8095whitepaper

The 8095 Exchange:Millennials,Their Actions SurroundingBrands, and the Dynamics of Reverberation

CONTENTS Introduction (3) 8095 Research by Edelman and StrategyOne. Methodology: Research conducted by StrategyOne between February 24 - March 8, 2010. Surveyed Brand Relationships as a form 3,100 respondent Millennials (those born between 1980 - 1995) in eight countries: Brazil, Canada, China, of Self Expression (5 ) Germany, India, Italy, the United Kingdom and the United States. Three hundred interviews conducted per country, U.S. as an exception with 1,000 Information is a key to Influence (10) interviews. Online survey. +/- 1.8 margin of error for the total sample. For more information on 8095, contact: Taking Action is a Core Value (14 ) Christina Smedley Global Chair, Edelman Consumer Marketing christina.smedley@edelman.com Reverberation is Online, Offline and Alex Abraham increasingly Mobile (18 ) Vice President, Group Head Edelman Consumer Marketing alex.abraham@edelman.com Not an end, a beginning to Material may be used with credit given to the Exchange (23 ) Edelman/StrategyOne. 2

INTRODUCTION According to CIA World Factbook, more than 1.7 billion people on Italy, the United Kingdom and the United States. Our focus was on earth today are between 15 years and 30 years of age, with an listening, not judging and to avoid the stereotypes that obscure average age of 28. Worldwide, they are known as Gen Y or the what’s truly distinctive about Millennials and the ways brands fit into Millennial generation. their lives. We, however, call this diverse population – born between 1980 We wanted to understand how Millennials: and 1995 – the 8095 generation. • connect with brands The fact is, as a group, Millennials are now in charge, spending more • form and share their opinions about products than any other generation and spending it in ways that a generation and companies ago or even a few years ago was unimaginable. To understand Millennials is to begin to understand how to connect and interact • use technology to build their networks and with this extraordinary population. Marketers cannot afford to ignore share information Millennials. More importantly, none of us will succeed without them. • make purchasing decisions As Kit Yarrow and Jayne O’Donnell, authors of the bestselling Gen • are influenced by their families and peers and Buy wrote, Millennials are “the largest, most diverse, educated • influence others and influential shoppers on the planet.” An IRI study indicated that Millennial women 20 – 30 years of age represent a $54 billion Feedback from our internal focus group suggested that Millennials marketing opportunity, which in the next few years will surpass don’t trust what research up to now has said about them. In fact, baby-boomers in consumer package goods spending. those in the focus group were more blunt than that. They said that no one has Millennials figured out yet. In this research, we’ve developed a complex point-of-view, truly reflective of a diverse generation whose defining life events thus far Previous studies have defined them as a group rather than have included 9/11, the 2004 Southeast Asian tsunami, Hurricane exploring their diversity. We understand that they are far from Katrina, the 2008 Sichuan (China) earthquake, the Facebook a monolithic bloc. revolution and the Great Recession. Think about it: Millennials encompass a group that ranges vastly in Our journey of discovery included interviews with 3,100 Millennials age. Consider the fact that the first of them turned 30 this year and from eight countries – Brazil, Canada, China, Germany, India, in the U.S., the average age of a new mom is 25. This generation 3

represents a range of life stages and milestones: from adolescence global benchmark, the conversation is continuing even to adulthood; from high school to college or the workforce; from as you read this in an online insights community we call 8095 single to married to parents or, for an increasing number, just single. Live. In this active, diverse group of Millennials, we can talk in real- We actually thought this was good news. It means that starting here, time about breaking news, trends and product launches. Here weAn ongoing dialogue will also track how Millennials change their opinions through life with Millennials starting now, we will lead the charge to get to know and understand Millennials in a way no one else has. The 8095 Exchange is just stages and milestones – and what that could mean for long-term 8095 Live is an online brand relationships. insights community of 500 the beginning of an ongoing exploration of who they are, what theyU.S. Millennials, representing aspire to, why they act as they do, and how to reach and connect What you will find in these pages are discoveries, observations a range of segments, who with them. and revelations; what you won’t find are sweeping generalizations. provide real-time opinions After all, while Millennials share many traits and behaviors, theyand insights. Here brands can This paper, The 8095 Exchange, reflects a conversation with them about their relationships with brands, their attitudes and are more diverse ethnically, economically, and socially than any track shifts in perception in the midst of breaking news, perceptions on how companies try to reach and engage them, and other generation in history. They are more connected with a sensecompetitive environments and how they prefer to connect and influence each other on products, of global network and perspective. They have instant access to one life stage advancements. causes and trends. another and to information. They are aware of and believe in their own voice and power. The idea is to use what we’ve learned here to set a benchmark of sorts, a starting place from which we can learn more as they They are, in a word, different than the rest of us. Want to know how continue to evolve and their influence continues to grow. From this different? Read on. With Millennials, we have to let go a lot. As a brand, I think we were a company, among others, who felt that tight control of the brand and saying what our voice is was crucial up until probably a couple of years ago. We’re essentially a brand now that is based on co-creation, self-expression and originality. Our Millennial customers are a big part of that. -- Michael Perman, Senior Director of Global Marketing, Levi Strauss* *Levis Strauss is an Edelman Client 4

Brand relationshipsas a form ofself-expression

Our 8095 respondents reflected a strong sense of brand awareness and loyalty.This research suggests a link between the immersive, symbiotic relationshipMillennials have with social networking channels and the likelihood to define theirpersonal brand by aligning with the brands they favor.Eight-six percent of Millennials are willing to share information about their brandpreferences online, making it a top personal identifier.Brand loyalty among them is strong overall. Seventy percent feel that oncethey find a company or product they like, they keep coming back. And the morethe brand fits into their lifestyle, the more inclined they are to gain personal WILL SHARE THEIRidentification with that brand. But after a badWILL SHARE THEIR most THEIR experience with a brand, SHARE WILL BRAND PREFERENCEMillennials say it’s extremely difficult to win them back. In fact, 14 percentPREFERENCE BRAND PREFERENCE BRAND of ONLINE ONLINEMillennials in the UK say definitively that once a brand has lost their trust and ONLINE 86%respect, the brand can never regain it back. WILL SHARE THEIR 86% WILL SHARE THEIR 86% BRAND PREFERENCE BRAND PREFERENCE ONLINE ONLINEBrand preference ranks with religion and GLOBAL AVERAGE 86% GLOBAL AVERAGE 86% GLOBAL AVERAGEethnicity as a top personal identifier online. BRAZIL CANADA BRAZIL CANADA 81% 82% BRAZIL CANADA GLOBAL AVERAGE GLOBAL AVERAGE 81% 81% 82% 82% WILL SHARE THEIR BRAZIL BRAZIL CANADA CANADA CHINA CHINA GERMANY GERMANY BRAND PREFERENCE 81% 82% 81% 81% 82% 90% 90% CHINA GERMANY ONLINE 81% 90% 81% 86% CHINA GERMANY INDIA ITALY CHINA GERMANY INDIA ITALY 90% 81% 90% 90% 81% 87% 87% INDIA ITALY 90% 87% 90% GLOBAL AVERAGE INDIA ITALY UK USA INDIA ITALY UK USA 87% 87% 90% 90% 90% 90% 86% 86% UK USA BRAZIL CANADA 81% 82% 86% 90% UK USA UK USA 86% 86% 90% 90% CHINA GERMANY 6

Millennials and brand trust Expressing support for a brand, especially when it’s respect: in that regard, 30 percent cared more aboutBrand loyalty is strong a personal statement, can be precarious, so nothing product quality and 20 percent the range of productsfor Millennials overall. matters more to Millennials than authenticity, offered. One in three said they looked for brands to integrity, and an ability to deliver. It all comes down make a positive impact on the world. One in five said it to trust and brands must recognize that the 2010 was important that brands helped them achieve their version of trust is much more dynamic than in years personal goals. past. It’s deeper and more intense, but the greater More than half of our 8095 respondents are willing ONCE I FIND A COMPANY availability of information can also destroy it faster. to share more information about themselves with a OR PRODUCT I LIKE, As a result, a company’s reputation can matter as trusted brand in exchange for greater access or more I KEEP COMING BACK much as the performance of its products. While relevant content such as coupons, free samples, and 30 percent of Millennials cited product quality and sneak peeks at new products. 70% GLOBAL AVERAGE reliability as the factors that led them to trust and respect a brand, nearly one-quarter indicated that they would lose respect for a company because of concerns about its operating practices or services. This type of sharing has limits. A majority of Millennials weren’t likely to share their personal phone numbers or addresses online, and at least 4 in 10 are not willing to share incomes, the name of their Furthermore, nearly one in five Millennials in the UK indicated that they would lose respect for a company BRAZIL CANADA because of its treatment of employees. 65% 69% Purchase and affiliation as self-expression CHINA GERMANY A Pew Research survey found that 34 percent of Millennials bought a certain product or service they 72% 62% like because of the social or political values of the company that provides it. The converse was also true: an equal number will not buy for the same reasons. INDIA ITALY When a Millennial loses trust or respect in a brand, 73% 74% the majority will tell their family and friends not to purchase the company’s products. UK USA While 55 percent of respondents said that price was the most important attribute in making purchasing 67% 80% decisions, Millennials told us that price was the least important factor in building a brand’s trust and 7

Some brands help me to create my image. SomeSix in ten Millennials will share help me to gainmore personal information knowledge. Anywith trusted brands. of the brands that I prefer play a role in my achievements, WILLING TO SHARE MORE PERSONAL INFORMATION though this role is WITH TRUSTED BRANDS MORE WILLING TO SHARE supporting. PERSONAL INFORMATION WITH TRUSTED BRANDS 58% - Female, 21, Russia 58% GLOBAL AVERAGE AVERAGE GLOBAL employer or even their photos online. Pew Research revealed that BRAZIL CANADA CHINA GERMANYBRAZIL CANADA CHINA GERMANY Millennials believe “you can’t be too careful with the people you deal 62% 47% 62% 38% with,” and just 28 percent feel that most people can be trusted.62% INDIA 47% ITALY 62% UK 38%A 2010 Pewadults tofoundstepspeople aged 18 from accessinglikely USA than older survey take that to limit others to 29 are more theirINDIA 58% 55% ITALY 46% UK 64% USA personal information online. Study results showed that 44 percent of younger adults try to protect their information, compared to58% MEN 55% WOMEN 46% DADS 64% MOMS 33 percent of users between 30 and 49, and 25 percent of those between 50 and 64. Seventy-one percent of younger social 57% 60% 72% 69% network users have changed the privacy settings on their profilesMEN WOMEN DADS MOMS to limit what is shared with others, while only 55 percent of social STUDENTS EMPLOYED networkers between the ages of 50 and 64 have changed their57%57% 71% 72% 60% 69% default settings.STUDENTS EMPLOYED 8

MILLENNIAL MOM, 29Dallas, TX, USABorn 1981, Married, one childPart-time educatorActive on: FacebookFavorite websites, newspapers, magazines or TV shows:Starfall.com, babycenter.com, mamapedia.com, Parenting(The Early Years), Baby Talk, In Style, Mad Men, GossipGirl, ParenthoodWhat, if any role, do you think brands play in helping you achieve yourpersonal goals? Currently, I feel that brands I pay most attention to arethose that impact my daughter. This current generation is very focusedon providing safe, organic alternatives for the well-being of futuregenerations, as well as our planet.Who do you trust most for brand and product recommendations?Friends that have utilized particular products, bloggers that documenttheir experience with products, and consumers who write reviews on-line about the products.Why do you trust them? Because they have already had personalexperience with the product or brand of interest.What’s the one misconception that you think companies have aboutyou and other moms your age? I think some companies assume thatby stamping the word “natural” on a product, mothers will assumethat it is organic and not bother reading what the product is made of.Unfortunately, although I do believe there are definitely many people thatwould unknowingly do so, there is a growing segment of the populationthat now knows better.What advice can you share with companies who want to trulyreach you and your friends? A mother’s top concern is alwaysregarding safety. 9

Information isA Key to Influence

Millennials are subjected to a massive flow of information, and each piece hasthe potential to influence how they make their purchasing decisions. Many of 1 in 5them have become active contributors to the volume of information about brandsthrough blogs, product reviews and online forums. Millennials have postedAdopting new technology has become a way of life for many Millennials. As MikeWalsh described in Futuretainment, “They are not trying to change the world; they a video of themselves online.have simply never known any other.” In fact, 74 percent of Millennials believe thatnew technology makes their lives easier, with more than half saying that it helpsthem be closer with their friends.The constant flow of data feeds Millennials’ thoughts and conversations. Sixty-fivepercent of respondents told us they are disconnected for one hour or less each day.So what distinguishes the truly distinctive and influential sources of informationfrom the background noise? The answer is the key to making inroads with thisperpetually evolving group.Millennials seek information beyondtheir peer networkWhile social networks, sharing and collaboration all empower Millennials to makepersonal decisions, our research found that they often extend well beyond theirpeer network to glean information, opinions and knowledge.Pew data shows that 75 percent have created a profile on a social networkingsite, with 55 percent visiting those sites at least once a day. More than 60 percentconnect to the Internet wirelessly when they are away from work or home and 88percent text each other.65% of Millennials aredisconnected one houror less per day. 11

ng life decisions which of themation sources do you reach out to in Friends and family are theur decision? of information top sources Millennials seek in making major decisions. Millennials look for more 77 % FAMILY information about a product an average of 64 % FRIENDS 7.4 times per month; 21 % SEARCH ENGINE Millennial moms led the 21 % EXPERT WEBSITE way, seeking additional 20 % CO-WORKER information 9.2 times per month. 13 % SOCIAL NETWORKS 8 % NOBODY, I DO IT ALONE 2 % OTHER Eighty-seven percent of Millennials indicated that they consult This eruption in available data points means that brand-marketing at least one to three information sources before selecting new efforts make up an increasingly small sliver of available information. technology such as mobile phones, with 31 percent consulting Rather than relying solely on sanctioned marketing and product seven or more sources. When choosing which brand of product information, Millennials can tap the whole world of data—not just or service to buy, that total dipped slightly to 86 percent. a pithy catchphrase or celebrity endorsement—to form opinions about brands. 12

Information empowers actionand influence CONSULT 4 OR MOREAs Gen Buy noted, the “democratization” of SOURCES WHEN CHOOSINGinformation and opinion enabled by the Web has WHICH PRODUCT ORled Millennials to be more self-reliant in making SERVICE TO PURCHASEpurchasing decisions. Our research clearly supportsthe notion that Millennials educate themselves onbrands with information from a variety of channels.The majority of 8095 respondents use up to sixsources of information to help make their finaldecisions on everything from clothes and electronics 51% GLOBAL AVERAGEto grooming products.These trends have far-reaching implications. With somany potential sources of influence—from family and BRAZIL CANADAfriends to online peer groups, social communities andvast arrays of product information—how can brandsensure that they are part of the conversation when 56% 51%it matters?Similarly, since Millennials have increased access to CHINA GERMANYproduct information, brands will have to find differentways to communicate with them, both directly andindirectly through their colleagues and influencers 58% 48%who transcend personal networks. INDIA ITALY “The same tried and true ways of marketing do not 55% 56% hold. The old playbook is UK USA out. We need to understand where we can fit into 47% 42% (Millennials’) lives.” Kirsten Lynch, CMO, Quaker* StrategyOne/Edelman *Quaker is an Edelman Client 13

FULL TIME STUDENT, 20Tokyo, JAPAN Born 1990, Single Full-time employed/Full-time graduate student Active on: Facebook, Twitter Favorite websites, newspapers, magazines or TV shows: Twitter and a Japanese historical TV drama, Ryomaden (NHK)What is a brand? I think a brand is a perception of consumers over a company or aproduct/product group. It is something that becomes complete only when consumersrecognize it and evaluate it. Even if a company plans to create a specific brand, thatbrand cannot be established unless consumer agrees/perceives in that way. For acompany, a brand is company’s identity and pride.What’s the one misconception you think companies have about you and other studentsyour age? My generation is typically called a “Yutori-sedai.” It is a name to call mygeneration who went through a period when the government reduced the mandatoryeducational hour around 2000. However, the government quickly reverted back tothe previous required hours due to the evaluation that people did not get sufficienteducation. People, in general, say that my generation is “Yarukinai,” that is, we do nothave a sense of “achievement” or “Atsukunai,” we do not have passion.” I think we havepassion, it is just that we have much more options in our lives that our attention andinterests are diversified. I think my generation is a “diversification generation.”What advice can you share with companies who want to truly reach you and your friends?Do not persuade consumers of my generation with explanations such as: ‘Having this/owning this shows your status’ or ‘owning this is a must.’What is the biggest concern for you and your friends? Employment. Overly frustratedto get a job. In Japan, people start becoming serious about “employment” from thewinter of their third year at college. I think the pressure is coming down to first/secondyear people lately. 14

Taking action is a core value

With a group as diverse as Millennials, action can take many engaged, complex because, as a result of extended exposure to different forms, but the nearly ever-present connection to their brands and marketing, they can be very sophisticated consumers. peers plays a pivotal role. From joining online communities A Mintel study reported that Millennials “have more involvement sponsored by brands to viewing and recommending videos or news in pop culture and activities that would compel them to try new stories, action has moved beyond commerce to become part of the products and services and recommend them to friends.” The looming very fabric of social interaction and living. question for companies then is how to develop the right tools and This connection makes Millennials an extremely desirable but strategies to reach Millennials—not just to sell products, but to complex group: desirable because they spend so much time inspire action.Nine-in-ten 8095 Live respondentstake action weekly on behalf of a brand. 16

An array of actions for preferred brands Eighty-two percent of Millennials have joined aA majority of Millennials have brand-sponsored online community. Nearly half (47joined multiple brand-sponsored percent) have joined more than three. Chinese andonline communities. U.S. respondents were the most likely to engage in this activity, while German and Italian members were less active. Beyond the social aspects of online groups, studies PERCENTAGE WHO HAVE suggest that Millennials expect to be rewarded for JOINED SEVEN OR MORE their loyalty and engagement. Recent Facebook BRAND-SPONSORED research found that 42 percent of its members ONLINE COMMUNITIES fan pages in search of insider tips or information. 25% Clearly, companies have the opportunity to create a strong presence among Millennials—if they can craft compelling offerings and invitations to reward their GLOBAL AVERAGE followers. Nearly 70 percent of Millennials indicated that they BRAZIL CANADA 24% 28% recommend their favorite brands to family or friends. A significant number, 47 percent, write about good Nearly 20% experiences online, with respondents from Brazil and China the most likely to take the time to do so. Yet, of 8095 Live respondents have attended a brand- CHINA GERMANY negative brand experiences also spark this kind of 14% 26% action, with nearly 40 percent of respondents saying sponsored event in the they have criticized a brand on a social network. INDIA ITALY Moreover, a total of 57 percent—and 70 percent in last 30 days. Of those who 25% 38% the United States—said they would volunteer to try attended, more than UK USA new products, with those willing to create a video and post it online or write an online review close behind. 65% purchased a 27% 15% What factors should companies focus on to persuade product that was MEN WOMEN DADS Millennials to try their brands? Our research featured at the event. 27% 20% 30% provides some insight. Millennials said they would EMPLOYED consider trying brands based on offerings such as MOMS STUDENTS discounts and free products (36 percent), additional 21% 26% 24% information about the product (26 percent), tools StrategyOne/Edelman 17

and resources to improve other aspects of their lives (18 percent), and access toexclusive events and unique brand experiences (14 percent).While discounts and free products would seem to be an obvious draw, nearly Though they lean toward positiveone in five Millennials would consider switching to a brand that plays an activecatalyst role in their life. In China, this was the number one reason why Millennials reviews, good or bad, morewould switch brands. Our respondents also exhibited a growing desire to support Millennials will write about theirenvironmental causes and local vendors. Four of ten Millennials indicated that theywould buy products that are made or grown locally, even if those goods are brand experiences online.more expensive.It’s worth noting that brand loyalty can rise and fall depending on life stage, andsince the age range of our sample encompasses so many important milestones,these fluctuations are more pronounced. While this dynamic can create challenges WRITE ABOUT POSITIVE WRITE ABOUT NEGATIVEfor brands, going forward we’ll also explore how companies can connect with EXPERIENCES WITH PRODUCTS EXPERIENCES WITH PRODUCTSMillennials when they are their most curious, open, and passionate to establish OR COMPANIES ONLINE OR COMPANIES ONLINEa relationship that endures across life stages. 47% 39%57% – 70% in GLOBAL AVERAGE GLOBAL AVERAGEthe U.S. – would BRAZIL CANADA BRAZIL CANADAvolunteer to try 57% 41% 44% 38%a new product CHINA GERMANY CHINA GERMANYfrom a trusted 60% 39% 53% 38%brand and mosttesters would post INDIA ITALY INDIA ITALYa review online 46% 49% 35% 42%to promote the UK USA UK USAexperience. 44% 35% 36% 29% 18

EMPLOYED STUDENT, 30Beijing, CHINA Born 1980, Single Full-time professional/Part-time university student Active on: Twitter, Tumblr Favorite websites, newspapers, magazines or TV shows: Gossip Girl, Heroes, Desperate HousewivesWhy do you trust friends for brand recommendations? Friends won’tcheat you. You can see how the brand influences their life and can judgewhether it suits me or not.Why do they trust you? I introduce brands in a neutral way, using mypositive experiences to impress them.How do you typically share experiences and preferences with them?Via social media chat and text. MSN or other tools to chat with them. Wedon’t really give direct advice but I will use my own experience and otherreference information.What advice can you share with companies who want to truly reachyou and your friends? Treat Chinese consumers the same way as inother countries. No discriminations. No cheating and be honest if youhave a quality problem. When you use social media to outreach to us,please pay attention to our conversations instead of feeding us withpropaganda information. Be innovative and creative.Will you post negative content online about a brand? Definitely yes. Iwill post the negative content online if the brand fails to provide qualityproducts. This will save more people from wasting money. 19

Reverberation is online,offline andincreasingly mobile

A company with a well-considered approach to building a brand that appeals toMillennials, establishing trust among consumers, and inspiring action from its most 74%loyal followers still faces a serious, ever-present challenge: how to harness the of our 8095 Liveenergy and influence of Millennials while avoiding the pitfalls inherent in engagingwith such a diverse group that communicates through rapidly evolving channels insights communityand technology. indicated that theyImagine, for instance, that a Millennial customer has a negative interaction with a had talked to acompany’s customer service. Instead of escalating the issue to a supervisor, thecustomer texts five friends to tell them of the incident. The friends in turn share the friend about astory with their peer group, and a single event has quickly been spread to dozens ofpeople. For good measure, the customer also vents on Facebook. Friends comment favorite brand inon the incident and share their own stories of bad service. the past week, and 54% had talked to a friend about a Within the past 30 days, 8095 Live product they don’t like. respondents have recommended within the lastor family member that a friend 30 days, 8095 respondents have As another example let’s say a Millennial is cooking dinner at home and tries a new purchase a specific product in recommended... recipe with a specific brand of tomato sauce and sends a round of excited texts the following categories: inviting friends to stop by to taste the amazing dish. The tasters send their own rounds of texts praising the dish and following the recipe to the letter. Welcome to reverberation—the impact that Millennials can have on brands by communicating with their extended peer groups in real time. FOOD 54% Reverberation is a more recent phenomenon, enabled and fueled by technology ELECTRONICS 39% and how it’s altering peer interaction. Our research revealed that 76 percent of PERSONAL CARE PRODUCTS 37% Millennials believe they are highly depended on for their opinions among friends CLOTHING 35% and family. BEAUTY PRODUCTS 35% And they’re not just talking about their phones and laptops. When asked what CLEANING PRODUCTS 24% products they tend to share with friends, replies from our 8095 Live insights COOKING PRODUCTS 19% community were wide ranging: 32 percent electronics, 19 percent personal care products such as toothpaste and deodorant, 15 percent food, 8 percent clothing, PET PRODUCTS 19% 5 percent cookware, 4 percent personal beauty such as cologne or makeup, and OTHER 13% 4 percent housewares, furniture, or décor. 21

62% of Millennials connect to the Internet It’s no longer just about online and offline— mobile is its own subculture. wirelessly when An important element of reverberation is the nearly constant they are away connection that Millennials have with their peer group. from work or Social media has garnered the bulk of the attention, as companies craft integrated marketing campaigns that seek to tap into this home, and active, expansive network. But beyond social media lies the 88% text uncharted territory of personal communication via text messages and BBM*: it’s instantaneous, potentially global, and currently each other. totally below the radar. Pew Research This form of communication has become a subculture in its ownFocus on making an excellent product. If you do so, right, with the ability to inspire action and in the process boost orthen all of your marketing will be true and most of the destroy a brand on its own. Incidents that are communicated outside of traditional media channels, riding at breakneck speed on themarketing will be done by us. We are all looking for backs of text messages and Facebook posts sent from smartphones,great products and brands to share with our friends. can build a brand or do lasting damage.The best way to help us spread the word is by first The speed at which a brand can gain or lose trust is increasinglycreating a great product.” more rapid, aided by the ease of spreading news and ideas through text messages. Mobile devices have become like an appendage, -Male, 29, US texting is a driving word-of-mouth force. Since there’s no longer a delay between a thought or experience and the ability to communicate it, anyone who has an opinion is able to voice it instantly. And, unlike most digital interactions, mobile- platform conversations are private and untrackable, yet even more personal and powerful. *RIM is an Edelman Client 22

Shopping A more extensive network of friends is a social The innovative ways that Millennials communicate with one another has altered experience the makeup of their peer groups—as well as what they expect from their friends. Mindshare’s 2009 poll of 18- to 24-year-olds in the United States found that 51 for Millennials percent agreed with the statement that “social networking sites like Facebook are where brand diluting the quality of relationships.” While some have responded by curbing the recommendations time they spend on social networking sites, these defections pale in comparison to the growth in new users. happen in real-time. Our research found that, on average, Millennials have twice as many core friends An 8095 Live survey online as they do offline. When asked what they typically depend on their friends found that nearly for, our respondents selected general advice, entertainment, and encouragement, all at around 60 percent; perspective on life was significantly lower, at just two-thirds go to the 37 percent. store for groceries, Only 35 percent indicated that they seek camaraderie from their peer group, electronics and perhaps highlighting the limits of online friendships. Around 60 percent of respondents—and more than 80 percent of Chinese participants—said that they clothing with would make a purchasing decision or life choice that their friends didn’t approve someone else. of. Yet, globally, 36 percent of respondents said that they would not likely make a purchase that their friends don’t approve, showing the incredible complexity of the new influence dynamic. What is your first source of information on customer service? My first source of information for customer service is When seeking customer service on a product COMPANY WEBSITE 50% issue, less than one percent of 8095ers SEARCH ENGINE 46%When seeking customer service on a product STORE LOCATION 45%issue, less than one percent of Millennials FRIENDS 30%would actually call customer service. FAMILY 22% SOCIAL NETWORKS 20% CALL CUSTOMER SERVICE < 1% 23

Avoiding the potential downside of reverberation However, loyalty can also pose real risks for companies that don’t deliver on their promises, and the impact is rarely easily contained or reversed. According to our research, once Millennials lose faith in a brand, it’s nearly impossible to win them back. Almost 40 percent of respondents revealed that they had written about bad experiences online, possibly representing a large percentage that had turned away from a brand but didn’t register their disappointment. In fact, fully 71 percent of our sample said they would express their negative feelings about brands in some way, In the past week, 36% from telling a friend not to purchase the brand and boycotting the company to posting a video online. of 8095 Live respondents have For companies, recognizing the impact of reverberation and the purchased a product that was factors that drive it is just the first step. Next, they must move beyond the framework of online and offline to include all modes of introduced to them by a friend. communication. To do so requires a deeper understanding of how specific segments of Millennials use them to interact—a topic we’ll explore in depth in our ongoing 8095 conversation.A greater emphasis on collaborationOur research indicates that Millennials have a strong commitment to When asked what makescollaboration and their choices, actions and brand preferences are them recommend products,amplified by sharing. Indeed, seven out of 10 depend on their friends one 8095 Live respondentto learn about new trends, achieve their personal goals, make life stated, “Quality of thedecisions and have a positive impact on the world. product and reputationConsequently, the transition from brand awareness to appreciationto active engagement can occur rapidly, as exposure to a brand of the company. Not thespawns a conversation that results in texting friends or “Liking” a kind of reputation wherepage on Facebook. they are hip and they’reIf they are having a customer service issue with a brand, one-third so cool and so I mustof Millennials will turn to their friends for support as their firstcourse of action. One in five will turn to their family and one in five purchase their products,will turn to their social networks for help. Less than one percent but companies that have aof the respondents in our survey said they would actually take the long history of caring fortraditional means of calling customer support. their customers.” 24

GRAD STUDENT, 26Chicago, ILLINOISBorn 1984, SingleFull-time employed/Full-time graduate studentActive on: Facebook, Twitter, Flavors.meFavorite websites, newspapers, magazines or TV shows:The Economist, The Onion, Slate.com, Theoatmeal.com,Xkcd.com, DexterWho do you trust for brand recommendations? Friends and familywhose tastes I know match mine, and whose view on life and moralityis similar to mine.How do you discover and research new brands and products? Usuallyword of mouth and social media. Also at work and through trustworthynews sources.How do you typically give them advice on brands? As it comes up inconversation. We also discuss via text, email or social media.What’s the one misconception that you think companies have aboutyou and other graduate students your age? That we are ADD internetjunkies who need everything handed to us in 140 characters or less.While this might be true for some, many of us still want thoughtful,thorough content and will take the time to read/watch something ifit’s meaningful.What advice can you share with companies who want to truly reachyou and your friends? Take the time to engage your audience: Don’t justpush your message, but listen as well. Social media channels make this alot easier, and they’re oftentimes misused and underused by companies.Prompt a response, discussion, and relate your company to someone’slife—don’t be afraid to step outside of your specific product and go forthe bigger message to which your audience can relate and participate. 25

Not an end,a beginning to the Exchange

Millennials have come of age alongside technology and have Research shows that Millennials are open to new experiencesabsorbed it into their lives. Their relationship with technology and new brands. They are excited by interacting with brands andhas completely changed their relationship with brands and interested in building relationships with them. They have theservices. In fact, like the Baby Boomers several generations before confidence to stand up for what they believe but also the confidence,them, Millennials have upended what had become the traditional technology and network to voice their opinions when they feelmarketing model and now marketers are playing catch up, trying to they’ve been mistreated. With Millennials, brands know where theyunderstand who they are, what they want, how to reach them, how stand (sometimes minute-to-minute).to satisfy them. The 8095 Exchange isn’t the end of a conversation, but theBrand loyal in a way that brands and services crave, yet with a beginning. We still have much to learn. But what we do know, whatwhat-have-you-done-for-me-lately attitude they fear, Millennials you’ve just read in these pages, is that the future is here. Brands andare forcing marketers to reconsider everything. What used to be a marketers who continue to live in the present (let alone in the past)one-way conversation (which isn’t much of a conversation at all) is will miss out on opportunities that are just too good to pass up.now a multifaceted, 24-hours-a-day, seven-days-a-week dialogue All of this means that this new world – one in which Millennials playbetween brands and their customers, between their customers a central role – is rife with extraordinary opportunity. Marketersand those customers’ entire circles of friends and families. And and brands that understand who Millennials are, how they behave,that’s dicey, too, given the different types of relationships research what they want and how they communicate, will be able to thrivesuggests people have with everyday in-person friends and, and flourish.separately, online friends, who may number in the tens ofthousands for an especially popular Twitterer. The 8095 Exchange kicks off an ongoing conversation about the future of brands and the people who will make or break them. TheseYet, the opportunity for brands is now more clearly defined. are exciting times, indeed. 27

Welcome To 8095 Live 8095 8095To build on our initial survey results, Edelman and StrategyOne created8095 Live, an online insights community where brands can have an 8095 8095 8095open dialogue with Millennials about their beliefs, connections,and perceptions. Made up of 500 U.S. Millennials, 8095 Live includes arepresentative sample of major segments, ages, life stages, locations, andethnicities. We are engaging with this group through weekly onlineconversations and have already begun to compile further insights,many of which have appeared in this paper. In an era where communicationchannels are multiplying and attitudes are constantlyevolving, research is more crucial than ever to shape marketing efforts.We believe 8095 Live presents a powerful tool to capture the thoughts and 8095 8095 8095insights necessary to formulate effective brand strategy. 28

REFERENCES “Facebook Teens,” Facebook Market Research, January 2010 “Gen Y Likes Talking About Brands,” Keller Fay Group, August 2007 “Marketing to Millennials,” Mintel Research, March 2010 Steve McClellan, “Is Facebook getting uncool for 18-24s?” AdWeek, November 16, 2009 “Millennials: A portrait of Generation Next,” Pew Research Center, February 2010 Riva Richmond, “A guide to Facebook’s new privacy policies,” New York Times, May 27, 2010 Mike Walsh, Futuretainment: Yesterday the World Changed, Now It’s Your Turn, London: Phaidon Press, 2009 Kit Yarrow and Jayne O’Donnell, Gen Buy: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail, San Francisco, CA: Jossey-Bass, 2009 The Center for Information & Research on Civic Learning and Engagement, Funded by Pew Charitable Trusts, “The 2006 civic and political health of the nation,” October 2006 Pew Research Center’s study on “Americans and Social Trust, Who, Where, Why,” February 2007 Pew Research Center’s study on “Millennials: Confident, Connected, Open to Change,” February 2010 Mindshare survey of 1,200 consumers about their social-networking habits, August 2009 www.edelman.com | www.strategyone.net Material may be used with credit given to Edelman/StrategyOne. 29

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