The topic of millennials is marketer clickbait—but should it be? In this new video blog, we explore whether marketers should be as focused on the idea of millennials as they are (hint: the answer is no).
Editor's Note: What follows is a slightly edited transcript of the video for folks who can't watch it right now! All sources appear at the bottom of the post.
It seems like anyone who wants to make money is obsessed with the idea of marketing to millennials. The thing is, marketing to millennials is kind of ... dumb.
There are lots of reasons to take a hard look at the millennial marketing obsession. The millennial age cohort isn’t at all homogenous and we really don’t have that much money. But before you take to the comments section, hear me out.
1. Millennials aren’t really a thing.
Defining millennials in any kind of meaningful way is difficult. Respectable sources like Strauss and Howe and the U.S. Census Bureau use age ranges that vary from 15 years to about 25 years. Because there’s no “right” answer, even sources like the White House Council of Economic Advisors are forced to compare statistics using different age ranges.
According to the Census Bureau, millennials represent about 1/3 of the total U.S. population, or 83.1 million people. We’re the largest generational group in the country. The eldest of us are in our mid 30s, while the youngest are finishing up high school. You could be a millennial and have a millennial child.
This group is also much more diverse than past generations. About 42% identify with a race or ethnicity other than non-Hispanic-white, about twice the rate reported by Baby Boomers at this age.
So, in spite of the pervasive use of the term “Millennial” in marketing research and writing and the fact that everyone has a very clear idea of what it means... the idea of millennials isn’t particularly useful to marketers.
2. Millennials aren’t as lucrative as you think.
One problem with millennial marketing strategy is that numbers are often tossed around without context. Case in point: Millennials are estimated to contribute around $200 billion of annual spending to the U.S. economy. That seems like a lot, unless you compare it to the $2 trillion in annual spending among baby boomers and $736 billion from Generation X. Our relative buying power will certainly grow, but that’s where we are now.
Here’s a more relatable way to look at it, from the Bureau of Labor Statistics:
Millennials are perceived as a stronger economic segment than we currently are. We are the most educated generation in American history, but that’s not exactly helping us yet. Inflation-adjusted median income has actually decreased since the 1980—by about $3500 a year, even though we’re more educated.
Our parents were and are able to accumulate wealth much more readily than we are; our net worth is just 43% of the Gen X peak in 1995. We’re also more likely to be underemployed, unemployed, and to live in poverty.
That sounds really dismal, but the actual numbers are beside the point for marketers. It’s perception that affects spending, and millennials are having a rough time there as well; about 80% of employees under 30 say they expect to be “much worse off” in retirement than their parents’ generation.
Things like lack of benefits at work, student debt, stagnant incomes, and trouble contributing to retirement plans have led to a feeling of insecurity, and we can see the results: millennials are getting married later, waiting to buy houses, and putting off having kids. And all of these economic choices are intimately related to marketers’ goals.
It’s true that the eldest Millennials are currently in the early stages of our careers, and we’ll be extremely important to the economy long term—but for now, we’re not the most lucrative demographic by pretty much any metric. Yet marketers reportedly spend 500% more on millennials than any other generation.
3. Marketers’ obsession with the 18-34 crowd isn’t new.
Look, I get it. Young adults represent the chance to build long-term relationships with high lifetime value. That’s still important, but customers aren’t simply choosing between Macy’s and Gimbel’s anymore. There are exponentially more options and the market operates in a fundamentally different way than it did just a decade ago.
That’s why the idea of the millennial has been a useful tool in navigating this radically different economy. It’s centered on buzzwords like mobile, social, authenticity, connectedness, and social responsibility. “Millennial marketing” is shorthand for these and other changes that have taken place over the last few decades.
At best, this can lead to great marketing. Much of the time, though, the result is simplistic, sometimes condescending, and can totally miss the point. Listen to this quote, from a New York Times article about marketing to millennials:
"Some brands, for instance, are trying to figure out how to use emojis, a pictograph-based language of happy faces and hearts that is important to millennials."
Emoji aren’t important to us. They’re useful to us. People like having more expressive options for communication, like GIFs and now-defunct Vine, the offspring of which are apps like Boomerang and DubSmash. Marketers who just slap an emoji on things rather than thinking about how they can be more expressive won’t be successful.
That same article quotes Matt Britton, saying “Brands need to re-engineer how they reach millennials. Brands need to figure out how to add value to a consumer’s life. And if they do that, consumers will seek brands out.”
Now, that’s true—but not for or because of Millennials. That’s just how marketers need to behave in an era of transparency and choice, in which anyone can easily find an option that better fits their needs and adds value to their lives.
Researching this video, I read an article that said that millennials were more empathetic because we use social media and are therefore exposed to more experiences and perspectives. While there are numerous problems with that statement (*cough* social media echo chamber *cough*), the most germane one is that it’s the social media use and not the age of the user that's most relevant. And while the early growth of social media was strongly driven by young people, it has gone global.
It’s easy to fall into the trap of using youth as a proxy for innovation, but you can be just as innovative marketing to a 70-year-old grandmother as you can to a 17-year-old high schooler—and Nana's the one with the money anyway.
4. Marketers do need a shorthand, but we can do better.
So am I just saying that any categories are worthless because humans are special snowflakes and we’re all unique, so marketers should only practice 1-to-1 marketing? No! I’m saying that as marketers what we have to offer is much more specific than anything that would appeal to a group of 80 million people, and you’ll get a better ROI by focusing on that unique value.
Regardless of whether you’re marketing to millennials or boomers, the process is the same—decide who your ideal customer is, learn everything you can about them from your own real-life data and interactions, really listen to what they need and the kind of experiences they want to have, and then give them that.
Millennials are often referred to as digital natives, and that much is true. But while we are concurrent with this change, and it’s happening at a time of our lives when we’re especially open to it, it doesn’t belong to us. Millennials spend 41 percent of our media time on mobile devices, but 35-54 year olds aren't far off, spending 34 percent of their media time. That’s only 7 points less, and even the 55+ crowd still spends 16 percent.
Our digital fluency may make us early adopters (especially of free technologies, I would note), but we’re certainly not the only ones and we may not be the most lucrative.
My mom recently sent me an Airbnb listing she liked and I hadn’t even downloaded the app yet. But while my mom is excited about crashing in a stranger’s house, my boyfriend’s parents don’t want to have the internet at home. When it comes to generational groups, things aren't simple.
Airbnb actually does an amazing job of marketing to their exact niche and they’ve scooped up non-Millennials like my mom as a result, but lots of brands find it easier to use the shorthand. And I do empathize with them for all the reasons why. Things move very quickly and the threat of getting left behind looms large.
You can avoid the overwhelm by focusing on the root of the matter—what your ideal customer needs and wants from your brand. This probably doesn’t sound revolutionary to you, so why isn’t it happening more often? Probably because it’s a lot harder to ask who really wants your product and why, and to back it up with research, than to say you’re going to start an Instagram because that’s what Millennials like.
And on that note, I’m going to Instagram this.
15 Economic Facts about Millennials – The Council of Economic Advisers
4 Ways Millennials Have It Worse Than Their Parents – Josh Sanburn, Time
Brands Woo Millennials with a Wink Emoji or Whatever It Takes - Sydney Ember, The New York Times
Consumer expenditures vary by age - Ann C. Foster, Bureau of Labor Statistics
How Much are Marketers Spending on Millennials? A Lot! [INFOGRAPHIC] - Aaron Miles, Social Media Today
Millennials and Homebuying: Myths and Reality - Kamran Rosen, Nerdwallet
Millennials Outnumber Baby Boomers and Are Far More Diverse, Census Bureau Reports - United States Census Bureau
OMG, Young Millennials Are the Job Market's Biggest Losers - Stephen Gandel, Fortune
The future of wealth in the United States: Mapping trends in generational wealth - Val Srinivas and Urval Goradia, Deloitte University Press
We’re Making Life Too Hard for Millennials - Steven Rattner, The New York Times