WORDS TO THE Y'S: GENERATION Y IS YOUNG, DEMANDING AND MEDIA-SAVVY AND IT HAS MARKETERS DROOLING.

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Prosumers. Now there's a new word you may be hearing more often.

It describes the nearly 80 million U.S. youngsters born since 1977, commonly known as Generation Y. The group's uniquely proactive approach to buying earns them the special name, says Johann Wachs, vice president of strategic planning/kids connection at Saatchi & Saatchi advertising.

Prosumers, says Wachs, are consumers who become producers by dictating what they are willing to buy. Outnumbering America's 77 million baby boomers, they already are shaping up as a formidable and unique marketing challenge. Barely into their 20s, the oldest of these Generation Yers are unimpressed by advertising that tries to tell them what they need. Armed with the Internet's enormous informational resources and weaned on instant interactive media, this group is certain to have a profound impact on future products and how they are sold.

"The new consumers are the kings and queens," observes Jac Nasser, president of Ford Motor Co. "This is a group that is the most media-savvy, information-saturated and self-defining ever. They do not want a brand to define them; they define the brand."

Ford is trying to tailor future products to the expectations of Generation Y consumers, the oldest of which are entering the car-buying market now. "Generation Y will not only change the way we advertise, but the way we design cars," declares David Ropes, Ford's director of corporate advertising and integrated marketing.

One certain change: Features such as cellular phones, paging and e-mail will be voice-activated. Says Ropes, "We will have to have that in our cars and trucks, or we will lose."

Open to communication

That doesn't mean Generation Y consumers are immune from advertising. On the contrary. Studies show they like communicating with and being connected to brands. But for many marketers, that means establishing an unprecedented level of interaction with their customers.

"What they want is community," suggests Myra Stark, senior vice president of consumer insights at Saatchi & Saatchi. The firm conducted a six-month study of 200 Generation Yers last year, concluding the young people are very open to marketing courtships and relationships. "What community does," Stark says, "is allow Gen Y to become interactive and proactive, not just passive."

Another study by Inteco Corp., a marketing intelligence firm in Norwalk, Conn., says regular Internet users who watch TV simultaneously are more likely to visit a Web site advertised on TV. And they show a higher degree of tolerance for advertising than most people. These Tele-Webbers, as Inteco calls them, are mostly 18- to 34-year-old males. Over a three-month period last year, Inteco found Tele-Webbers made 25 percent more purchases than the average for all Internet users and spent 50 percent more.

"These kids want to be respected," says Liz DiPilli, partner at Project X, a research consulting firm in New York that specializes in the youth market. She has studied young consumers for Volkswagen of America and Pontiac.

"I tell the carmakers they must create an emotional attachment to kids," DiPilli says. "Concerts are good because it says a brand spent money to bring them pleasure."

Tapping in

Daewoo Motor America, which directs most of its marketing toward young buyers, plans to have a Web site up this year that will make financing its cars easier. The company's dealer-owned stores also are sponsoring events at restaurants and college sporting activities.

Nissan North America Inc. has increased its budget for marketing to youth by 30 percent this year. One example: The company is supplying lifeguards with Frontier, Xterra and Pathfinder trucks to patrol Los Angeles County beaches and is spending $1 million for signs on the trucks and at lifeguard stations.

Nissan Division also wants to sponsor rock concerts. "These are the next generation of customers, and it's just smart business to invest into a relationship with them," says Mike Seergy, Nissan Division general manager.

Saatchi's Stark agrees. "There is no more potent symbol for teens than cars," she says. "You're talking a very powerful symbol. Auto marketers should tap into

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