segment being Gen Z. A feat made possible by employing a millennial shadow committee, consisting of millennials.
For brands new to the market, or existing brands new to the Gen Z and millennial segment of the market, the challenge is often how to introduce oneself. Hence digital advertising. This is the generation that grew up with smart phones and are critiqued for being hunched over on their devices. The solution seems simple, buy ad space on social media giants, Twitter, YouTube, Facebook, twitch etc. These are effective ways of capturing younger generations for purchase power as well as political power. However, this is also the generation that grew up with ads, has learnt to become spontaneously blind to non-captivating ads. This may be through ad blockers, changing channels on television, waiting eagerly for the ‘skip ads button’ while simultaneously not seeing the ad or simply spending a little more for ad free premium options. The digital advertising space as relates to this demographic has to be re-imagined. In our internal survey of over 1000 millennials and Gen Zers, the findings replicated our experience; they have become experts at seeing through ads, ignoring blatant ads, choosing the sites with fewer ads, noticing sneaky ads shrouded as information centers, opting rather to spend with companies offering authenticity and community.
Authenticity and community
Bo Finneman, a McKinsey Partner, noted aptly that there is a shift in values. “They’re looking beyond tangible products and actually trying to understand what is it that makes the company tick? What’s its mission? What’s its purpose? And what is it actually trying to build for us as a society? And to me, it’s that lifeblood of thought that’s been quite compelling for them.” Emma Spagnuolo added, “It has now taken on the life of the celebrity, where these are players who are less trusted by the Gen Z population. So now, instead of needing to have one major influencer—where you could shift your marketing money from a magazine to this influencer—now you have to cultivate this community of micro-influencers who each talk to 30,000 people.” This podcast series occurred on September 28 2020, and shows that these generations see beyond the quick trick of celebrity marketing, where even through these mega personalities, there still is some mistrust. The Gen Z and millennial are more than willing to drag celebrities promoting inauthentic products. Still, Nike has done it effectively with athletes and Peloton stock prices rose after its partnership with Beyoncé Knowles. The difference lies in partnership not just a plug and play.
Partnership v Plug and Play
As companies undergo higher scrutiny so are their ads, boards, ethos and products. French Billionaire, Francois-Henri Pinault, whose company controls giants like Gucci, stated that Brands should be taking bold positions against the mistreatment of women. This marks a shift of company- consumer relationships. The consumer is not just purchasing a product, she/he is buying the whole company and its associates. The ads have to reflect this, the makers of the ads have to reflect the ethos of the generation, endorsements have to be grassroots (through micro and macro influencers) as well as larger than life select, aligned celebrity endorsements. How the brands spend money, and who the brands spend money on, has to reflect this. Twitter trends show that GenZs and Millennials are willing to forgo established brands where the brands are not diverse, do not spend diverse and do not grow diverse. Brands therefore either get it or just don’t.
Those who get it and those who don’t
Brands that get the above reflect this in the ads they make, who they choose to make their ads and the content of their ads. This makes the difference between an ad that will be watched on YouTube and an ad whose cost of production will have gone to waste, failing the 1 second relevance test by this picky demographic. The sweet spot are those who turn ads into desirable content and will the consumer into watching 20 minutes of production geared toward selling them one idea. Brands are shifting their ethos, scrambling to look more diverse before the next twitter storm, and developing partnerships as opposed to ‘hit and run approaches to marketing’.
The message and the messenger
INCMMN is a Millennial and GenZ company. We get it because we are it. This company was designed to meet all the check boxes of this specific demographic. Let’s see:
- We partner and invest into the careers of all our creators. This means a portion of our profits will go into investment into their communities and goals. This may be through educational platforms, helping grow our creative partner’s online magazines, communities or even studios.
- We create content that millennials and Gen Zers would like because the company is filled with Gen Zers and Millenials. Our creative partners also enjoy micro and macro followings, allowing them to keep a hand on the pulse of this demographic. Listening in and shaping it.
- We are diverse. Not in the “one or two people” kind of way, but rather our stats are as follows; 35% Caucasian, 23% Latinx, 22% African American and 20% Asian American. 55% male, 45% female and 30% LGBTQIA. Our diversity runs all the way to the founders of INCMMN, we weren’t scrambling to fix the problem, we built us with diversity in mind.
- We are nimble and flexible, employing a low waste business model allowing us to be as small as the company needs or as large as the vision and budget allows.
- We partner with adtech innovators allowing us to keep brands at the edge of technological innovation. They become trend setters through us.
As funds spent on digital advertising are constantly increasing, brands are also shifting who they spend their money on. The realization is simple, the message is as important as the person, in this case company that conveys it.
Grace Guyatu Diida
Growth and Strategy, INCMMN