Guess Who’s Growing Up?

As traditional marketers increasingly test the Internet (however tentatively), the most enthusiastic are those eager to reach Generation Y, that group born roughly between 1977 and 1994. For companies like Pepsi, Frito-Lay, and Levi-Strauss, these young people are their bread and butter — and Generation Y spends a great deal of time online.

A Harris Interactive poll of college seniors last year found nearly 100 percent were online, spending an average of 11 hours a week on the Internet. That’s nearly double what a survey of 1997 graduates revealed.

Lest you think I’ll be exploring the characteristics of these “kewl” kids, here’s what really interests me: What will happen as this group ages?

The now 50ish baby-boom generation had an incredible impact on marketing and advertising. As they passed through life stages — from hippies to career-oriented yuppies to parents and now grandparents — their values were reflected in the marketing messages targeting them. The world seemed to revolve around baby boomers because the group is just so huge. According to U.S. Government statistics, at the peak of the baby boom in 1957, 4.3 million births were recorded, a 19 percent increase from 1948.

The “baby-boom echo,” as Generation Y has been called, peaked in 1990 with 4.1 million births, a 25 percent increase from its 1977 beginning. The baby boomers’ children will likely affect the world of marketing and advertising as strongly as did their parents — fantastic news for Internet marketers.

“Where others have tagged them Generation Y, Generation Next, and even Generation 2001, this group is telling us it prefers to be called ‘The Cyber Generation,'” said Deanna Tillisch, director of the abovementioned Harris study. “It’s not surprising given their dependence on the Internet. This is the first generation that can stake a full claim to the Internet — they’re virtually 100 percent connected.”

These are college kids, not Joe Ordinary, but bear in mind this is probably the most educated generation America has ever seen. In homes headed by an individual under 25, 65 percent of heads of household attended college. That compares to 62 percent in the 25 to 34 category; and only 58 percent in the 35 to 44 age bracket.

Being both in college and of school age undoubtedly influences this group’s Internet consumption. They have more disposable time to instant message their buddies, download music, play games, and surf the Web while doing their homework. Some of these communication habits are likely to stay with them throughout their lives. According to the Pew Internet and American Life Project, 76 percent of online teens say they would miss the Internet if they could no longer go online; 48 percent say their use of the Internet improves their relationship with friends; and 32 percent say Internet tools help them make new friends.

“While they don’t transact online because they don’t have credit cards, the Internet impacts teens’ offline purchase behavior,” said Noah Yasskin, research director for Jupiter Media Metrix, last year, after studying teens’ online buying habits. “Longer term, as experienced users, they are likely to become online shoppers when they become adults. Much of today’s teen behavior will be mainstream tomorrow. Teens pioneered text messaging on mobile phones and chat on instant messenger applications, both of which are becoming widespread. They are showing the potential uses of the Internet beyond email and visiting Web sites using a browser. Teens flocked to Napster and are heavy users of communication applications, sending their peers music files, photos, and other digital content.”

The leading edge of Generation Y does have credit cards. According to the 2001 Northwestern Mutual/Harris study, 37 percent of college seniors surveyed have three or more credit cards; another 49 percent have one or two cards.

With credit cards comes other spending: new cars, starter homes, and, eventually, minivans and diapers. The oldest Generation Yers turn 25 this year. Toyota noticed. At this year’s New York Auto Show, the automaker unveiled its new youth-focused Scion brand and accompanied the launch with an Internet marketing effort clearly targeted toward the Net savvy, complete with music downloads and dynamic Flash animation.

“The site is hip, streamlined, technological without being geeky, and loaded with visual imagery,” Rick Bolton, founder of Fresh Machine, the agency that built the site, told Internet Advertising Report. “Toyota’s Scion aims to connect in a new way with a new generation of car owners.”

I’m betting more and more traditional marketers will look to make that connection as this sizeable generation’s buying power increases. Where will they look? To the Internet, of course.

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