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 / Spring 2007 / Issue 46(originally published by Booz & Company)


Marketers, Meet the Millennial Generation

A radically new marketing approach is required to reach Generation Y.

Even with decades of practice communicating with young consumers, marketers may not know what they are in for with Generation Y. Most companies have had little exposure to this cohort. In the U.S., more than 60 million consumers were born between the launch of MTV in 1981 and the commercialization of the Internet in 1996; they have about 140 million counterparts in Europe and almost 20 million in Japan. The older members of the group are only now moving into the mainstream adult arena of reliable cars and mortgages.

Complicating matters is the very nature of Gen Y. Gen Ys, also known as millennials or echo boomers, are the first consumers to be shaped by interactive media. They’re plugged in constantly, and the companies that have targeted this young cohort have bombarded them with come-ons in every conceivable medium for products that seem to change as quickly as new technologies emerge. Consequently, Gen Ys are adept at screening out most traditional marketing.

“Gen Y cannot be marketed to,” says Peter Kang, creative director of interactive and emerging technology at Saatchi & Saatchi LA. “They’re just too astute in the ways of advertising.”

Perhaps. But maybe something else is revealed by how hard it is to attract Gen Ys: Namely, marketers cannot merely tweak traditional techniques, as they have in the past, to reach this group. Instead, a radically new approach is needed, one that takes advantage of updated tools and updated thinking. For starters, take these three steps:

1. Learn the ways of the Millennial Generation. Coming of age in the most brand-crazy period in history, Gen Ys expect a constant rush of new brands and new iterations of their favorite products; their tastes don’t stay still very long. “By the time we recognize the wave, it’s already crashing,” says Venkatesh Kini, former chief of Coca-Cola’s Sprite and flavors brand business unit and now Coke India’s vice president of marketing.

To forecast what Gen Ys want, leading youth marketers increasingly either push the existing boundaries of consumer research or abandon traditional approaches altogether. “We don’t do [conventional] market research. We spend time with people,” says Jean-Pierre Petit, who heads Nike’s soccer business in Europe. “Our designers and product people go to soccer games, or to the in-line skaters at Trocadero, to connect with the kids. You can learn a lot from just watching and talking to them.” In other words, smart Gen Y–leaning companies are focusing their information gathering efforts on direct insights into youth “tribal” behavior and attitudes, as opposed to the more superficial insights that emerge from typical customer surveys.

Out of this type of research, for example, Volkswagen produced its extremely creative, against-the-grain ad campaigns for the Jetta, which graphically touted the automobile’s safety features — and hit an elusive sweet spot among Gen Ys. After a similar type of exploration, Sprite was able to play to Gen Y’s cynicism and sense of irony by running ads mocking the pretentiousness of celebrity endorsement with the tag “Image is nothing. Obey your thirst.”

Using “ethnographic” studies, similar to those pioneered by VW, Motorola discovered that although cell phone makers had been stressing new technology as the key differentiator, Gen Ys cared more about style and personalization. The fabulously successful RAZR phone, whose cutting-edge design comes in a variety of colors, grew out of this finding. Because of Motorola’s technology focus, the company could create the RAZR only by detouring around its traditional innovation process and setting up a separate project team that was focused on Gen Y behavior.

2. Integrate all your communications. Whereas Gen X spent a lot of time in front of the TV, Gen Y is always “on.” They’re consumers of every imaginable means of communication: TV, radio, cell phone, Internet, video games — often simultaneously. But they pay attention selectively. Marketers traditionally divide their resources between “above-the-line” mass media campaigns and “below-the-line” direct marketing efforts, often conducted in isolation from each other. But because Gen Ys move rapidly among media, product marketing targeted at them should be interwoven so that an ad in one venue feeds off a different form of advertising in another. For example, moviemakers seeking Gen Y audiences have promoted their films with text messages containing trivia questions sent to cell phones; trailers, actor interviews, lost scenes, and other video goodies on the Web; and longer, costlier advertising on television. “Above-the-line/below-the-line — that’s a 20th-century distinction that no longer makes sense,” says Murat Yalman, executive director of marketing services at Ford Motor Company.

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