Generation next

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The Millennials are here--and, note to Tom Brokaw--they're being hailed as the next great generation. Naturally, the most pressing question on Madison Avenue is not how they will change the world, but how will we market to them?

Here at the turn of the real millennium, trend forecasters and futurists are pondering new ways of cross-marketing to all of America's biggest consumer groups. First there was the generation of World War II GIs--part of Mr. Brokaw's The Greatest Generation--followed by the Silent Generation and their kids, the Baby Boomers--the group that cemented generational targeting as a discipline.

Then came Generations X and Y, and now there's the "Millennial" generation. Books such as Neil Howe's and William Strauss' Millennials Rising: The Next Great Generation--a comprehensive study of today's teens which discusses recent data on youth habits--are hitting the shelves, and their authors are hitting the lecture circuit.

GENERATIONAL ATTITUDES

In the past, generations were defined largely by the year in which one was born. Now target marketing has reached the point where generational attitudes are discerned and used as a starting point for media planning.

"Actually, we're finding a decline in the use of old-scale demographics," said Tony Wright, chief strategic officer at Ogilvy & Mather, North America. "Now you have a number of brands that kind of cross traditional demographic segments and operate more attitudinally."

He said there are many brands with common behavior across an attitudinal type among different ages. "Unless you're a marketer of kids products, a pure age-sex thing has become almost useless."

Because of the expenditures involved, clients clearly want to feel quantitatively confident about which print or broadcast venues will effectively reach the client, he said. "But whereas that used to be the end point of media thinking, now it's the beginning. ... The difference is between simply reaching the target and building a relationship with the client."

Some dispute has arisen over how to name today's big-spending teenagers-echo-boomers and Gen Y are among the contenders-but all signs point to the generation's tremendous potential for buying power and influence. According to a TRU/Statmats study in 1998, kids ages 13 to 17 spent $141 billion a year, or about $80 a week per teen. In Millennials Rising, author Mr. Strauss cites a 1997 ABC.com poll that showed "Millennials" to be the most popular name for the current generation, some 70 million strong.

"Generation Y was a [popular phrase] in 1993, a term which at that point identified correctly the last third of Gen X," Mr. Strauss said. "The notion has become familiar in popular culture and in marketing to refer to teenagers. But now Y is a little older-those marketing styles are either directed at current young twenty-somethings or they're applying the veneer of X to a short-lived effort to reach teenagers that is not going to work over time." Understanding the new generation as its own animal is key to reaching its members successfully, Mr. Strauss said.

Defining the Millennials as the generation born in or after 1982, Mr. Strauss calls them more numerous, more affluent, better educated and more ethnically diverse than generations past. Millennials also have been trained to be "doers" and "achievers."

"The GI's were the first great generation," said Mr. Strauss. "We now need a new `greatest generation'-one that's responsible and civic-minded. The shoes are there for them to fill. It's harder to become more cynical than the boomers, or more sarcastic than the Xers. The kids aren't going to go linearly from what adults are doing; historically, they never have."

When you think about marketing to generations, Mr. Strauss added, "it's like aiming for a plane-you should aim for where you think that plane is going, not where it used to be."

COMMON GROUND

As a whole, Mr. Strauss said, studying generations is crucial for understanding how a society progresses. Because media trace this progression, generational studies are a mirror to society and a way of forecasting trends. "Lots of purchasing decisions-from the vehicle to the family vacation to computer technology-are made between parents and children, together. So while generational marketing is very useful, the key is to target the generation in mind without alienating everyone else. For example, Monday Night Football, which has tried to market to teenagers-hyperkinetics, explosions, disorder-has pretty much turned off the rest of its audience."

The secret to appealing across generations is to keep the core brand elements timeless, said Lloyd Weber, media director at Levi Strauss & Co. "Self-expression and self-confidence is what we try to communicate at Levi's," he said. "In the 50s it was James Dean and Brando. In the 60s it was the uniform of rebellion. Then it was the 501 Blues which were really popular. Today, women love super low-fit jeans and guys love a loose comfortable fit. `Make them your own' is the new tagline we introduced this year to appeal to all individuals, all market segments."

"Karaoke," Levi's new campaign, features a collage of quirky individuals singing their own version of "Downtown." "The best-scoring spots are broad ones that hit all generations," said Mr. Weber. "The bottom line is that it's really about good advertising that works, and commonalities really work. Teens are the key to the future, but they respond to some of the same messages as the adults they'll become."

In the big picture, "the way to reach Millennials is through Boomers and Xers," said Mr. Strauss, "and vice versa. It's a very synergistic relationship."

RESOURCING TO THE INTERNET

With all these segments of the population being cross-cut yet again by internal divisions, media buyers and planners have thought hard about how to reach the whole populace and at the same time appeal to each of these generations specifically. The answer, said Don Ziccardi of Ziccardi & Partners, New York, may lie in the Internet.

"Each generation has different aspirational icons. At the same time marketers speak individual messages to those segments, they need to find the `common denominator,' " said Mr. Ziccardi, whose agency specializes in luxury clients. "One of the ways we can transcend demographics is with Web access."

In a new study that assesses segments of consumers in the luxury market through a generational lens, Ziccardi & Partners used Greenfield Online, a New York Internet research company. The study included a Web survey of 10,000 people (with incomes up to $125,000) and personal interviews with 50 individuals (with incomes of $250,000 and up). The data were gathered and processed in two weeks.

Though 30-year-old "dot-com millionaires" might have different socioeconomic and generational values than older generations who now appreciate money without guilt, the Internet seemed to resonate in significant ways across the board.

"Many audience segments utilize the Internet, no matter what their age or spending patterns," Mr. Ziccardi said. "As a result, we recommend advertising strategies that include e-mail and targeted Web sites to develop consumer relationships." He also noted that the most exclusive of the luxury consumers remain unlikely to be swayed by e-mail.

How questions are posed on surveys now is "very much psychological and about self-perception," and less about "fitting into the old prescribed socioeconomic classes or categories," Mr. Ziccardi explained.

In Mr. Ziccardi's experience, numbers are important, but "not the bottom line" to clients and media buyers. "In the research that proves to them whether or not their target consumer is being reached, they want to have qualitative definitions of who the audiences are."

DEMOGRAPHIC VS. PSYCHOGRAPHIC

The phrase "It's not a demographic, it's a psychographic" is commonly heard from marketers to describe the appeal of their products to a broader audience. Even marketers who traditionally target an older demographic, such as Architectural Digest, are beginning to target younger generations. In light of these shifts, do psychographics matter more than demographics in market research, or is it some combination of both that reveals the most?

Just completed is the Architectural Digest Young Affluent Consumer Study (YACS), a year-long joint research project the magazine did with global media company Carat North America, New York. Surveying consumers under 40 living in million-dollar homes, the study explores the attitudes, values and purchasing priorities of these consumers and their impact on today's marketplace.

Amy Churgin, publisher of Architectural Digest, describes the study as "mostly psychographic". She finds a blend of "demographic and psychographic lines of questioning" most useful in terms of researching their audience. "We want to know where they process their media, where they get their information on products they want to buy," said Ms. Churgin. "That has a lot to do with how they perceive themselves."

Not surprisingly, the study found the Internet a top resource with electronics and technology purchases, while "magazines, experts and friends/relatives" were also frontrunners in home, fashion and jewelry purchases. "Personal recommendations are a big deal-the buzz, what other people think. From that, advertisers then know where to put their information to reach these consumers," Ms. Churgin said.

Carat North America President David Verklin agreed on the importance of psychographic and demographic data in tandem.

"Our focus on research is a combination of qualitative and quantitative insights. This `millionaires under 40 study' is our answer to British account planning, to get a better sense of emerging affluents," Mr. Verklin said. "When you take a closer look, you get into incredibly different market segments. For these under-40 millionaires, they rationalize every purchase based on demonstrable product benefit. This is something you find out only by doing qualitative research: going into their houses, 40 one-on-one interviews, combined with 5,000 quantitative studies-giving a very textured and three-dimensional picture of the target."

He added that Internet usage was also different by geographic distribution, something media buyers also should pay attention to when allocating resources.

Kevin Coyne believes that technology has shifted more attention to content. As executive VP-director of media and new technologies at Bates North America, New York, he's found that because technology allows advertisers to have more effective message deployment, "the details of those messages are placed under even more scrutiny."

"I'd say both kinds of information-demographic and psychographic-are important today. But as we move into the future, psychographic [information] will become particularly important to understand what kinds of emotional triggers and content motivate people."

The issue is further complicated, he said, by all the different channels available to deploy messages. "It's not just a simple media plan anymore; it's a full spectrum of how to deploy messages in different kinds of environments. Content is key, and it seems to be an emotional thing with young people." This, he says, is where the psychographic meets the demographic. "The medium is just as important as the message, because it depends on whether or not kids will get the message where they are. The young generation today is also very media-savvy; your messages have to be smart and fresh so they'll listen despite the bombardment that's occurring."

As for this newest generation, Mr. Strauss described the current time as "a spot similar to what the early 60s was for boomers, where what is being provided for them doesn't provide for where they're going."

"There will be enormous rewards for companies who can figure this out a little earlier-for Millennials, Harry Potter [books are] a good example of something that reflects the generation in a totally unexpected way," Mr. Strauss said. "It's important for marketers to realize that a generation is more than a marketing construct, it's a force in history. It's a span of birth years that a society requires a group to reach full adulthood. And it's a tremendously influential time."

Contributing: Laura Q. Hughes

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