In depth: The art of dealing with Generation Z
- 14 August, 2018 07:22
The generation after Millennials, Generation Z - defined as people born from the mid-1990s to the early 2000s - represents a dominant and powerful group. And given they’re considered to become a larger cohort than both the Baby Boomers and Millennials, brands must increasingly craft an approach that relates to this ‘powerhouse’ consumer group.
CMO reached out to five experts to ask how brands need to market to Generation Z. First up, we asked how the industry defines Gen Z and what’s unique to that particular generation. We then deep dived into tips and strategies brands need to consider and deploy in order to win over this lucrative customer segment.
What makes Gen Z tick
Ogilvy head of strategy, Ryan O’Connell, said technology is in the blood of Gen Z as an all-encompassing part of their lives, and marketers should recognise this.
“Certainly, the most defining aspect of this particular generation is that they have no concept of what the world was like before the Internet. ‘Pre-internet’ is their equivalent of ‘Before Christ’: It’s unfathomable, ancient and archaic to them,” he told CMO. “Considering the role the Internet inherently plays in their life, the notion of ‘digital’ is completely foreign; that is simply not language they use. ‘Digital’ is just their life. They’re hardly ever offline and a mobile phone may as well have been placed in their hand at birth.
“It’s vital brands, ideas and messages recognise this. Though this has a number of implications for marketers, the most important one is the most obvious: Channel selection when speaking to this audience.”
For VML strategy director, Dave Di Veroli, Gen Z represents the “age of abundance”.
“Gen Z, like any other generation, is shaped by the culture and the technology that surrounds them. They are the first generation to grow up with computers in their pockets, delivering new ways to communicate, access information and be entertained. Their expectation is everything is in abundance and on-demand, making it a much more competitive landscape for brands to compete in,” he commented.
Di Veroli also labelled Gen Z the “generation of choice” and said it’s never been more difficult to capture attention.
“In an age of unparalleled choice - of content, channels and ways of communicating - the balance of power is firmly in their hands,” he said. “They no longer have to put up with ads to get to great content; they can skip over them on YouTube, fast forward them on TV or avoid them all together streaming Netflix. So where does that leave brands?
“Marketers need to shift from creating ads to creating experiences.”
Di Veroli noted Snapchat as one platform that pioneered augmented reality to deliver fun interactive experiences. “It’s a different way of engaging audiences, through pull instead of push. We have seen first-hand how McDonald’s enticed 3.5 million users to turn their heads into Big Macs, voluntarily engaging with the brand for over 20 seconds,” he continued.
Where prior generations see function or utility, Gen Z sees fun, connection and emotion, WP Engine CMO, Mary Ellen Dugan, said. She pointed out Gen Z influence tens of billions of dollars in annual spending and will soon be the driver of every major consumer trend. In fact, it’s predicted that by 2020, Gen Z will be 40 per cent of all consumers.
“Gen Z doesn’t distinguish whether they are online, on an app, in a social network’s platform or walking around with their smartphone. For them, the digital world is ubiquitous and blends seamlessly with the real world,” Dugan said. “Their digital experience is their human experience. Unlike their predecessors, who use the Internet mainly to source information, our research has found 86 per cent of Gen Z rely on it primarily for social media and entertainment, demonstrating a marked shift from ‘inform me’ to ‘entertain me’."
Up next: Clear steps towards better Gen Z engagement
Understand the motivations
So what should brands me doing to engage Gen Z? Several experts suggest marketers should meet them where they live, and know the end game.
“They much prefer to ‘discover’ things, rather than be told them. This is probably becoming truer for most audiences now, but particularly this audience,” O’Connell said. “Gen Z like to think of themselves as savvy, and to be fair, they’re right: They are savvy. They have so many forms of entertainment available to them - and in many cases, the technology to turn off messages that interrupt that entertainment - that you can’t advertise to this crowd; you need to entertain them.
“If you’re not an integrated, seamless, valued part of their busy, multifaceted, multimedia, multitasking life, you’re wasting your time and your money. Again, that’s not necessarily a bespoke insight – all audience are becoming like this – but woe betide any brands that fail to heed this lesson with Gen Z.”
Like O’Connell, Di Veroli saw this generation craving the “freedom to communicate” without consequences. “This desire has driven the rise of ephemeral communication. A direct reaction to what Facebook and Instagram delivered, places to project your idealised self, curated perfectly for the world to see,” he claimed.
“This saw the meteoric rise of Snapchat among this age group, and soon after saw Instagram and Facebook pivot to offer ephemeral stories in order to combat the decline in engagement rates.”
Ideally, successful brands have found ways to enhance users’ experiences, not get in the way of them.
“These platforms are giving people a way to connect when they have nothing really to say. Brands then have the opportunity to help them look more interesting, more entertaining or more enviable,” Di Veroli said. “One way is to delve into the world of branded photo adornments such as Bitmojis, lenses, stickers and filters. Another way is to deliver true utility like we delivered with McDonald’s Snaplications, where we removed the friction of applying for a job by tailoring it to the channel these consumers most frequent.”
O’Connell also recommended marketers spend some quality - and qualitative time - with Gen Z.
“There’s no better method of feeling old and out-of-touch than doing so. However, you soon learn these guys have their own language, their own version of ‘cool’, and can smell old people trying to be ‘down’ with them from a mile away,” he commented.
One invaluable tactic Ogilvy used was hiring a ‘teen panel’ of 18 teenagers on the payroll for a particular project. Over a period of three months, they came into the agency, to ensure and were involved in every step of the process, making sure insights, strategies and ideas were always being true to them.
“It ensured the work we eventually created was super relevant, and in an oversimplification, just ‘right’,” O’Connell said.
Positioning the next generation as customers
It’s worth pointing out Gen Z is an emerging generation. Kantar head of brand, Gareth O’Neill, agreed GenZ’s spending power is currently low, and for many, parents remain the main shopper. For those now working, income is still generally low, too. But marketers ignore them at their peril.
“As their income grows as they advance through the life stages, marketers will need persuade this cynical, savvy, connected generation to become customers – mental and physical availability alone will not be the success factors,” he said. “What’s become even more apparent in the last couple of years is that the marketing industry still has a long way to go in understanding how best to operate in the digital world. High-profile criticism, scandal and soul searching is helping focus, but the pace needs to pick up again as the increasing disposable income of digital and mobile natives will drive another step change.
“That said, remember digital is not the only route – traditional media is still massive for Gen Z, and those formats that have many benefits. We also need to understand how Gen Z’s attitudes and behaviours will likely flex as they progress through life stages and their inevitable influences.”
Like O’Neill, Di Veroli said brand behaviour has never been more visible. “This generation is more acutely tuned into how brands behave more than ever before,” he said.
“While in the past brands could make claims that remained largely unchecked, now every action is documented and broadcast across social media in a matter of seconds. We are part of a global community where something happens at a Starbucks in Philadelphia not only reverberates across the US, but across Starbucks globally. “This means brands today need to be on the front foot. They have to be agile and able to respond to events quickly. I have seen this first-hand. If brands don’t shape the conversation, the community will, and you don’t want to be at the mercy of the crowd’s opinion.”
Getting more granular, O’Neill said social media is omnipresent for Gen Z, meaning instant access to ideas across the globe, an ability to influence these and be a part of global dialogues.
“This creates an accelerator effect: Quicker adoption cycles for fads, fashions and brands. But it also means these can be much quicker to fail,” he said. “We also see a far more purposeful use of platforms, for example, such as Instagram for image and Snapchat for real life. Gen Z will instinctively use several social platforms simultaneously. For brands, it’s about being present, relevant, credible and adding value where the conversation is taking place.”
According to Kantar’s Connected Life study, Gen Z are the generation most likely to agree overall branded content they see on social media is relevant. Yet the majority still say it’s not relevant.
“When it comes to ads, they like short and sharp – as digital and social natives they are experts at filtering what’s relevant plus important. You’ll probably need to give the option for depth, but don’t ramble, especially if you’re interrupting. And let’s not forget AdBlockers, which are more popular with this generation,” O’Neill said.
“The opportunity is Gen Z are happier than any other generation to share personal information and more open to automation when it provides a benefit, opening the door for marketers to enhance their experience.”
Deep connections and socially conscious
WP Engine’s Dugan agreed Gen Z’s technology knowledge paves the way for brands to develop deeper connections with them. Additionally, Gen Z is 25 per cent more likely than other generations to provide personal information to gain a more predictive, personalised digital experience.
Notably, within five years, 65 per cent of Gen Z believe websites will know what they are looking for before they state intent. Almost half of Gen Z (46 per cent) would also stop visiting a website if it didn’t anticipate what they needed, liked or wanted.
“In addition, 49 per cent of Gen Z believes websites will become more human in experience by exhibiting personalised emotions when you visit and interact with them,” Dugan said. “If marketers can understand and accept this new paradigm, they will be ahead in terms of being able to meet expectations.”
To reach Gen Z, Dugan said brands must entertain first to gain access. They must also be authentic to gain trust.
“Authenticity has been the cry of every generation in some form or fashion. The difference with Gen Z is that they demand authenticity in a new frontier - the Internet,” Dugan explained. “They want guaranteed authentication for every person or brand they interact with online so they can trust a person is truly who he or she says; for social and dating Web sites, and from retailers as well.
“They also expect predictive personalisation. In other words, they expect the Web will know what they want before they ask for it, based on their past shopping and social behaviour. They don’t mind trading their privacy as they long as they can receive this type of customised experience.”
Group director of Locate by oOh!, Adam Cadwallader, urged marketers to focus on fostering deeper connections with Gen Z and also said brands need to be cognisant of the generation’s desire to be socially conscious.
“Many brands make the mistake of half-heartedly trying to appeal to Gen Z through little or poor research, the best examples being memes on social,” he said. “In the best case, the result is a very transparent attempt of a corporate body trying to ‘relate to the kids’. In the worst case, the brand becomes one any young person would be embarrassed to be associated with.
“No young person wants to be underestimated, and your transparent attempt to relate to them will turn them off. In fact, brands fall into this trap so often there are multiple listicles dedicated to lampooning them. When this happens, you don’t stand out to Gen Z positively. Instead, you reinforce your brand as being out of touch.”
For Cadwallader, Gen Z consumers will go towards brands with real purpose and that care for the future. “Common sense would say brands that make things easy will win over any consumer, and of course that’s the case with Gen Z. But this generation also want brands they associate with to have a true social conscious and be visibly and actively committed to causes,” he said.
“While there were some challenges around it, Airbnb was lauded this year for its stance on marriage equality, as was Stella Artois for its efforts to drive awareness of the global water crisis.
“Gen Z knows which brands are genuinely committed to causes they care about, and which brands have jumped on a cultural bandwagon to try and improve their image. Activism will be applauded, but only when done genuinely and authentically.”
But while it’s clear Gen Z requires a fresh approach, O’Connell urged marketers not to get too side-tracked looking for the differences in generations. “Sure, you want your brand/product/message to be as relevant as possible to your audience, and that often means excluding some demographics and/or generations. However, finding the commonalities in generations, and having an offer that appeals to as many people as possible, is the best way to grow your business,” he concluded.
“Having more people buy your products more often is the optimal business position. So looking for the components that unite audiences is more favourable than looking for components that divide them. There are plenty of qualities Gen Z share with other generations. If feasible with your brand/product – and I fully acknowledge it isn’t always possible - I’d actually start there.”
Up next: Your final checklist to Gen Z marketing
Steps to success
Kantar’s O’Neill offers his key pointers to winning over Gen Z:
Be Responsible: In a world not meeting their ideals, Gen Z respect brands that take a stance on the issues that are important to them. Integrity, honesty and action, especially around issues of equality and diversity, are increasingly seen as hygiene factors and ‘purpose’ can be a valuable differentiator.
Be Authentic: Reflect reality – don’t be untouchable, perfect or sugar coat reality. Sure, be aspirational, but be supportive and sprinkle with real life, real people, no filter.
Be There: There’s a huge opportunity for many brands in the heavily socially influenced consumer decision journey. Know the needs and touchpoints important to Gen Z for your category and brand and gain a relevant presence.
Be Relevant: Time is not a gift Gen Z will donate to you, you need to earn it. Sharpen your communications to make your proposition relevant across platforms and formats; elevator pitches are now 10 seconds if you’re lucky.