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Around the time that millennials overtook baby boomers as the largest generation, another sea change in demographics was happening: Gen Z entered the workforce.
Generation Z is the group of 72 million people born between 1996 and 2010, which places the oldest Gen Zers in their early 20s. Until now, they have not had enough disposable income to be a priority for most marketers. But that’s changing.
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Exclusive data from Nanigans survey of 100 U.S. digital advertising decision makers found that 62% of survey respondents consider Gen Z a top or significant priority versus 38% who don’t. While baby boomers have more money than Gen Z, more advertising decision makers consider Gen Z a higher priority than baby boomers. Marketers already know that brand loyalties are set when people are in their early 20s, and that’s overwhelmingly true for Gen Z.
While marketers have focused on millennials over the past few years, Gen Zers are becoming a priority for digital outreach because they’re the first “born digital” generation, and they are growing quickly in size and spending power. Right now, Gen Z makes up 25% of the U.S. population, but in two years they will account for 40% of consumers. This generation already controls some $44 billion in spending, and that figure will rise as they hit the workforce in earnest.
Smart marketers realize that digital-first Gen Zers present a unique opportunity to instill brand loyalty early. As one marketing director noted in our survey, when someone becomes a customer at a young age, they will spend three times as much over their lifetime.
Another reason for the focus on Gen Z is that their social media activity means they have tremendous influence on channels like Snapchat, Instagram and YouTube. They’re also relative experts on these platforms. In addition to their social media expertise, they are more influenced by these channels to make online purchases than any other generation.
Gen Zers have sometimes been called “millennials on steroids” because they’re even more comfortable with digital tools and media. A millennial who is now in her mid-30s, for instance, grew up with dial-up internet and no smartphones. But even the oldest Gen Zer was just a tween when the iPhone was released in 2007.
For Generation Z, digital media has always presented itself as a seemingly endless array of options. That means they’ve developed a necessary filter for both media experiences and digital advertising. In a recent Kantar Millward Brown survey, only 25% of Gen Zers said they liked online search ads. Other types of digital advertising, such as mobile display ads, fared worse.
“Smart marketers realize that digital-first Gen Zers present a unique opportunity to instill brand loyalty early. As one marketing director noted in our survey, when someone becomes a customer at a young age, they will spend three times as much over their lifetime.”
Gen Zers view their smartphones as extensions of themselves more than millennials and Gen Xers, so a five-second Instagram video will resonate more than, say, a TV commercial. The best advice for marketers, then, is not to abandon digital advertising, but to adjust ad creative and approach social media in ways that ensure your brand is perceived as authentic and accessible.
Humor is also a plus: The Kantar Millward Brown survey found that 72% of Gen Z said humor increases their receptivity to ads. Another way in is through personalization. This generation happens to be coming of age as tools that carry out such personalization — predictive analysis and data segmentation — are evolving.
Generation Z will make you work harder for their attention and won’t fall for traditional advertising tactics. Savvy marketers will figure out a way to offer Gen Zers something of value — whether it’s entertainment or personalized information — that also blends seamlessly with their online identities, earns their trust and entices them to make a purchase.