Millennials aren’t “kids” anymore. Now in their prime
working and spending years, consumers ages 18-34 are
the largest commercial demographic in US history,
accounting for more than 25% of the population and $1.3
trillion in annual purchasing power.
However, when it comes to actually spending that money,
Millennials have profoundly different priorities than older
generations.
This shift in priorities has created an entirely new type of
brand/consumer relationship, the repercussions of which
are shaking up the world of marketing.
2. The Experience Generation
Millennials aren’t “kids” anymore. Now in their prime
working and spending years, consumers ages 18-34 are
the largest commercial demographic in US history,
accounting for more than 25% of the population and $1.3
trillion in annual purchasing power.*
However, when it comes to actually spending that money,
Millennials have profoundly different priorities than older
generations:
• 78% would rather spend their money on “experiences”
vs. possessions.
• 70% say that Fear of Missing Out (FOMO) factors into
their purchasing decisions.
• The share of total US spend allocated to experiences
has grown 70% since the birth of the first Millennial.**
This shift in priorities has created an entirely new type of
brand/consumer relationship, the repercussions of which
are shaking up the world of marketing.
“Millennials are a lot more willing to shell out
money on experiences that enhance their
lives (and their Instagram and Snapchat
feeds) rather than on material things.”
-Ad Age | Consumers Want Experiences, Not
Things
*Goldman Sachs | Millennials Coming of Age
**Eventbrite | Millennials Fueling the Experience Economy
3. It Finally Happened
Economists have been predicting this shift for years,
but 2018 marks the moment when the ad industry
as a whole truly pivoted to align with the market
perspective of the Experience Generation.
Just last year:
• Brands doubled their investment in Instagram
Publishers*, pulling spend from traditional digital
channels to serve authentic, experience-based
content.
• Starbucks’ “Unicorn Frappucinno” campaign drove
the news cycle and boosted sales nationwide**
• Brands like Tinder and Dove Chocolate saw
massive exposure partnering with The Museum of
Ice Cream, which sold out all over the country***
• The Broad Museum’s Instagram-friendly “Infinity
Mirrors” exhibit sold out in minutes, and crashed
the museum’s website**** *emarketer.com | Influencer Marketing Doubled in 2017
**CNBC | Unicorn Frappuccino bumped up Starbucks' sales, more quirky drinks to come
***NY Magazine | The Millennial Walt Disney
****CBS | Art gets a new audience thanks to selfies
4. Important note: saying that Millennials
prioritize experiences obviously doesn’t mean
they only care about Burning Man and trips to
Belize.
Younger consumers still buy sneakers and soft
drinks, but the key takeaway for marketers is
to focus promotional efforts on the value of
sharable memories associated with a product,
rather than the material value of the product
itself.
For Millennials, the perceived social value of a
purchase often outweighs its material value.
What this Means for Marketers
Value prop for older generations
• Romantic atmosphere
• Excellent service
• Delicious food
“61% of Millennials say they’ve
participated in an experience just to
share it on social media.”
- Eventbrite | 5 New Trends Shaping the
Experience Economy
Value prop for Millennials
• #foodporn
Example: If you’re promoting a restaurant…
5. Case in Point: Starbucks’ Unicorn Frappuccino
In April of 2017, Starbucks released the
“Unicorn Frappuccino” as a marketing stunt
targeting Millennials.
With a taste that was widely criticized*, the
colorful beverage seemed better suited for
selfies than it was for drinking.
Nonetheless, young people across the country
flocked to Starbucks to document themselves
participating in the experience of downing the
neon-pink concoctions.
• The drink quickly sold out across the U.S.
• Same-store sales accelerated throughout
Q2**.
• Celebrities including Stephen Colbert, Katy
Perry, and Anthony Bourdain weighed in on
the drink.
Instagram results:
#unicornfrappuccino
152,425 posts
Youtube results:
“Unicorn Frappuccino”
288,000 videos
“The drink drove significant traffic
to chains during its limited run, as
well as brand awareness and
affinity.”
-Howard Schultz | CEO, Starbucks
*Buzzfeed | Starbucks Baristas Totally Hate The Unicorn Frappuccino And Are Losing It Online
**CNBC | Unicorn Frappuccino bumped up Starbucks' sales, more quirky drinks to come
6. An Ad-Proof Audience…
In addition to having a fundamentally different
relationship with brands, Millennials also have a unique
relationship with advertising and media in general.
The average Millennial sees 5,000 brand exposures
every day, far more than any generation in history, and
more a human can mentally process.
Of those 5,000 exposures, they are aware of only 86.*
As a result of this oversaturation, traditional ad
channels—print, broadcast, display, owned social
media—are becoming increasingly ineffective at
reaching Millennials:
• 64% of Millennials use adblockers**
• Fewer than 10% of Millennials read print
publications like newspapers***
• Millennials mostly watch TV on DVR or streaming
services, dodging ads with skip and fast forward.****
• Organic reach on Facebook has dropped by as much
as 52% since 2016, thanks mostly to recent
algorithm updates*****
*New York Times | Anywhere the Eye Can See, It’s Likely to See an Ad
**eMarketer.com | Most Millennials Have Installed AdBlockers
***Pew Research Center | Newspaper Readership by Age
****Re-code | Millennials Mostly Watch TV After it’s Aired
7. …that’s more responsive to ads?
Ironically, despite all the ways Millennials are
becoming inoculated to traditional advertising
channels, they are actually far more responsive to
advertising than older generations.
According to a 2017 survey*:
• 81% of Millennials said they made purchase in
response to an ad they saw.
• Only 57% of older generations said the same.
Why the discrepancy?
The explanation is simple—Millennials are being
served entirely different ads than older generations.
And the channels that favor Millennials (i.e.
Instagram), provide a superior end-user experience.
To address this insight, ad spend is shifting away
from traditional channels on an unprecedented
scale.
*Clutch | 2017 Advertising Survey
Millennials Older Generations
Made a Purchase in Response to an
Ad in 2017
81% 57%
8. The Industry’s Response: Shifting to Instagram
Coming into 2018, with other ad channels either
flatlining or seeing diminishing returns, Instagram
is seeing a major spike in brand activity.
• The # of monthly Instagram posts doubled
between 2016 and 2017*
• More than 70% of US businesses are now
active on Instagram*
• Users average between 25-40 minutes a day
looking at Instagram posts**
• Ad recall for Instagram is 3x the norm for
traditional digital advertising***
• Average Instagram engagement is 10x higher
than Facebook, and 50x higher than display
ads****
*eMarketer.com | US Businesses using Twitter and Instagram for
Marketing Purposes
**Instagram.com
***Nielsen Brand Effect
****National Geographic | How Instagram is Changing Travel
9. Direct, Native Instagram Posts:
User-centric social media
While organic and paid Instagram placements remain effective
tactics in their own right, the most exciting frontier for brands
is to coordinate direct, native placement with Instagram
publishers and influencers.
Benefits of direct native placement with Instagram publishers:
• Highly-relevant
Your audience isn’t being “targeted” – they’ve chosen to
see this content in their feed because they want to.
• Highly engaging
On average, 4.3% of impressions generate a like.
Compare that to the .2% engagement seen on Facebook,
or the .02% CTR of display campaigns
• Non-disruptive
Unlike paid Instagram ads, native Instagram posts don’t
disrupt the user experience – they are the user
experience.
10. Sources
• *Clutch | 2017 Advertising Survey
• emarketer.com | Influencer Marketing Doubled in 2017
• NY Magazine | The Millennial Walt Disney
• CBS | Art gets a new audience thanks to selfies
• New York Times | Anywhere the Eye Can See, It’s Likely to See an Ad
• eMarketer.com | Most Millennials Have Installed AdBlockers
• Pew Research Center | Newspaper Readership by Age
• Re-code | Millennials Mostly Watch TV After it’s Aired
• Ad Age | Consumers Want Experiences, Not Things
• Eventbrite | 5 New Trends Shaping the Experience Economy
• Buzzfeed | Starbucks Baristas Totally Hate The Unicorn Frappuccino And Are Losing It Online
• CNBC | Unicorn Frappuccino bumped up Starbucks' sales, more quirky drinks to come
• eMarketer.com | US Businesses using Twitter and Instagram for Marketing Purposes
• Instagram.com
• Nielsen Brand Effect
• National Geographic | How Instagram is Changing Travel
• Goldman Sachs | Millennials Coming of Age
• Eventbrite | Millennials Fueling the Experience Economy