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It's all in creative delivery

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Even if every teen in the U.S. got an allowance of just $10 a week, their annual spending power would approach $100 billion. And obviously they wield a lot more buying power than that.

Teenage Research Unlimited, which conducts semiannual national studies on teen trends and attitudes, says teen-agers spent $155 billion in 2000, up 1.3% from the previous year. VP Michael Wood says TRU hasn't seen indications of a slowdown in teen spending so far this year, but "understanding that the No. 1 source of income for teens is their parents, if their parents are tightening up a bit, you can bet there will be some trickledown effect and teens will feel that. I don't think it's necessarily going to discourage them from spending. They'll just find alternatives for income," such as working entry-level jobs.

The deep-pocketed Gen Y-ers are under the microscopes of a veritable army of teen-watchers at agencies and other marketing companies. Advertising Age Special Reports posed a set of marketing-related questions to five experts:

* Julie Halpin, CEO and co-founder of Geppetto Group, New York, a WPP Group agency that specializes in marketing to young people.

* Dan Pelson, CEO of Bolt, New York, a Web and wireless communications platform for 15-to-24-year-olds, with 4 million members.

* Cliff Sloan, founder and chief creative officer of Sloan Group, New York, a marketing agency whose specialties include the youth and entertainment markets.

* Dave Rosenberg, VP-strategic planning at GMR Marketing, New Berlin, Wis., an event marketing agency owned by Omnicom Group.

* Howard Alport, co-founder and principal at Lipson Alport Glass & Associates, Northbrook, Ill., a design and brand marketing consultancy.

Below are their edited responses:

Advertising Age: Teen spending has been pegged at $155 billion in 2000. How would you characterize Gen Y spending power?

Ms. Halpin: Teens not only have more income than ever before, they have a greater percentage of disposable income than almost any other demographic ... after all, how many adults could say the money they spend is all discretionary? As teens' life-stage task is to sort through all kinds of identity issues, the money they are given or earn all goes to fuel that drive: How can what I buy help me define who I am, to myself or the people I care about? ... they feel comfortable with the choices they make with their own money, as well as the household purchases their parents entrust to them.

Mr. Pelson: When you factor in the influence and impact of teens on household buying decisions, not to mention the global potential for this audience, that number grows tremendously. ... more than one-quarter of Bolt's audience lives outside of the United States, and there are a billion potential Bolt members worldwide. So while the exact amount of money spent by our target audience is difficult to determine with great accuracy, it represents an enormous opportunity.

Mr. Sloan: Officially, there are 31 million teens in the U.S., spending an average of $4,000 a year, for an estimated total of $124 billion. But that's only part of the story. Kids also have a great influence over household purchases ranging from food to cars to home electronics.

Mr. Rosenberg: Teens are affecting and influencing spending trends. They are becoming the style makers for their little brothers and sisters in clothing and music. They are influencing the food selections their parents make.

Mr. Alport: We know that teens have a very strong influence over their family's spending decisions and are influencing 25% to 33% of purchasing dollars. Teens are spending most of their money on clothing, followed by spending on entertainment. After these two items, fast-food, snacks and personal-care products get similar shares of the spending pie.

AA: What would you rate as the most effective media for reaching teens?

Ms. Halpin: For teens, the media environment in which your brand is seen is as important as what your ad says. If you're a mass brand, you can signal that by the mass-appeal channels, programs, dayparts and magazines you select. If you have a more specialized appeal, teens will know that by the funky, niche places where they discover you.

Mr. Pelson: In terms of delivering a one-way message, then whichever network or show had the best ratings with teens on any given night can be considered most effective. But marketers are questioning whether flooding an already oversaturated consumer with advertising messages is impacting product sales. There are enough examples of major brands spending hundreds of millions of advertising dollars against this market and actually losing market share. So "effective marketing," as it is traditionally perceived and implemented, might not deliver positive results.

As a relationship management medium, the key question [regarding the Internet] should be "What's the best example of a company that leverages the true value of the Internet for marketers?"

The answer would be ... sites like Bolt that have built their model on combining reach with data analysis ... Rather than viewing the Internet as another advertising buy, marketers should look to the Internet as a "relationship buy."

Mr. Sloan: Broadcast networks and their cable competitors are shifting their programming schedules to lure the coveted teen audience. Everyone is scrambling to find the next big thing for this audience. But the fact is MTV has got them, and will continue to have them well into the foreseeable future.

Among the broadcast networks, the WB wins the teen girl sweepstakes hands down by delivering romance, relationships and empowerment. ... There's not such a clear winner among boys, who are tuning in to MTV's "Jackass," Fox for "The Simpsons" and are providing the viewership muscle behind the WWF phenomenon.

We're also noticing gender differences again when it comes to magazines. Teen boys are more specialized readers. Their favorite magazines focus on music, sports and videogames. Popular girls magazines are more lifestyle-focused, discussing beauty, people and cosmetics.

Boys and girls approach the Web differently, too. While boys dig the actual technology of the Internet, girls tend [to treat] the Web as a resource. We think of it this way: A boy says, "Now that's a cool tool. Can I take it apart?" A girl says, "That looks useful. What can it do for me?" ...

The best Web-based advertising [for teens] occurs "organically." Teens are savvy. We can't impress them with the same intrusive bells and whistles that make their parents say "Wow!" ...

Also, given the nature of the teen market, if you can deliver your message in a creative enough way, you can reap tremendous benefit from the viral nature of the Internet. Teens will pass along to their friends things that have appealed to them-with the inherent seal of teen approval. No amount of money can buy you that.

Mr. Rosenberg: I like ESPN2 because of their focus on extreme events. The events that combine both a sports and music message are the events that teens attend. The expectation of the teen is that the TV events they consume will fulfill their lifestyle needs-where all parts of the targets' lives converge.

Mr. Alport: The most effective way to reach teens is meet them on their turf. Teens like to hang out together. They are very conversational and their peers influence them. Teens like to interact with a medium and a product. So the marketing message should ... provoke a point of discussion or interaction.

AA: What kind of messages appeal most to teens? What messages turn them off?

Mr. Pelson: Teens are like everybody else. They want utility, things that help improve their quality of life. Too often advertisers think in terms of "what's cool," and that is often a losing proposition for this audience.

Mr. Sloan: Kids don't like being "marketed at." We've observed a definite anti-marketing trend in teen advertising. Teens are experienced and intelligent shoppers, so they cannot, and will not, be fooled.

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