Refuel Agency President & CEO Derek White Talks Gen Z with the Association of National Advertisers

Refuel Agency President & CEO Derek White Talks Gen Z with the Association of National Advertisers

April 20, 2016

generation zIn looking for ways to target Generation Z — those born between 1995 and 2010 — Just Born Quality Confections, maker of popular candies such as MIKE AND IKE, HOT TAMALES, and PEEPS, quickly made a surprising discovery. “We did quite a bit of qualitative research with Gen Z and were fascinated by the way they played back commercials in incredible detail,” explains Kathleen Parker, vice president of marketing and innovation at the candy company. “Furthermore, they were describing them with excitement Parker adds that many of these ads were not your traditional 15-, 30-, and 60-second TV spots but says their impact among teens was still strong. “This audience may be viewing video in new places, like YouTube and Instagram, but the important point is that they are viewing and recalling video,” she says. “To us, that means opportunity.”

Though many in Generation Z are still too young to drive — let alone vote, own a house, or have a career — marketers have disruptive groups in terms of media consumption, thanks to their tendency to look for content beyond the traditional platforms of TV, radio, and print. “They’re the true digital generation,” says Sandy Greenberg, co-founder of the New York– based agency Terri & Sandy, which works with a number of brands targeting Generation Z, including Just Born. “They’re very impatient and the multitasking going on, with multiple screens, is staggering. It’s Millennials on steroids.”

But even with that challenge, Generation Z may also be something that brands and their agencies have been wanting for a long while: a demographic that truly appreciates a quality ad. And because they’re coming of age in a period of general economic stability, if not outright prosperity, Generation Z could actually end up being the catalyst for another Golden Age of advertising, especially for brands willing to create digital experiences that are entertaining and present products in ways that are meaningful and relevant to this audience.

“Gen Z, even more than their Millennial counterparts, will travel across digital media,” says Ara Finlayson, director of agency insights at Fuse Marketing. “It’s important for brands to go with them.”

An amazing consumer powerhouse

By most estimates, Generation Z in the U.S. numbers about 80 million, almost all of whom have grown up in a world in which digital, social media, and mobile have played an integral role in their day-to-day lives since they were old enough to hold a smartphone.

The oldest segment of this group, 13- to 21-year-olds, are now spending in excess of $40 billion annually, according to the more importantly, they seem to be playing a large role in major family purchase decisions. “Their parents really want to please them, so even though they may not be earning money, they get a lot of allowance,” explains Derek White , President and Chief Exexutive Officer at Refuel Agency, a youth marketing specialist with offices in New York, Princeton, NJ, Los Angeles, and Santa Barbara, Calif. “And even in categories that they shouldn’t even be involved in, like cars, parents are turning to their kids for input.”

The economic and social impact of Generation Z will only grow over the next several decades, leading to changes in everything from the pace of urbanization across the country to the levels of household debt, says Finlayson.

“By 2025 Gen Z will grow significantly, becoming the largest generation and totaling 29 percent of the population,” she says. “Most of Gen Z will also live in cities — for growth in cities is outpacing growth outside cities.”

Finlayson says that having watched the preceding generation struggle with unemployment and debt, today’s teens are already saving money at a higher rate than young Millennials did, meaning have potentially more disposable income when they reach adulthood. That makes them a good investment for a broad range of marketers, even though they may not be interested in their products and services, like insurance or home purchases, for some time.