Marketing to millennials research paper
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Marketing to millennials research paper
- 2. 2 Executive Summary Millennials are the most diverse and influential generations in history. They are the most educated, most socially responsible and most financially in trouble over all other generations. But despite this, they have tremendous buying power and influence over other consumers so businesses and marketers must pay attention to them. The problem is for marketers is that they are very different than the generations they have marketed to in the past. Millennials are extremely tech savvy and have delayed adulthoods which make traditional marketing tactics almost ineffective to them. What does work for them, and as this paper will show, is that marketing your business's social and environmental responsibility is a great way for millennials to like and respect your business. Also because of the sharing economy, business must promote the sharing of their products amongst millennials in order to reach new consumers. Because of the participation economy, business must send the message that millennials opinions are important and will be listen to. Finally through the experience economy, business must market an experience and not the product. How to market these messages has also changes. Business must back away from traditional media and towards an online presence through social media, product placement and event sponsorship at the same time remembering how important “word of mouth” advertising is to millennials. When combining these messages with how to market to millennials, business will have a better chance of reaching out and forming a relationship with one of the most influential generations of all time.
- 3. 3 Introduction The appellation “millennial” is widely credited to authors William Strauss and Neil Howe. It first appeared in their book Generations: The History of America's Future 1584 to 2069 in 1992, as the very first millennials were about to enter preschool. The millennials, also known as Generation Y, describes the demographic cohort following generation X. Millennials have generated a significant amount of discussion all across academia since they were first discussed in the early 1990’s. One of the main reason millennials generate such interest within the scientific community is that they are the very first generation to encounter and master modern technology at a very young age. This led to them growing up in a significantly different context compared to preceding generations. Many things have changed since generation X left school benches. The way we communicate, we learn, retrieve information, and spend our leisure time have very little in common with how it used to be 25 years ago. How do all these contextual changes affected millennials in the way they perceive life, their values, interests, the way they consume and react to marketing? Who are the Millennials? There is much debate when it comes to defining who the millennials are amongst the academics who study generations. Some academics say millennials were born between 1980 and 1995, some say 19851999 while others say its between 1990 and 2002. But it is agreed upon that millennials are the first generation after generation X. For the purpose of this paper, millennials were born between the years 1980 to 1997, a somewhat average amongst the academics. That would put our millennials between the ages of 1835 years old. There is also some confusion when it comes to the naming of millennials as there are numerous names out
- 4. 4 there that define the same generation. The most common names are generation Y, since they come after the X generation, EchoBoomers, since they resemble the Boomer Generation in terms of size, Net Generation and Digital Natives, since they have been brought up on technology and finally generation screwed, since there is hard economic times ahead for this generation. But for the purpose of this paper, we will continuously call them the millennial generation. Canadian Millennials According to Statistics Canada, there are approximately eight to nine million millennials living in Canada, which is around 24 27% of the total population . This is approximately the 1 same percentage of the population that baby boomers have. They are the most educated generation in Canadian history, as according to a study done by Princeton Educational Training service, 56.5% of millennials over the age of 24 have some sort of education past high school . 2 Only Japan and South Korea had higher results than Canada. But, according to the study, even though this generation is very educated they are also very unskilled. Out of 22 countries studied, Canadian Millennials ranked 11th in literacy, 14 in numeracy and 12 in tech problem solving. 3 So because of this, 33% of the millennials who have a university degree are actually working in low skilled jobs. To make matters worse, the unemployment rate for this generation is at 15%, 4 which is double the general population . To add to the fire, because of rising tuition costs, 60% 5 of millennials who graduate University have an average debt of $27,000 according to one BMO 1 Statistics Canada. Census in Brief: Generations in Canada.(2011). Retrieved from http://www12.statcan.gc.ca/censusrecensement/2011/assa/98311x/98311x2011003_2eng.pdf 2 Educational Testing Service. Overall Results: Millennials. March 3, 2015. Retrieved from http://www.ets.org/s/research/30079/millennials.html 3 Educational Testing Service. Overall Results: Millennials. March 3, 2015 4 CBC Doc Zone. Generation Jobless. April, 2015. Retrieved from http://www.cbc.ca/doczone/episodes/generationjobless 5 CBC Doc Zone. Generation Jobless. April, 2015.
- 5. 5 study. So with a combination of high debt, low income jobs, or not even having one, a perfect 6 storm has been created for this generation, which is why it is also called generation screwed. The average income for millennials is $34,000, which is very skewed as a majority of these earners are older millennials who have been in the workforce for a while. But the most impressive and important aspect for business and marketers the the amount of buying power that these millennials have. According to some studies, canadian millennials have $70 billion in buying power , $50 billion indirectly and $20 billion they spend directly. 7 These numbers are based off of the 10% rule of the United States, as we only have 10% of their population. So even though they having hard financial times, they are still a large player in the economy and therefore very important to businesses and should be part of marketing strategies if the business wants to succeed. Millennials V. Other Generations Our research has shown that a problem that business have when it comes to marketing to millennials is that they do not understand the difference this generation has to past ones, and therefore market the same message the same way. There are two major differences that we have found when comparing the millennials to previous generations. The first is how dependent this generation is on technology and the internet. The second is that for the first time, this generation is having to, or deciding to, delay adulthood. 6 BMO Financial Group. 2013 BMO Student Survey: Canadian Students Relying Less on Family to Finance Higher Education. August 3, 2013. Retrieved from http://newsroom.bmo.com/pressreleases/2013bmostudentsurveycanadianstudentsrelyingtsxbmo201 308130891837001 7 The Case Foundation. 2014 Millennial Impact Report. 2014.Pg. 3 Retrieved from http://cdn.trustedpartner.com/docs/library/AchieveMCON2013/MIR_2014.pdf
- 6. 6 The millennial generation is the first generation in history to grow up with the vast technology, such as the phone, internet and computers, that we have today and it is replacing traditional media. Numerous millennials were using computers before the age of 5 (20%) and 8 virtually all were using computers and technology to learn in the classroom in school. If you compare to older generations, the youngest of the generations may have used a computer in university and college. According to the Journal of Strategic Marketing, 97% of millennials in the US own a computer and 94% own a cell phone. This has caused this generation to be very 9 comfortable on technology and using it has become part of everyday life. Because of this, when social media was created, it was the millennials who bring it into the mainstream and part of the culture. For example, Facebook, created by millennial Mark Zuckerberg, has been hugely popular with millennials. According to Data Abacus surveys of Canadian millennials, 90.8% of 1829 year olds have a facebook account, with 42% checking it multiple times a day and another 40% checking it at least once per day . Older generations are not on Facebook at the same 10 percentage as millennials and therefore it is not fully understood by all marketers. Millennials also differ from previous generations in the sense that millennials are not entering adulthood as the same rate as previous generations. According to past generations, adulthood meant 4 steps: getting a stable, well paying job, getting married, buying a house and having kids. Past generations usually used their early twenties to achieve all of this, but millennials are going against the norm and not doing this. As previously mentioned, the 8 Coletta, David. Morrison, Jamie. R U Ready 4 Us. An introduction to Canadian Millennials. Pg.6. Abacus Data. January 22, 2012. Retrieved from http://canadianmillennials.ca/wpcontent/uploads/2012/01/RUReadyforUsAnIntroductiontoCanadianM illennials.pdf 9 Smith, KT. Digital Marketing Strategies that millennials find appealing, motivating or just plain annoying.Pg. 490. Journal of Strategic Marketing. Vol 19, NO 6. Oct, 2011. 10 Coletta, David. Morrison, Jamie. R U Ready 4 Us. An introduction to Canadian Millennials.
- 7. 7 unemployment rate for younger millennials is double the national average, and the jobs they usually get are usually low skilled and low paying despite a university degree that carries a lot of debt. So this means that they are not getting the stable job they need to move onto the next step of adulthood. When it comes to marriage a similar trend is emerging as millennials are not getting married at the same rate as past generations. According to Pew Research, the marriage rate for millennials is 26%. This is a much lower number compared to past generations, as when they were the millennials age, 48% of baby boomers and 36% of generation xs, just a generation before, were married . Also according to their research, 25% of millennials say they will never 11 marry which is an all time high. The number one reason why millennials are not getting married is because they do not have a stable job yet so they can't pay debts so they want to wait. The same thing is happening when it comes to purchasing a house. According to one survey done, 60% of millennials would rather rent a house than buy one. Alot of this has to do with the debt 12 they have, American student debt is over $1 trillion, so they are unable, or unwilling, to get a mortgage from the bank. It also has to do with what they witnessed during the 2008 financial crisis, which will be discussed more on later in this paper. Finally in the final step to adulthood, millennials are not having kids like past generations. According to the same survey, 71% of generations Xs planned on having kids at the ages of today's millennials. Only 42% of those 13 millennials say they will have kids. So why is knowing how millennials are different from past generations important for marketers? Because marketers have to understand that millennials are living life much more 11 Pew Research Center. Millennials in Adulthood. March 2014. Retrieved from http://www.pewsocialtrends.org/2014/03/07/millennialsinadulthood/ 12 Drake, Bruce. 6 new findings about millennials. March 2014. Pew Research Center. Retrieved from http://www.pewresearch.org/facttank/2014/03/07/6newfindingsaboutmillennials/ 13 Drake, Bruce. 6 new findings about millennials. March 2014.
- 8. 8 different than the past generations and old marketing strategies must change to adapt to the shift. Millennials are not reading the ads in a paper or watch on a tv, they see ads on their computers and smartphones that they grew up with. Millennials are not reacting to marketers ads about traditional adulthood that may have worked on older generations, they are redefining adulthood and marketers must be aware of that. Groups of Millennials 14 Scholars have segmented millennials in different ways but the most common regroupements show six different segments. To know these segments characteristics can give useful insights when determining the optimal marketing campaign to reach a specific target market. HipEnnial They are cautious consumers, information hungry which makes them very well informed on various subjects. They are the greatest users of social media, but do not tend to generate nor push content. They are the largest segment accounting for 29% of millennials. Composed of a majority of women and generally with postsecondary education. Millennial Parents This is the second largest segment, making up 22% of millennials. It is mostly composed of older millennials that are at a more advance stage of their lives. They have kids, higher income and are extremely digital savvy and great producers of social media content. They connect with others and seek information online as they spend a lot of time isolated at home. 14 Garton, Christie. Fromm, Jeff. Marketing to Millennials. 2013. Barkley Inc. New York : AMACOM, American Management Association.
- 9. 9 AntiMillennial The antimillennial is 16% of all millennials, their values and characteristics go against most of their peers. They are local minded, show little interest in ecofriendly products and are not very techsavvy. The seek comfort and familiarity over change and excitement. Gadget Guru Makes up 13% of millennials, they are mostly single males with higher income and extremely knowledgeable in technology. They are great content consumers and generators on social media and online. Their main interests are technology and science. Clean and Green Millennial This group is the most causedriven. Environmental and societal values are extremely important to them. They are very healthconscious and are the greatest content generators mostly related to causes they promote. Clean and Green Millennials are mostly students, generally males and account for 10% of all millennials. Old School Millennials This segment also accounts for 10% of the millennials. Old School Millennials are averse to technology in general. They spend very little time online and get information from printed media instead. They are generally very charitable, independent, selfdirected and generally on the older end of the millennial spectrum. Knowing the different millennial groups can really help marketers and business target a specific millennial group in a way they would most likely respond to the best.
- 10. 10 Corporate Social Responsibility A new trend that has emerged with the millennial generation is the importance of a corporation's impact on the community and the environment. More and more millennials are viewing a corporation’s impact as of the most important factors when choosing a product, at a higher rate than previous generations. 95% of millennials say that a company's ethics towards the environment and society is most important to them when deciding if they will do business with them . In Canada, millennials are the most likely generation to spend more on an ethically 15 made product than any other. According to a survey conduct by Abacus Data, they are willing to spend 16% more for a product if it was ethically made, or $15.90 more on a $100 item . This 16 was more than $2 more than the next closest generation, the baby boomers. The Intelligence Group also reports that 64% of millennials say its a priority of theirs to make the world a better place . 17 So clearly, millennials are looking towards companies and marketing strategies that would reciprocate the same feelings they have towards society and the environment. Companies can take advantage of this, while improving the world, by marketing their fight against climate change or social issues like homelessness. Numerous companies have done so to great success, such as TOMS shoes, who donates a pair of shoes to an impoverished child, every time they sell a pair of shoes. This company is very popular with millennials as they show they have great company ethics and commitment towards the world. A company who really shows that they 15 Bentley University. The millennial mind goes to work. October 2014. Retrieved from http://www.slideshare.net/BentleyU/prepareduthemillennialmindgoestowork41415813 16 Coletta, David. Morrison, Jamie. R U Ready 4 Us. An introduction to Canadian Millennials. 17 Asghar, Rob. What Millennials want in the workplace. Forbes. January 13,2014. Retrieved from http://www.forbes.com/sites/robasghar/2014/01/13/whatmillennialswantintheworkplaceandwhyyousho uldstartgivingittothem/
- 11. 11 care, can make lasting impact on millennial consumers and therefore CSR should be part of a company's marketing strategy in some way. Millennial Grown Economies Over the last decade, millennials have grown three economies that cater to their needs, but confuse and upset businesses and marketers alike. The economies have shifted away from business being at the top of a centralized, traditional B2C market, to a more decentralized one. The sharing economy, the participation economy and the experience economy, that when understood, create a great opportunity for businesses to market to millennials in a very successful way. From these economies, new marketing strategies are being created that will effectively market to millennials for decades to come. The Sharing Economy The first economy grown by these millennials is called the sharing economy. The sharing economy can be defined as decentralized peer to peer markets where goods and services are traded. The goods or services can be bartered for other goods and service or can be exchanged 18 for money. How it differs from the regular economy, is that the ownership of the goods never changes from the original owner and this is what is driving business and marketers mad, as millennials are not buying goods any more, just borrowing. Most of the goods that are being traded are goods that have a high idle rate, as in they sit around for a long time in between uses. For example, cars are a large trading good in the sharing economy as, according to Forbes 18 Zervas, Georgios and Proserpio, Davide and Byers, John, The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry (February 11, 2015). Boston U. School of Management Research Paper No. 201316. Available at SSRN: http://ssrn.com/abstract=2366898
- 12. 12 research, sits in neutral for 2023 hours a day on average . This is why companies such as Uber 19 and Zipcar are doing so well. Other commonly shared items are tools, rooms/beds in participant's residences and bikes. People may wonder why this is so much different than what past generations have done. Everybody has allowed their friends to borrow their car or a neighbor borrow their tools. But millennials have taken in to a whole new level thanks to technology and the internet. As CBC’s “Under the Influence” has pointed out, older generations have had a problem sharing their goods and instead have gone out and bought the item instead of asking. According to their research, Canada has one of the largest storage facility demands in the world, second only to that of the US. In the US, 10% of all households rents a storage unit even though 47% have an attic, 60% have a garage and 33% have a basement . Last year North Americans spent $20 billion on 20 storage facilities, which would explain why the self storage industry has been one of the fastest growing sector of real estate in the last 30 years . Millennials are shifting away from this over 21 the top consumerism to the a sharing economy. The sharing economy exploded after the 2008 financial crisis. Many millennials were directly or indirectly affected by the crisis, which has caused this shift to sharing. One in four millennials watched as someone they loved, such as their parents, have their house foreclosed on or car taken away . Other millennials lost their jobs, as previously mentioned as they likely had 22 low skilled jobs so were expendable. Millennials are hesitant with big purchases such as houses 19 O'Reilly, Terry. The Sharing Economy. CBC Radio Under the Influence. March 7, 2015. Retrieved from http://www.cbc.ca/radio/undertheinfluence/thesharingeconomy1.2983680 20 O'Reilly, Terry. The Sharing Economy. 21 O'Reilly, Terry. The Sharing Economy. 22 Geron, Tomio. AirBnB and the Unstoppable rise of the sharing economy. January 23, 2013. Forbes. Retrieved from http://www.forbes.com/sites/tomiogeron/2013/01/23/airbnbandtheunstoppableriseoftheshareeconomy/
- 13. 13 or cars, as they still feel they do not have job security or don't want to go through what their loved ones did. This has caused millennials to see ownership and purchases as burdens, not empowerment. What has also helped the sharing economy expand is the use of social media and the internet. Now millennials are able to find the goods or services they are looking for virtually anywhere and are not limited to the neighborhood like past generations. All the major sharing economy business are done mostly through apps or websites, which explains why millennials have picked up on it so fast. Some industries are not very pleased with the fact that their products are being shared and not bought as this disrupting the industry. For example, because of AirBnB, the hotel/motel industry is having its market share chipped away. AirBnB allows customers to rent out their own personal rooms at their place of residence and charge at a much cheaper price than hotels. Its been so successful in fact, that AirBnB is worth over $10 billion and only the Hilton, Starwood and Marriott have a higher valuation within the industry . So numerous lobby groups are 23 lobbying politicians as AirBnB do not pay hotel taxes. Taking legal action is one way to deal with the sharing economy, but will be the least effective way as the sharing economy is only going to grow. In 2014, the sharing economy was worth $3.5 billion and is expected to be worth $100 billion in the next few years . Therefore business must embrace it and not fight it. 24 If we look at the case of the sharing economy within the car industry, there are a few marketing strategies that business can use to their advantage. The biggest problem that the car industry is having is that millennials are not driving at the same rate as past generations. According to Maclean's Magazine, there are numerous reasons why they are not driving. One is 23 O'Reilly, Terry. The Sharing Economy. 24 Geron, Tomio. AirBnB and the Unstoppable rise of the sharing economy. January 23, 2013. Forbes.
- 14. 14 the initial purchase of a car . As previously mentioned, millennials have a lot of debt and no job 25 security so big purchases are not likely. Another is the ever increasing cost of driving, as gas prices are above $1/litre and insurance for younger drivers are much higher than before. Finally, it is very complex to get a drivers license today than ever before. In Ontario for example, it takes at least 2.5 years to get a full drivers license. Past generations usually did one test to get theirs. So because of this and many more reasons, millennials are not driving at the same rate as past generations.So companies like Uber and Zipcar have popped up to drive millennials around. Uber is now worth $40 billion, having 1 million rides/ day in 250 cities in 53 countries . As a 26 matter of fact, when two of the big three car companies in America was being bailed out, car sharing grew by 51% . So as car ownership is dropping and car sharing is increasing, some 27 companies are taking the legal route. Some taxi companies and car manufactures are lobbying governments to make these programs illegal. But more intelligently, others see it as a marketing opportunity. According to “Under the Influence”, General Motors has accepted that the sharing economy is here to stay and is using it to their advantage, and recently invested $3 million into relayrides.com . Their reasoning is that they now get to market an extra perk of being a GM 28 owner. Besides getting to ride in an excellent car, a GM owner also gets to make money while driving it. This money can be used to help pay for the cost of driving, or pay back any debt the millennial may own.They are also actively promoting the fact that millennials will use their cars to sell rides which is what they want as GM will be able to market to unsuspecting potential buyers of a GM through the program. They want the owner of the vehicle to use it in the 25 Sorensen, Chris. (January 17, 2015). Young and Careless. Macleans Magazine. Retrieved from http://www.macleans.ca/economy/business/youngandcarless/ 26 O'Reilly, Terry. The Sharing Economy. 27 O'Reilly, Terry. The Sharing Economy. 28 O'Reilly, Terry. The Sharing Economy.
- 15. 15 ridesharing program and talk and show how great a GM is to their passenger. They know that the user of the ridesharing program will either never buy a car in their lifetime, which GM doesn't care about, or is waiting to buy a car when they have enough money or a more stable job. In that case when trying to decide what car to buy in the future, they would have ridden in a GM and got to talk to the proud owner of it, and as we will discuss, this user generated content is most important to millennials. Another company who is embracing the rent, not buy share economy is Mercedez Benz. They allow customers to rent their smart cars for 0.38$ per minute in hopes that young people will rent them, love them and then buy them when they make the decision to buy a car . 29 So using the sharing economy should be part of a business marketing strategy as it is here to stay and therefore must be embraced. The key marketing strategy here is to let it be know that your product can be shared, which in turn creates a ownership perk while being used by potential new customers who otherwise wouldn't use it. Companies can market the fact that their newly purchased item is an extra revenue stream to a generation who is having it tough in the job market. But most importantly, using the share economy is a great way to subtly market to new, potential customers who otherwise wouldn't ever use your product. By promoting sharing your product, you will be able to market to a generation who has $70 billion in purchasing power that will only grow in the future. The Participation Economy The next economy to flourish under millennials, and marketers must be aware of, is the participation economy. There is no universal definition of the participation economy, but the key 29 O'Reilly, Terry. The Sharing Economy.
- 16. 16 element of the participation economy is that it is no longer a B2C business world, it is a B and C world. Millennials are taking it upon themselves to be part of a business and not just sit on the sidelines and have business market to them. Millennials want to be active participants in seeing a company grow and not just be passive consumers . They do this by retweeting a company’s 30 tweet, liking the company’s facebook page, by writing a review on a website or blog promoting a product or by providing a company with an opinion on what to sell next. By doing this, millennials are helping the company succeed. Past generations were not able to part of the participation economy as the only means of getting an opinion heard was by writing to the company through the mail or being selected to be in a focus group. But because of the internet and social media, millennials are getting their opinions heard by companies and other millennials. This is a very key point, as millennials are more likely to listen to strangers on the internet, than their own friends and family when it comes to recommendations about products . 31 Also, 84% of millennials trust user generated content (UGC), such as a blog post, over all other types of reporting such as a company website or a news report. For example, before purchasing 32 an electronic device, 44% of millennials will consult UGC before they purchase a certain brand/type. So what does this mean for business and marketers? Allow millennials to do the 33 advertising for you and allow them to participate as other millennials will listen to them over you! If they like your product/service they will want others to like it also and will tell them about it. Allowing millennials to steer the advertising and participate in company business decisions is a very direct way to reach new customers. 30 Garton, Christie. Fromm, Jeff. Marketing to Millennials.pg. 100. 31 Dorsey, Jason. Talking to strangers:Millennials trust people over brands.2012. Bazaarvoice. Retrieved from http://issuu.com/bazaarvoice/docs/millennials.webinar.presentation.2.1.2012 32 Dorsey, Jason. Talking to strangers:Millennials trust people over brands.2012. 33 Dorsey, Jason. Talking to strangers:Millennials trust people over brands.2012.
- 17. 17 If we look at the case of Lays chips, we can see how a company can effectively reach millennials through the participation economy. Lays chips had a problem where they had a 12.4% decrease in six years in household penetration and younger generations were not eating 34 Lays chips like their parents. So Lays had to come up with a marketing strategy to get millennials involved and start eating their chips again.They decided to allow their consumers to participate in choosing the next flavour of chips to be sold by submitting and voting on different ideas. The winning submitter would get $1 million and royalties from the flavored chips. With the help of celebrity endorsements, they began their “Do us a Flavor” campaign. They allowed people to submit and vote on ideas by downloading their free app or by doing it on the ‘Do us a Flavor” facebook page. Their goal was to boost sales by 5% and have at least 1.2 million flavour submissions and 1 million votes . The consumers loved the idea and the campaign exploded as 35 they had 3.8 million flavour submissions and 1.4 million votes . Most importantly, millennials 36 actively participated in the contest. 2.7 million people downloaded the app, where 57% of which were millennials and 2.2 million more people like Lay’s facebook page, 950k of which were millennials . In all, sales increased by 8% and had a viral reach of 9.75 MM during the 12 week 37 campaign period. This is a very important case for business and marketers to understand that a key marketing strategy is to allow a two way conversation with your consumer and value/respect their opinions and their ability to market on your behalf. When business allow for millennials to actively participate by choosing a product and allowing them to “like” and share amongst their 34 Lay's "Do Us A Flavor" (n.d.). Retrieved March 8, 2015, from http://www.baalink.org/reggiecasestudy/laysdousflavor 35 Lay's "Do Us A Flavor" (n.d.). 36 Lay's "Do Us A Flavor" (n.d.). 37 Lay's "Do Us A Flavor" (n.d.).
- 18. 18 friends, great things will happen. A business must be willing to give up some control over their own business's marketing and/or product selection if they want millennials to pay attention to them. By allowing consumers to write reviews of their products on their website or facebook page, or by having a share button at the bottom of company news allows consumers to advertise the product. It also makes your consumers feel valued and respected and thus more likely to support you. Also by allowing millennials to help select a new product, like in the case of Lays Chips, it creates an emotional bond between the company and participant since they feel responsible for the choice. It also doesn't hurt that by allowing them to pick a new product, you know you will sell a product that is wanted by your consumers. In all, opening up your company to consumers opinions is a great way to market to millennials. The Experience Economy The final new economy that has grown under millennials is the experience economy. The experience economy theory states that a company must create memorable events for their clients, and the experience becomes the product . This has really grown because, as mentioned before, 38 millennials are hesitant to buy items because of the 2008 financial crisis and high student debt. So millennials are opting to purchase experiences over tangible goods. According to a survey done by Eventbrite, 78% of millennials would choose to spend their money on an experience or event, than buy something tangible they desire. They (82%) are also more likely to attend a live event/experience than older generations (70%) . Millennials are attending these events to feel 39 more connected as 79% say they attend these events to bond with the person they are going with 38 Gilmore, James. Pine, Joseph. (July 1998). Welcome to the Experience Economy. Harvard Business Review. Retrieved from https://hbr.org/1998/07/welcometotheexperienceeconomy/ 39 Harris Poll on behalf of Eventbrite. Millennials: Fuelling the Experience Economy. 2014. Retrieved from http://eventbrites3.s3.amazonaws.com/marketing/Millennials_Research/Gen_PR_Final.pdf
- 19. 19 and 69% say attending events/experiences is key to making them more involved in the community and the world. Because of this economy, a new fear has been created called “Fear 40 Of Missing Out” (FOMO) as, when surveyed, 70% of millennials said they experienced FOMO. FOMO occurs when someone looks/reads/watches their friends on social media, or other portals, have fun at one of these experiences. Whether its a group shot of friends at a concert or a video of the Red Bull Crashed Ice skaters, people who didn't go feel left out. Marketers/business must take advantage of this economy as 72% of millennials say they want to increase their spending on events rather than on tangible assets. Marketers must market to millennials by creating 41 events and experiences around their product the consumers will want and remember. A great way for business to create this experience is through event sponsorships, which will be discussed later, or by doing something fun and out of the ordinary. For example, Bud Light has an ad campaign called “#upforwhatever” where millennials are given beer if they partake in a crazy event, such as real life pacman game. Lots of people are watching from the sidelines having a 42 great time and taking pictures. By creating the experience, millennials are more likely to take pictures/ videos of the event and thus advertising to people who will than experience FOMO and likely to attend the next experience/event. Also by creating an experience, millennials will more likely remember the company name who organized it over who created a certain product as 40 Harris Poll on behalf of Eventbrite. Millennials: Fuelling the Experience Economy. 41 Taylor, Kate.(September 17, 2014). The 'FOMO Epidemic' and Why It Matters to MillennialHungry Businesses. Entrepreneur. Retrieved from http://www.entrepreneur.com/article/237566 42 Bud Light. (2015). Bud Light Super Bowl 2015 Commercial – Real Life PacMan #UpForWhatever. Retrieved from https://www.youtube.com/watch?v=g9A1NowrnGI.
- 20. 20 a lasting memory was created. So the key marketing strategy here is to market an experience and not the product so millennials feel they are buying more than a tangible item/service. To sum up, from the three economies that have flourished under the millennials a few new key marketing strategies have developed. A marketing strategy where you emphasize to millennials that sharing your product amongst others allows for more perks for the owner (ie. financial) and allows for your product to be used by potential new consumers ( ie. a rider in Uber). A marketing strategy where you allow millennials to participate in company decisions shows that you value their opinion and allows you to create what consumers actually want. And finally, a marketing strategy where you create an experience around your product allows for your product/company to be remembered. How to market to them Millennials are a very distinct group of the population. In order to get maximum results from a marketing campaign it is extremely important to choose the right type of promotion and the right channel. Millennials are incredibly avid consumers of media, especially the digital form of. A 2014 survey showed that millennials average 18 hours of media consumption a day (not mutually exclusive). As you can see in the graphic on the next page, web and social media browsing themselves account for over six hours a day.
- 21. 21 It is easy to see why these channels are so central when trying to reach millennials. Web advertising on websites that show high daily traffic are very effective to get visibility. In order to reach a more specific target market it is suggested that advertisers display the ads on websites that are related to the product or service offered. For example an ad for hockey equipment would be more effective on the National Hockey League website rather than on a general news site like CNN.com. Social media, the second highest consulted media by millennials is also has great potential for advertising. Advertising on Youtube, Facebook, Twitter and Instagram has been around for quite some time now. The first Facebook ad came in 2005, while the first Youtube mandatory prevideo ad came a year later and most other social media websites started 43 displaying ads since their earliest days. It is now accepted by users of these free services that they will encounter ads while browsing. A big advantage of social media marketing is that it 43 KARR, D. Brief History of Social Media Advertising. 2014
- 22. 22 allows users to direct their advertisement to a very specific segment of users determined by various characteristics that they choose to include or exclude from your target. Age, gender, scholarity level, interests and geographic area are some of the many characteristics you are able to set in order to effectively reach your target market. A very unique characteristic that most millennials share is a higher level of trust for “real people” versus corporations and governments. Since millennials are more likely to trust and listen to fellow social media users, public personalities, internet celebrities and athletes than a firm, the way to market to them needs to be different. Word of mouth is a very effective way to generate interest and awareness for a product. If influent people talk about a product of service in a positive way, it is likely that people will already have a positive impression about the product before trying it and eventually share their positive experience as well once they have tried it. With the rise of social media, word of mouth has never been this powerful, it can grow exponentially within a very short range of time. Messages can spread so quickly and reach millions of people within weeks. A downside of word of mouth is that not all users are promoters of a product, some are neutral and some are detractors. If a word of mouth campaign generates a significant number of promoters with little detractors along the way the outcome could be very positive for brand image and boost a firm’s sales considerably. Event sponsorship is an effective way to promote a brand a reach a huge audience. Huge sporting events like the Super Bowl or World Cup provide great exposure that reach virtually every segment of the population. But the costs to associate with these events is unaffordable for a medium or small business. Although, there are many other events that are more reasonably
- 23. 23 priced to advertise at and allow you to target more specific group, for example: millennials. The number one event destination for millennials is music festivals. Attendance at music festivals can go up to millions of people that is composed practically solely of millennials . Associating 44 with music festivals seems really effective way to promote a brand to millennials; according to Music 360 report, 76 percent of festivalgoers say they feel more favorable toward brands that sponsor a tour or concert, and 51 percent of all consumers feel this way. This statistic is hard to ignore, especially since the majority of festival attendees fall within the millennial generation. Other type of events may be a good solution for a more specific target market but music festivals provide the most reach and effectiveness within that segment. They are also a great way to build that experience that millennials crave in the experience economy. Another good way to promote products and associate positive feelings with a brand is through product placement. The rise of internet and social media brought many new ways to introduce product placement in our everyday media consumption. Youtube, the largest video hosting website his full of examples of it. Product placement is now introduced in music videos from independent artist that generate substantial number of views and provide interesting exposure for a product. Professional bloggers and youtubers are making a living by promoting and reviewing products to their large follower base. Nowadays product placement is not only in movies or television but also in user generated content. This new channel for product placement made it much more affordable and enables firms with much smaller marketing budgets to make their product visible for huge amounts of users. 44 Claes,A. The 10 biggest music festival in the world. 2014
- 24. 24 Conclusion In conclusion, millennials must be treated differently than past generations. They will respond to your marketing strategies positively if you show you are socially/environmentally responsible, show that your product/ service can actually provide new perks under the sharing economy, show that you appreciate and use their comments and ideas in your business and that you try to create an experience around your product. To do this, marketers must utilize social media/online sites, product placements, event sponsorship and of course get the millennials talking about your product since they trust each other more than they trust you. If a business manages to market these messages in these ways, millennials will most definitely take notice of your company and its product.