Gen Z: A Unique Challenge

It’s back to school season and as Gen Zers head to college, marketers are realizing that they present a unique challenge. Ilyse Liffreing of Digiday reports that, while often grouped with millennials, Gen Zers are at “different life stages, care about completely different things and need to be programmed for and communicated to entirely differently.”

This realization has spurred an effort by agencies to begin researching this audience. Characterized by a progressive ideology and short attention span, Gen Z is very digitally savvy, having never known life without internet access. This generation also saw their parents go through a recession, in turn affecting their own purchasing behaviors.

Agencies and brands “are bulking up their own Gen Z expertise.” In order to help brands establish a connection, the Day One Agency created a website where Gen Zers answer questions covering various topics and the NFL partnered with AwesomenessTV for a series targeting Gen Z fans.

Sony Music Entertainment even created its own video production company, called Astronauts Wanted, to reach Gen Z. When asked what sets this group apart, Christine Murphy, Astronauts Wanted’s svp of branded entertainment, said, “They kind of have this heightened sense of intuition… and they really are progressive.”

 It is estimated that by 2020, Gen Z will number 2.6 billion and have an annual purchasing power of $44 billion. It would be wise for marketers to begin differentiating between millennials and Gen Z.

Gen Z and the Future of Television Advertising

In an effort to understand the future of television advertising, Tremor Video and Hulu partnered on a study to research the viewing habits of Generation Z compared to Millennials and Gen X. Gen Z is not only watching less television than their forebears but how they choose to access shows and movies is unique.

Even the language differentiates generations. The vast majority of Gen X say “watching TV” means access through cable or satellite whereas the majority of Millennials and Gen Z consider watching by an online source to qualify.

The reliance on streaming videos allows Gen Z to watch more at one time than through traditional cable or satellite. As reported in “How Gen Z Connects to TV: Exploring the Generational Divide in the Future of TV”, 60% of Gen Z watch multiple episodes in one sitting compared to just 44% of Gen X.

In an interesting twist, Gen Z is actually more receptive to advertisements and are the most likely to share video ads through social media. However, advertisers should be aware that Gen Z expects ads to be relevant to what they are viewing.

With 48% of Gen Z saying they watch less television than their parents, it would be wise to target ads thoughtfully. By advertising across platforms (48% of Gen Z say they browse social media while watching TV) and reducing ad loads, advertisers can reach Gen Z when it most counts.

Back to Basics with Generation Z

As Generation Z grows into young adults who hold a little bit of spending power, marketers are eager to see how their path to purchase compares to the generations preceding them. Since Gen Z is technology savvy, one would assume that their behavior would revolve around the digital world.

However, a study conducted by Accenture shows something a little different.

Older Gen Z consumers (ages 18-20) actually prefer purchasing at physical brick and mortar locations. In fact, 77% of older Gen Z consumers would rather purchase in-store.

When compared with Millennials, Gen Z shoppers lead the way with in-store and mobile shopping while Millennials still lead when it comes to desktop and tablet.

The difference being, Generation Z consumers are influenced greatly by social media on what to purchase. In fact, 72% of US Gen Z survey participants said they want to make purchases directly from social media. Half of the participants said that social media inspires them to purchase products, and one third of respondents have increased their use of social platforms specifically to inform their decision-making within the past year; as shown by the chart below.

Going beyond social media, Gen Z consumers are open to developing shopping methods like voice-activated ordering (45%), curated subscriptions (77%), and automatic replenishment (66%). 

Jill Standish, senior managing director at Accenture, says, “I think the key takeaway for marketers is you have to be listening in social media. You’ve got to be there, and you’ve got to be inspiring.”

Gen X Surpass Millennials in Social Media Usage

Surprisingly enough, Millennials are not the strongest social media users of the bunch. That’s right, according to Nielsen; Generation X (ages 35-49) spends the most time on social media at nearly 7 hours per week.

Millennials do fall in second place with over 6 hours on social media weekly. Across gender lines, females spend 25% of online time on social media while men only reach the 19% mark.

Sean Casey, President of Nielsen Social states that 39% of heavy social users believe that finding out about products and services is an important reason for using social networks.

Thirty-five percent of heavy social users say that special discounts are important and 29% say supporting their favorite brands or companies is important.

On top of that, women are likely to interact with social and television simultaneously. 

Sixty-one percent of unique Facebook users who discuss television on the social network are female.

Generation X females may be the best people to target with a mix of television and social. 

Reaching the Youth of America: Generation Z

Today’s youth, those born between 1995 and 2012, is known as Generation Z. These kids (now between the ages of 4 and 21) of America have grown up with more technology than the Baby Boomers could have imagined. Because of that, they’ve consumed more “screen time” than the generations leading them. For advertisers, this fact brings forth positive opportunities and a few negative drawbacks.

DEFYMedia studied GenZ (people 13-24 years old*) and found that many individuals watch video from the time they wake up to the time they fall asleep. Forty percent of those studied reported engaging in video watching while at school or on the job.

Further, DEFYMedia reports the top three reasons for video watching are boredom kill/time filler (77% of respondents), keep up with shows, sports, YouTubers, etc. (63%), and stress relief/wind down from the day (61%).

More importantly for advertisers is how this generation is consuming the videos that they’re watching. Below is a chart showing the platforms that GenZ uses for viewing videos.

Digital Dominates The Menu
Platform	% Viewing
YouTube	85%
Netflix	66%
Cable/satellite TV	62%
Facebook	53%
Instagram	37%
Snapchat	33%
BluRay/DVD	33%
Vine	27%
Hulu	25%
Digital buy/rent	22%
Amazon	19%
Twitter	19%
Tumblr	14%
HBO Now / SHO.com	12%
Twitch	10%
Sports apps	9%
Sling TV	2%
Source: DefyMedia, April 2016

Of these platforms, the GenZ respondents said that they just “can’t live without” YouTube (67%), Netflix (51%), Social Media (48%) and lastly Cable/satellite TV (36%). The usage of free online streaming is the most popular among this generation making up 12.1 hours weekly of viewing time where subscription services like Netflix and Hulu only collect 8.8 hours a week and Cable/satellite TV coming in last with a measly 8.1 hours per week.

From this, advertisers now know where to reach the youth of America; the hard part is how to reach them. Of those surveyed, a little over half are okay with a 1-minute pre-roll spot, however that figure jumps to 83% if the pre-roll is reduced to 15 seconds.

Advertisers must also create content that is short, sweet, and to the point to reach the generation who is accustom to 6 second Vines and Snapchats that disappear.

*The birth years in which a new generation group encompasses varies between sources thus the discrepancy between ages in this blog.

A Small Age Difference Makes for a Big Buying Difference

eMarketer reports on, “How Younger and Older Millennial Shoppers Differ”. For this study, millennials are looked at through a more detailed lens.

According to the Bureau of Labor Statistics, the older millennial households (25- to 35-year-olds) spend an average of $49,547 while households with younger (those under the age of 25) millennials in-charge spend an average of $32,179. The Bureau compared spending on things like furniture, healthcare, pets, and entertainment, all of which the 25- to 35-year olds spent significantly more.

From an advertiser’s standpoint, this information can be very useful. Since we know that older millennials have more money to spend on all the “extras” in life, we can accommodate more of the budget towards these consumers, whereas it may be beneficial to target younger millennials with less expensive or budget friendly advertisements.