From Gen Z to perennial marketing
Predictions for 2017
Targeting is crucial in identifying new sources of business growth. The twenty-something demographic is always in the spotlight as they represent the new generation of earners and spenders, and, allegedly, many of their life defining moments will happen before they reach 30. This is why the Millennial generation has been the targeting point for the past five years. We have seen a shift in focus where Gen Z is being called out as the next cool target in 2017.
The most important life-defining event for Gen Z has been the proliferation of technology and the digital economy. The interest in Gen Z in 2017 has been driven by the first small cohort of early Gen Z (born between 1995 and 2012) college graduates entering the job market.
What happened in 2017?
No doubt Millennials and Gen Z were enjoying the attention in 2017. Populated by true digital natives, Gen Z is not only the best preview of future generations, but also reveals the behaviours older generations will eventually adopt when it comes to technology. One of the lessons learned from the populism movement and how the pollsters in the UK failed to predict the Brexit results is the feeling of exclusion experienced by a significant proportion of the population. Equally, businesses tend to over-focus on Gen Z based on perceived brand potential, so show little interest in over-35s and treat over-55s as if they don’t exist, even though they are expected to represent 50-86% of consumer spending growth (source: Eurostat).
There will still be a lot of hype around Gen Z in 2018 but we believe the way the world has changed and is still changing in terms of media, marketing and society calls for us to fundamentally re-think the rules of targeting. A key part of re-thinking targeting is about accepting the flexibility and fluidity of life-stage as people live longer. Empty nesters are rediscovering the joys of youth and those who never had kids are still indulging. So we should target across generations ‘perennially’ based on mindset and interests. This approach maximises relevant consumers at point of change and takes advantage of new digital targeting opportunities. Rather than talk of demographic generations, we should also be thinking about how to maximise the perennial appeal of our brands based on what makes them meaningful. As people live longer these days, we also expect the narrative to encourage people to embrace the gift of (long) life.
What does this mean for marketers?
The 21st century has seen massive developments in targeting providing an array of new consumer insights and a wealth of marketing opportunities for brands. There is now a clear science behind this, combining the learnings of behavioural economics with the infinite targeting opportunities of addressable media and the boost offered by personalised advertising and relevant content.
Marketers need to re-wire the way that they think about target audiences, recognising the needs of different segments at each stage of the journey. A demographic buying audience delivers something very different in the digital space versus broadcast, which is why you need to find new targeting approaches that align well with purchase behaviour rather than demographic, which tend not to.
The secret to brand success is about identifying whom to target, with what to communicate and how to best convert to sales. Marketing Science has shown that brands grow by increasing penetration not by getting existing buyers to buy more. Winning at point of change is key to increasing penetration so we should be taking advantage of new relevant targeting techniques to identify these consumers at sufficient scale to achieve this goal. Today, consumers buy brands that stand for something. In a world where brand-led advertising is getting easier to avoid, there is an opportunity to produce consumer-led content, reflecting what consumers want to engage with rather than just what brands want to say.