Target Marketing to Millennials Requires Refined Segmentation

Stephen DeAngelis

November 3, 2014

“As marketers,” writes Paige O’Neill (@paige_oneill), Chief Marketing Officer at SDL, “we know that consumers of all ages — especially young adults — are device-savvy and no longer thinking in terms of channels, devices or operating hours. So why do we keep marketing to them in such finite ways? It’s time marketers started to reach today’s consumer in the same way they are experiencing life — from a completely holistic perspective.” [“Why you should include Millennials in your marketing strategy,” iMedia Connection, 10 September 2014] As her headline proclaims, the young adults to which O’Neill refers are members of the group commonly called Millennials or Generation Y who were born between 1980 and 2000. Leigh Andrews (@Leigh_Andrews) reminds us that Millennials include “everyone from the 14-year-old high-school teenybopper to the 34-year-old mid-life crisis experiencer.” [“Millennials? What millennials? Target the correct age demographic on social media,” Bizcommunity.com, 7 October 2014] Although 34 might be a bit young to be experiencing a mid-life crisis, Andrews’ point is a good one — the 34-year-old and the 14-year-old have little in common. As Millennials grow older, the differences in their ages won’t matter as much as they do today; but, right now, marketing to the teenybopper using the same campaign that was tailored for the 34-year-old makes little sense. Executives from the advertising firm Exponential Interactive go even further and declare, “There’s no such thing as millennials.” [“Why You Shouldn’t Market to ‘Millennials’,” by Nicole Fallon, BusinessNewsDaily, 1 October 2014] Fallon (@nicolefallon90) isn’t buying that assertion. “This bold proclamation,” she writes, “will likely elicit scoffs and outrage from marketers who have made careers out of targeting Generation Y over the past decade. Of course millennials exist — just not in one neat, unified demographic.”

 

The next generation with money to spend is always of interest to manufacturers, retailers, and marketers. Right now Millennials are that generation. John Eldridge, strategy consultant at Guiding Stars Licensing Co., told FoodNavigator-USA, “When a new generation comes along, we as an overall group of business people and experts have a natural tendency to underestimate the influence of emerging generations. I think Millennials are going to surprise us in ways we’re really not anticipating. Some of that will have to do with their outlook, attitudes and values, some with information technology and the way it keeps evolving so rapidly.” [“Don’t underestimate Millennials’ influence on the consumer landscape,” by Maggie Hennessy, FoodNavigator-USA, 12 August 2014] Most of the articles written about Millennials and their spending patterns apply to those in their twenties and thirties, those who have “come of age.” That should be kept in mind as you read about how to tap into the Millennials market. Yuyu Chen (@chenilleyuyu), for example, refers to Millennials as those between the ages of 18 and 36. “When marketing to this segment,” she writes, “you need to think about three key elements: Smartphones; social media; and hyper-targeted content.” [“3 Keys to Millennial Marketing: Smartphones, Social Media, Hyper-Targeted Content [Study],” ClickZ, 6 June 2014] Chen notes that Generation Y is probably the most tech-savvy generation that has ever lived. She continues:

“In its latest report, Content Finds the Consumer, global consumer experience management company SDL provides an examination of Millennial media habits. The results show that close to 70 percent of Millennials use two different devices every day. Among them, smartphone usage dominates. Millennials check their smartphones 43 times per day. Meanwhile, Millennials like communicating with businesses on social media platforms like Facebook and Twitter, according to the report. More than two-thirds of Millennials responded that they embrace brands on social media in order to get discounts, while 56 percent to receive free perks. In addition, this segment turn first to social networks to discover content, and further share the content via social media. By contrast, email and search engines are the least favorite channels.”

Even though Millennials love their smartphones, Steve Smith, Editorial Director for Events at MediaPost, reports that they don’t necessarily like to be bothered by advertising on those devices. [“Your Marketing Is More Of A Bother Than A Benefit To Millennials,” MediaPost, 1 July 2014] He explains:

“Think that 20-somethings are more comfortable with next-generation gadgetry, tracking and sponsorship formats than their old-fogy elders? Think again. According to a Razorfish survey of over 1,500 Millennials in the U.S., U.K., China and Brazil, 77% considered it an ‘invasion of privacy’ when advertising targeted them on their phones. The Drum reports that sensitivity to targeted mobile advertising is actually highest in the U.S., where 79% of youthful respondents equated mobile targeting with a breach of privacy. Keep in mind, surveys like this are polling reactions to questions, not actual reactions to ads. The survey may be even more instructive about the kinds of advertising Millennials especially dislike. For instance, 77% of respondents disliked seeing the same ad again and again, while there was also widespread disdain for ads touting products the consumer had already purchased.”

If the marketing picture for Millennials seems blurry or confusing, that’s because it is. Many Millennials are still trying to figure out who they are and what they want. That’s especially true for the younger members of Generation Y. For an entertaining article about where generations begin and end, read “Here Is When Each Generation Begins and Ends, According to Facts” by Philip Bump (@pbump). [The Wire, 25 March 2014] Despite this confusion, O’Neill asserts, “Finding today’s Millennials isn’t hard and won’t take longer than looking at your brand’s social media pages.” She also agrees with Steve Smith that Millennials don’t like pushy ads that feel like an invasion of privacy. She explains:

“Sometimes understanding what someone wants comes from knowing what they don’t want. In Forrester’s most recent Customer Experience Index, it cited that consumers despise and distrust push-style marketing methods that interrupt or intercept them, and almost half of consumers (49 percent) don’t trust digital ads. They have their own workarounds in the form of feeds, apps, and other ad-free content that they control. If these methods aren’t working, marketers should stop doing them and invest in collecting and using data as a key source of intelligence for hyper-segmentation and targeting. Done right, targeted marketing messages add value for your customers. However, done wrong, they seem creepy. Use customer data deliberately so you can deliver messages that are consistent, considerate and relevant. Once you do, you’ll start building the kind of credibility that matures into brand advocacy. Remember, Millennials want to be heard, understood, and are looking for companies to reciprocate their engagement.”

The most profound thing that O’Neill points out is the importance of data and how it can be used for hyper-segmentation. As noted above, Generation Y may be a generation on paper, but the individuals who make up that generation vary so widely that it can’t be addressed as a homogeneous group. Only hyper-segmentation can help create targeted marketing efforts that reach the right person at the right time with the right offer. O’Neill continues:

“Once you know what a millennial is looking for, it’s possible to build their trust and admiration, which is critical as Millennial consumers can be exceptionally loyal customers if they feel they are treated right. Accenture recently found that 95 percent or more of Millennials want brands to court them through various channels like email or text messages. Likewise, 60 percent of Millennials polled told SDL that they like receiving brand-building communications that aren’t focused on selling a product, such as a holiday or birthday card. While other generations may find it intrusive for a brand to know their birthday or age, Millennials expect this level of communication and rely on their favorite companies to interact with them virtually, in the same way they would interact face to face. This means throughout the customer journey, too — not just when the website gets a click. Be proactive and with your consumers over the lifetime of their experience with the brand. Constant monitoring and analysis of brand engagement with appropriate interactions will ultimately create Millennial brand advocates.”

Over the next ten years, the importance of Millennials in the CPG arena will only grow and their marketplace influence could last for several decades. That’s why marketers are so interested in reaching out to members of Generation Y. O’Neill concludes, “By tracking customer data daily, you will be equipped to provide the right information and the right offer at the right time, and you will be ready for tomorrow’s customer today.” Smith adds, “Getting the tone right appears to be a real challenge for crafting this kind of content for this audience. Millennials want to be spoken to on a human level and with humor, the research suggests. Pop culture references are always helpful, and the content should be helping the user escape or engage their own creativity. In other words — don’t act like their parents.”