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Episode Seven: Man And Machine
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Editor's note: This article originally ran on Adobe's CMO.com
"People try to put us down, just because we get around," sang Roger Daltrey 50 years ago about his generation. Since that generation, the very end of the Baby Boomers and the beginning of Generation X, we've seen the Ys and Millennials and, most recently, the Generation Zs.
So it has come to pass that the Zs are about to make "a big sensation" with marketers, for, 10 years from now, the first wave of this post-1995 lot will be hitting the consumer circuit. This means, of course, they will be spending their money on the brands that CMOs are in charge of. Marketers must, therefore, get ready because the rules of engagement with the Zs are going to be very different from what they have been used to.
Why? The first reason, according to all of the experts interviewed by CMO.com for this article, is that Gen Z is the first truly mobile generation. The group is not just mobile-first, according to Julie Ginches, CMO of Kahuna. "They're mobile-only."
"The 3Ps of marketing to Gen Z are going to be very different than the 3Ps marketers have known this far," Ginches said. "Marketing is going to have to be personalized, without a doubt. It's going to have to be persistent. We're going to have to know where they are at every point of the customer journey. And it's going to have to be permission-based because they just aren't going to allow or tolerate anything that's spam or irrelevant."
Meet Gen Z
But there's a lot more to Generation Z than just their mobile consumption habits. Members of Gen Z, according to Paul Gottsegen, CMO of Mindtree, are way more socially conscious than generations past.
Additionally, Gottsegen said, they leave digital footprints everywhere, yet marketing to them will be very difficult. "They won't want to spot things as marketing," he told CMO.com. "Kids today–Gen Zers–they don't watch commercials on television. We all grew up with commercials. Even the Millennials got loaded with commercials the way I did a generation earlier. But that doesn't happen between apps and Netflix. The concept of marketing being this obvious thing to spot is totally foreign to Gen Z."
$142.5B 2015 U.S. ad spending for 200 LNA
Gottsegen predicted a marketing model that is more like "The Truman Show," where commercials are built into the programming.
According to Randstad CMO Kristin Kelley, whose company releasedresearch on Gen Z consumers, this group has no appetite to wait in line. Looking forward, they'll want small bits of information, and their ability to access this information will be unprecedented via mobile phones, PCs, wearables, and technology we haven't even been introduced to yet. There will be a plethora of access points that Gen Z uses, which means even more channels and platforms for marketers to cover.
Additionally, Kelley said, the term "global" is pretty much a neighborhood term for Gen Z. They are growing up with Periscope, Skype, and Snapchat, which give the ability to visually see an experience in another country. Their appetite for international opportunities is much greater than generations before, which is something brands will have to consider.
Generation Z, like Millennials, are very entrepreneurial, Kelley said. "What I find really interesting in what our study showed is they're realists, unlike Millennials who are hyperoptimistic people." she told CMO.com in an exclusive interview. ""Gen Z has lived through, in some cases, 9/11 or were born right after it. They understand terrorism. They understand recession. They're not the generation that thinks everything is shiny and perfect. They have a very realistic approach to life."
As a result, she said, a brand that paints a picture of grandeur or makes big promises they don't come through on will not impress.
Kelley predicted that, like Millennials, Gen Z will have a preference to the raw and vulnerable kind of company position that is transparent and honest. "Gen Z will appreciate real stories about real people making real impacts," she said.
Skills Needed to Engage Gen Z
Marketers' skill set is going to evolve dramatically in the next 10 years. According to Mindtree's Gottsegen, every marketer will need to be both left- and right-brain strong to be able to sway the purchase decisions of Generation Z.
"Things are going to be very different," Gottsegen said. "Marketers will need to be statisticians. They need to be quant jocks in the way a Wall Street person was a quant jock in the '80s. They need to be visualization experts because these Gen Zers don't want to read. It's going to be about YouTube to learn how to do a rainbow loom, for example."
But, Gottsegen said, some old-school skills won't disappear. "There's an app today called Crossy Road, and it is basically what you and I would know as Frogger: a little animal trying to cross the road. It's a pretty basic concept, just like concepts such as storytelling and segmenting stay the same, but the delivery vehicle is different."
Brian Wong, founder and CEO of Kiip, said that marketers of tomorrow are going to have to be more hands-on and will need to live and breathe newer social platforms.
"I know I sound like an old man, but I use Snapchat to see what all the fuss is about," he told CMO.com. "I find I have an advantage in understanding what is so addictive about this thing. Why are people going so crazy over it? And I needed to actually see it to understand it. It's much like visiting a country. You can read all you want about it, but until you actually get there, you can't possibly know what's up."
Sheryl Pattek, VP and principal analyst for the CMO Practice at Forrester Research, said that the shift in marketers' skill sets will be very much steeped in technology and understanding what its capabilities are to engage customers.
Marketers also will need to have a rich data background—since almost everything will be connected—and must be able to ask the right questions to determine the best way to engage with the customer base. By the time Gen Z has any real spending power, marketers will have already made the dramatic transition from thinking product-out to thinking customer-in, she said.
"We've already seen customer behavior change to where they're now empowered and deciding when, where, why and how to engage with companies," she told CMO.com. "Companies are having to react to that rather than doing product push to enable customers to find the information that they want to make wise decisions on their terms. That shift will only accelerate over the next five to 10 years and require marketers to stay state-of-the-art in what is happening in customer behavior and learn to react quickly to those changes in customer behavior."
Kahuna's Ginches said she expects wearables will be a big deal when it's time to market to Generation Z. That said, marketing via wearables, she predicted, is going to be the challenge. One reason is there will be no consistency in elements such as screen size and interface. Today we have the smart watch, but 10 years from now Ginches predicted a smart ring and even a smart jacket. Anything can be a connected, personable wearable, she said.
"Marketing technology has to keep up so that there's one view of all of the connected devices on one platform because, otherwise, there's just no way marketers can possibly keep up and be effective," Ginches said.
Gottsegen echoed Ginches' comments. The term "marketing automation," he said, is a bit of a misnomer. Marketers have their listening tools in one place, analytics are somewhere different, and targeting is in a third location.
"There's a lot of stitching together that we do somewhat manually," he said. "What I can envision in the future, what I think is surely going to happen, is it'll be push-button, and it has to be because Gen Z wants everything to be very customized to them."
Tamara Gaffney, principal analyst at Adobe Digital Index (ADI), said that Generation Z wants to see themselves on the screen. "They put themselves as the stars of everything, so marketing will need to morph beyond just personalization to individualization," she said.
According to Gottsegen, the only way to personalize communications on the individual level is through real marketing automation. "I'll be able to have great listening tools and software robots that will automatically, based on the listening tool, develop a quick-turn campaign," Gottsegen said. "The assets, the story, it'll be figured out on it out on its own, and it'll be different for each and every person."
The word "persona" will go away as it pertains to marketing, Ginches predicted.
The CMO of The Future
What does this all mean, then, for the CMO of the future? How is he or she going to succeed in marketing to this unique group? ADI's Gaffney said that, 10 years from now, the CMO role will be much more about creation than activation. "By the time we are marketing to Gen Z—meaning that they have disposable income—the idea of marketing will be more of a gathering- and dispersing-information role," she said. CMOs will be tasked with figuring out how to disperse that information for Gen Z.
Ginches predicted that future CMOs will be the technology, big data, and mobile folks of today. "Those are going to be the skill sets that are needed at that point in time," she said.
She also pointed out that with the plethora of new technology, platforms, and channels 10 years from now, there will be an even bigger market of vendors. The LUMA slide may even need a page two, she said. As a result, CMOs will be managing more relationships than ever before. They'll be responsible for staying abreast of the vendor marketplace and matching the right providers to what their companies will need in terms of technology and support.
According to Forrester's Pattek, today the CMO is mostly known as the chief marketer, so the "O" for officer gets lost. "CMOs really need to step up and assume that role of corporate officer. They have a unique opportunity and a unique perspective to bring the voice of the customer to the C-suites to help drive company strategy overall," she said.
By the time Generation Z is spending, Pattek said, companies will be thinking about corporate strategy from a customer-in view, and that will be led by the CMO. That means CMOs will also have to move marketing from speaking in marketing metrics and marketing language to the language the business understands. Marketing will be much more of a business within the organization, and CMOs will be more accountable for business results than ever before, Pattek predicted.
"So that means driving pipeline," she said. "It means driving profitability. It means increasing business revenue and also then retention, cross-sell, and upsell and lifetime customer value."
Today, many marketers only focus on acquisition and not the ration of business metrics that they will need to think about going forward, Pattek admitted.
According to Kelley, the CMO and CFO will be an important synergy 10 years from now, when CMOs will need to tie programs into the bigger financial systems.
Another big role of the CMO of the future is coming up with the company's story and helping the rest of the employee base—everyone, not just marketers—to tell that story in an authentic way, because Gen Z can sniff out authenticity. Companies need to re-architect how they speak to Generation Z, and it is going to be the job of the CMO to guide the company in the right direction.
"Now is the time to start thinking about it," Kelley said. "Generation Z is going to be 40% of consumers by 2020, and they are going to be the most sought-after population. Only the brand that has really put time, effort, thought, and money into this will be the ones that come out on top."
About the Author
Giselle Abramovich is senior & strategic editor at Adobe's CMO.com. Previously she wrote for outlets including Direct Marketing News, Mobile Marketer, Mobile Commerce Daily, Luxury Daily, and Digiday. Reach her at firstname.lastname@example.org, or follow her on Twitter@GAbramovich.
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