North Thinking
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DIGITAL MEDIA DIGEST: NOV ‘17

A monthly look at the world of digital from NORTH’s point of view

Generation Z: They Grow Up So Fast

Izzy Kramer, Media Planner

Image Source: Izzy Kramer

Generations are one of those fun topics that everyone can relate to. No matter who you are, you belong to a generation, while also knowing others who belong to the same or a different generation. Generations give a sense of identity, and, for the most part, do a good job of summarizing the collective group.

So, it is all of these reasons and more why I’m talking about this topic today, specifically the up-and-coming generation, Gen Z. Following behind the sought-after Millennials, Gen Z are already beginning to make a claim for themselves. So much so, they have gained the name the “Pivotal Generation”, or “Pivotals” for short.

With this said, as Generation Z grows up, everyone is gaining a better understanding of who they are and what is important to them. Which brings to mind how brands can reach Gen Z and what types of media channels resonate with them. But before we dive into that, who are Generation Z?

Generation Z are young adults and teenagers who were born between 1995 and 2010; they make up over 27% of the global population. This generation is described as being pleasers, well-grounded, collaborative, worriers, and savvy. For those living in America, they have experienced a world shaped by 9/11, the Great Recession, the first United States African-American President, and Marriage Equality.

Generation Z value both traditional and non-conformist ideals. They are financially responsible, value education, and consider family as a high priority. They also tend to think more globally than locally, do not conform to traditional norms of sexual preference, and are polyethnic.

Furthermore, unlike generations before them, Gen Z is the first that have never know the world without Internet. Above all, this has shaped Generation Z into who they are today and how they interact with the world.

The eldest of this generation will be turning 23 in the next year and have started entering into the workforce. Jobs equal money, and money equals buying power. But even for the younger Gen Zers, who are navigating their way through school and live at home with their families, they still have a large portion of the Gen Z buying power pie.

According to Entrepreneur and Small Biz Trends “teens and young adults…buying power already exceeds $44 billion and…influence $600 billion in family spending.” Furthermore, “they influence the way their parents spend more than Millennials did, including over 70% of family food choices and 80% to 90% of items purchased for them.” Keeping in mind that their buying power will only continue to grow as Generation Z gains financial independence over the next five to ten years.

Image Source: Pexels.com

So in this crucial and fragile growing period, how can brands begin to develop a trustworthy and loyal relationship with Generation Z?

First off, social media isn’t as much of a straightforward solution when reaching Gen Z as it is for other generations. “We are seeing a shift in social media usage away from the Millennial mentality of broadcasting everything, to the new mentality of only broadcasting specific stories, to specific people, on specific channels” according to Getting to Know Gen Z: How The Pivotal Generation Is Different From Millennials published by FutureCast. Their influence effects why platforms like Snapchat and Instagram Stories have risen to the top. They provide more control over how long content is available and who you share it with.

We are talking about a generation who has grown up in a world overly saturated with technology. They are technologically empowered, adapting quickly to progress. This prompts them to think more strategically about when they choose to use technology and for what reason. “Brands willing to support [Generation Z’s] ambition and play by their rules will win their loyalty.“

Secondly, “diversity will be an expectation of Generation Z”. This is both in terms of what they expect to see from the world around them, as well as what we, the generations before them, will expect of them. Generation Z is the most globally-minded generations thus far. They have a lot in common with their global peers and have fast and easy access to build these relationships. There is also an increasing number of multiracial families with multiracial Gen Z children. As this trend in families continues, racial lines will blur, potentially lessening the consistent awareness of race boundaries. With this said, Generation Z will expect brands and the advertising industry to genuinely mirror this multiracial acceptance. Brands that do not will lose favor.

Lastly, brands must understand Gen Z are doers, always having the resources and tools they’ve needed at their fingertips. For example, according to A Defy Media Acumen Survey published earlier this year, 50% of Gen Zers surveyed said they “could not live without” YouTube, as they go to this platform for shopping recommendation, to catch up on news, how-to videos, and an general “good laugh”. It is important to understand the digital culture Gen Z is native to, even more so than Millennials. They are drawn to quick and informative video content like bees are drawn to honey. It is these channels that brands should considering being active in, if the fit is authentic.

With all that said, this is just the top of the Generation Z iceberg. As they begin to define themselves, we will gain a clearer understanding of when and where to reach them.

Amazon Illustrates The Importance Of Measuring Lifetime Customer Value

Devon Brown, Performance Marketing Manager

Image Source: Optimove.com

Last week, Amazon announced its intentions to create pop-up stores in Whole Foods retail locations. This doesn’t come as a huge surprise, as many surmised moving Alexa product was the key driver behind the entire acquisition in the first place. In addition, they announced that these pop-up shops will employ sales personnel to conduct product demos, sell Prime services, and in some locations, Amazon lockers will be installed. For those who aren’t familiar, Amazon lockers are small combination accessible lockers where you can pick up your Amazon orders rather than having them shipped to your home or office.

On the surface, these three announcements seem inconsequential, however, they have the potential to remove one of the key drawbacks of shopping at Whole Foods and fundamentally change shopping behavior within urban areas. And it all starts with the atrocious household item selection at Whole Foods. If you’re a frequent Whole Foods Shopper, you know that you go somewhere else whenever you need household or personal staples such as toothpaste, tin foil, or Tupperware. Why? Well…the stuff they have there is…hippie. None of the cleaning products have bleach, the deodorant is powdered or weird or smells like patchouli, paper towels are 7x recycled pizza boxes so they fall apart in an instant, I don’t even think they have plastic sandwich bags… it’s just not practical. If you need dish soap or light bulbs you go to a “real” grocery store, and now, those $50 on groceries will be spent at Freddie’s rather than Whole Foods.

Enter Alexa, Amazon Prime and Amazon Lockers. You can order almost anything on Amazon and it will be waiting for you at Whole Foods when you stop to grab your lunch or groceries. And because Amazon works on a past purchases and review-based algorithm, brand loyalty will skyrocket. The days of trying a new brand because that’s all that they had at the store will be over. You can order the same brand you’ve loved since you were 12, or go back to a brand that’s hard to find in your trendy, environmentally conscious, urban oasis.

And this is why understanding, measuring, acting on customer lifetime value data will be more important than ever. One or two marketing messages could result in thousands of transactions over the course of a few years and brand loyalty can start before a consumer is even aware of your brand name. For many, this means no more making pilgrimages out to the suburbs on weekends, because there are customizable grocery store inventories just for you, right in the middle of the city.

Google is currently putting a huge emphasis on lifetime customer value measurements, introducing new relationship models, guides and use cases. The technology is evolving and still rolling out, so I’ll be sure to check back in as things develop.

Facebook Ads Come Into The Light

Caroline Desmond, Director of Media

Image Source: AdAge.com

Facebook recently announced it will allow all ads running on the platform to be viewable by anyone. In effect, Facebook is bringing “‘dark posts’ into the light” as noted by an AdAge commentary on the topic. This comes in response to the election interference last year, and the new rule will affect all advertisers.

For those unfamiliar, “dark posts” (also known as unpublished posts) are a type of ad tactic brands have used on Facebook to target content to a particular subset of users without having to make posts visible on the brand page.

The underlying danger of dark posts is that they allow brands or public figures to represent one point of view to one audience and a completely different point of view to another audience. Dark posts remove an element of accountability and create a risk of “two-faced” communications. This is particularly true of political advertising where candidates have been able to manipulate opposite ends of a political spectrum to their advantage, in essence fanning the flames of divergent interest groups. And because ads were not visible on the candidates’ official pages, it was not apparent to those who saw ads that a candidate was, in effect, playing both sides against the middle.

Facebook clarified that advertisers will still be able to run promoted posts that do not appear on the timeline of their page, but a new disclosure system will allow ads to be viewable by anyone. Under this new policy of transparency, all brand pages will have a “view ads” icon that will show exactly what messages that advertiser is placing on the newsfeed.

As AdAge points out, there are some competitive intelligence benefits to brands under the new system. In the past, it’s been very difficult for brands to know how competitors are positioning themselves in social channels. Even the leading competitive intelligence reporting, Kantar Media, does not yet pull paid social creative. Now, it will be as simple as going to the competitor brand’s page and clicking on the “view ads” icon to see a full line-up of social campaign creative. This enables greater market intelligence for brands seeking to carve out a unique creative position in light of what rival brands are doing.

The bummer of the new system, for brands at least, will be the lack of privacy afforded to A/B ad testing now that all ads will be visible. One of the main benefits of dark posts has been that brands could A/B test a series of different images and copy points to discover the best performing combination before upping investments against a particular set of ads. Now, all of a brands “homework” with regard to creative testing will be readily viewable by users who click to “view ads” from the brand page. Inconvenient as this may be for brands, it is a necessary measure in light of the greater risk of manipulative actors. (Facebook has revealed that foreign actors used the same A/B testing for dark posts to refine messages to manipulate target audiences in the last general election.) In an industry that must self-regulate, or risk greater regulation by the government, it is prudent for companies like Facebook and Twitter (who has also announced transparency measures) to anticipate these risks and take precautionary measures. Initial reports are that the new transparency tools will be fully rolled out by the midterm elections in 2018.

Amazon Issues Brick–and–Mortar Stores a Reality Check

Sean Brennecke, Assistant Media Planner

Image Source: Amazon

Amazon recently announced a new feature for the Amazon app called AR View, which uses augmented reality technology to create 3D renderings of thousands of products — home décor, furniture, toys and more — and view them around your home prior to purchase.

Want to see how that shiny new espresso machine fits into your kitchen? Simply open the Amazon app, enable AR View and the product will appear directly in front of you, on your smartphone. But for now, Amazon’s AR view — built by Apple’s ARkit technology — is only available for iOS devices running iOS 11 (iPhone 6S or higher).

With augmented reality (AR) and virtual reality (VR) technologies becoming more prevalent, the terms are often used interchangeably, so it’s worth noting the distinction between the two. VR requires a headset and uses 360-degree video to place a user in a new virtual environment. To experience AR, a user will typically use a handheld device (e.g. smartphone) to visualize digital elements in your line of sight. Simply put, VR replaces your reality, while AR enhances it, as noted by Adweek.

What does this mean for brands?

AR visualization is on an upward trend (thanks to Apple and Google) and is expected to record more spending than VR by 2022, noted Adweek. In fact, major furniture retailers like IKEA, Target, Lowe’s and Wayfair have already found ways to incorporate the technology — it’s a no-brainer. If you’re in the market for furniture, why waste your time in a showroom when you can use an app to see how the product fits into your own home? Although AR is in its infancy, the technology does a nice job at providing users with a good sense of a product’s dimensions and color. And for undecided consumers, AR could be just the push needed to convert them to completing that purchase online.

But wait, there’s more!

The number of AR users is projected to hit 200 million by 2018, according to Statista. Considering this, it should come as no surprise that social media will be one of the most prominent ways to reach consumers with this technology. For brands, incorporating AR into social media ads enables users to virtually try and engage with product. For example, Estée Lauder invited customers to virtually try out different shades of lipstick with the help of LipArtist, a Facebook Messenger Bot (pictured below).

Image Source: Augmented.Reality.News

If customers were satisfied with their lipstick selection, they were then invited to visit the brand’s website to purchase it.

While AR might not make sense for every brand, it’s important to consider how it could continue to drive consumers away from brick-and-mortar stores. Conversely, if you’re a brick-and-mortar store, it’s especially worth considering ways to counter this by leveraging AR to attract consumers and enhancing their in-store experience (see Legos). In this day and age, we are always looking for faster, more convenient ways to go about our lives — especially when it comes to shopping.

AR has the potential to change the way we evaluate product and create informed purchasing decisions online. With AR advertising spending on the rise, brands should be sure to keep AR on their radar.

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A collection of articles from North.

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North

North

North is an independent advertising agency in beautiful Portland, Oregon that creates fans for brands and good companies who give a little more than they take.

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