Colloquy: dentro de la mente del del animal consumidor mas elusivo: los Teenagers

Los emails, MySpace, Second Life, YouTube: Si uno cree que estar familiarizado con estos canales sociales y de comunicación, alcanza para ser conocedor del marketing de jóvenes, entonces uno y esta pasado de moda. Colloquy de este mes hace un intento de entender la lirica y los movimientos de esta danza, y que ayudará a los marketineros de lealtad focalizarse en este segmento tan elusivo, incluso, al momento de leer este documento, ya puede estar pasado de moda.




In July 2006, retail behemoth Wal-Mart launched a social-networking web site called The Hub. Aimed squarely at the MySpace generation, The Hub purported to be an "online destination" where clean-cut, non-threatening teenagers could hang out, post online profiles, network with other teens and—cue vinyl-record-scratching sound effect here—rave about Wal-Mart’s cool clothes, electronics and back-to-school products. One post read: "I’ll school my way by looking hot in my Wal-Mart clothes…to catch a cute boy’s eye." Woot, Wal-Mart pwnzs Target!

Teens who stumbled upon The Hub found images of teen "Hubsters" who looked suspiciously like models, and encountered Big Brother as Wal-Mart deleted objectionable posts and negative comments. The whole enterprise had a vaguely creepy vibe, as if Wal-Mart were a 45-year-old man hanging out in teen chat rooms. Teens ignored The Hub, but the marketing community had a field day. The Consumerist blog pronounced The Hub "a joke." Ad Age described the site as "highly sanitized and controlled." The New York Times said it "tries too hard to be hip." The Hub soon became the poster child for marketing middle-age crisis, and by October 2006, it was gone.

"I think Wal-Mart did it badly," said retail consultant George Whalin on his blog. "There’s nothing worse than a 50-year-old trying to be a 15-year-old. Get over it."

Given the difficulty in targeting this most elusive of demographic segments, Wal-Mart’s desperate attempt to lure teens into a bogus Web 2.0 lair is understandable. Teens may possess less raw purchasing power than other segments, but they wield enormous cultural influence. Understanding and anticipating their behavior is critical for marketers. Fortunately, no marketers are more equipped to do so than those who use customer data to build value-added relationships with Generation Text. Give them the tools to engage with you, and they can become your most powerful marketing ally.

Smells like teen myths
Viewed in raw numbers, the teen market is declining in influence. According to the U.S. Census Bureau, citizens ages 12 to 18 will total 29.57 million in 2008, representing 9.74 percent of the population. According to projections, the teen market will bottom out by 2015 at 8.9 percent of the population.

Meanwhile, a Mintel International Group study estimates that teens spent $153 billion in 2006— a big number, but teen spending actually declined 12 percent from 2003 to 2006. Statistics provided by the Newspaper Association of America (NAA) trace most of this decline to higher fuel prices, which vacuum dollars out of older teens’ wallets, and restricted access to their parents’ bank accounts—while 27 percent of teens earn money from part-time employment, a full 60 percent supplement their income by shaking down Mom and Dad. On the plus side, NAA reports that teens spend an average of $107 a week, with 40 percent planning to spend more next year.

So if the news on teen spending is mixed, why are marketers so consumed with capturing their attention? Call it Fear of a Gray Planet. With the first Baby Boomers now reaching retirement age, retailers face the inexorable slowdown of the Boomer economy. Those marketers who can build relationships with the next generation of consumers will enjoy a decided advantage.

"Years ago, companies were much less concerned about portraying a youthful brand image," says Jeff Roach, Vice President of Marketing Strategy of Youthography, a Toronto-based marketing consultancy. "Marketers now are looking ahead to the next ten years and seeing their customer base aging, so they’re turning in the other direction."

Building that youthful image is trickier than it sounds. The teen market is easy to stereotype, but for every generalization that proves out, another one is revealed as myth. Here’s a look at some common misconceptions versus reality:

Teens follow the crowd. That teens regale each other with tips about the latest hot brands, there is no doubt; a 2007 Kay Feller Group survey revealed that teenagers hold an average of 145 brand conversations every week; 58 percent of those conversations are positive. To enjoy the benefit of all this word-of-mouth, however, you have to strike quickly. Viacom’s "Teen + Brands" survey includes these eye-opening statistics: 25 percent of teens surveyed switch brands if they become too popular; 19 percent switch out of boredom. In the social networking space, for example, MySpace still leads in raw traffic with a U.S. audience of 72 million, but Facebook, at less than half of MySpace’s audience, now has the buzz.

"Teens often have a negative opinion about [MySpace]," writes UC Berkeley doctoral candidate Danah Boyd on her blog apophenia. "They see it as gaudy, immature, and ’so middle school.’"

"Young people have the tools to get the word out quickly about what they like and don’t like," says Matt Britton, Chief of Brand Development of the New York, NY-based Mr. Youth marketing agency. "The consumer is defining what our brand is all about; it’s not our choice anymore."

Email is the way to reach teens. The current viral marketing craze is predicated on the willingness of wired teenagers to forward to each other the latest YouTube videos and links to web sites loaded with adver-games and other viral gewgaws. But here’s the sad truth: for today’s teens, email is something their parents use. A 2005 Pew Internet and American Life Project report found that even two years ago—ancient history for youth marketers—teenagers preferred instant and cell-phone text messaging for connecting with peers. They used email to communicate with "old people." In 2006, ComScore reported that teen email use declined 8 percent.

In other words, email is for squares. Feel old yet?

"Email is not gone, but it is dead in the sense that it is no longer a site of deep emotional passion," says Boyd. "People still have accounts, but their place for sociable communication is elsewhere."

OK, then we’ll reach them through SMS. If email is yesterday’s news, then the conventional wisdom views SMS as the next frontier. Teens text more than any other demographic; according to the Mobile Marketing Association, teens send and receive more than 50 text messages per week, making SMS "an effective tool for mobile marketing campaigns."

Not so fast. SMS marketing may represent opportunity, but beware the backlash. A 2006 Harris Interactive survey revealed that half of teens dislike receiving advertisements via cell phones, while only 4 percent approve. Forrester Research also wrote: "Not only [are] teens resistant to push-promotion on their cell phones, this risks interrupting teens’ interactions with each other." You’re not fulfilling a need; you’re eroding one.

So how do you market to teens if they won’t open emails and hate SMS ads? Just like you market to any other segment—allow the customer to choose the channel. Fullerton, CA-based Subcat Marketing has designed campaigns offering checking and savings accounts to teens—and made the biggest impact with good old-fashioned direct mail.

"We’ve seen that email campaigns to this group traditionally have low success rates," says James Flores, President of Subcat Marketing. "But teenagers don’t receive that much regular mail. When we send along a postcard or other direct mail, we find that they pay attention."

Teens are a self-contained segment. Marketers often assume that once teens hit the magic age of 21, the high school set ceases to matter to them. But teens exert tremendous influence on older age groups—including their parents. Public relations behemoth Burson-Marsteller calls these teenaged influencers the "Youth-fluentials." As a group, they exert some level of influence in up to 100 percent of their peers’ and up to 80 percent of their parents’ buying decisions.

"While Youth-fluentials hold a vast amount of influence over the spending decisions of their peers and family, the research shows that they’re also extremely impressionable," says Ame Wadler, Chief Strategic Officer for Burson-Marsteller. "They’re striving for independence and impact, but also are highly impacted by parents, educators and their own peers."

Youth culture drives the bus. Take the video game industry—according to the Entertainment Software Association, only 35% of gamers are teens; the average gamer is 30 years old. This cultural arrested adolescence has led PricewaterhouseCoopers to estimate that the gaming market will reach $48.9 billion by 2011. Teens may not dominate the gaming market with their wallets, but their influence determines the winners—not only in the console wars, but also in the broader marketplace. For evidence, take McDonald’s recent partnership with Nintendo to offer free wireless access for Nintendo DS gamers in over 6,000 McDonald’s restaurants.

"Young people who play games matter," said GameDAILY CEO Mark Friedler on his blog. "They are often taste makers, tech savvy influencers who have moved from the basement to the cultural mainstream. Think of them as the hip-hop fans of a few years ago. They get it, and their trends will be adopted. That’s why you must keep your finger on their pulse."

Teens are narcissists . For being stereotyped as solely concerned with self-gratification, teens stand alone. Indeed, a recent global survey of teens by Helsinki, Finland-based Sulake Corp. revealed a lot of bald self-interest in teens’ long-term goals: 47 percent said "Simply being happy, no matter what I do" was a worthy goal; 27 percent said "Having the career of my dreams"; 20 percent said "Being rich and/or famous."

But dig a little deeper and you’ll find altruistic and idealistic tendencies waiting to be tapped. Both MySpace and Facebook boast thousands of non-profit group profiles with hoards of teen supporters. A recent MTV poll found that over 80 percent of teens surveyed considered community service important. The desire to give also extends to teen wallets; Research firm Youth Trends estimates that during the 2007 holiday shopping season, teens plan to spend and average of $266 on gifts for family members, $210 for friends and loved ones, and only $158 on purchases for themselves.



Doing the Wave:
This graph tracks projected numbers of people within individual age groups
through 2020. The number of 18-yearolds, for instance, rises into 2008, but
like the other teen age groups, numbers decline into the decade that will
ironically be called "The ’Teens."




The privacy smackdown

Given the challenge in divining teen interests and the danger in relying on conventional wisdom, the way into the teen mindset is a familiar road for loyalty marketers: collect transactional, survey and third-party data, segment teen customers according to their behavior and create compelling, relevant offers delivered through preferred channels. No sweat, right?

Within the youth marketplace, however, data usage is a touchy area. The Child Online Privacy Protection Act (COPPA) bars data collection from the youngest portion of the tween and teen demographic without parental consent. Email pushes to these consumers are banned, though opt-on newsletters that contain marketing messages are not. Still, COPPA gives marketers the jitters.

"Privacy issues regarding data collection, emailing and text-message communications frighten companies—especially their legal departments," says Matt Britton.

And privacy watchdogs patrol the electronic halls. In November, 2007, the Federal Trade Commission held two days of hearings about the ways advertisers on MySpace and Facebook use personal data in their messaging. MySpace scans profile content for their "hypertargeting" platform that sells ads against keywords in a method similar to Google’s AdSense. In November, 2007, Facebook unveiled a more ambitious platform called Beacon, which allows partner companies to record Facebook users’ purchases and add the information to their news feeds. If you purchase a hot new pair of kicks on Zappos.com, for example, then Beacon alerts your network to their awesomeness and includes a small ad for Zappos in the feed. Advertisers can further segment Facebook users to reach exactly the audience they’re looking for.

The only problem—the original system was opt-out only, which required users to man a privacy dashboard to specify what purchases they were willing to make public. Technology blog GigaOm called Beacon "a privacy disaster waiting to happen." MoveOn.org even launched a Beacon protest group, which finally convinced Facebook to make the system opt-in.

If Facebook can alleviate privacy concerns, the company is poised to combine word-of-mouth and database marketing in a potential paradigm shift. Privacy concerns by a vocal minority may not reflect teen attitudes; a recent MySpace survey of 1,200 teens found that 20 percent added marketing content to their MySpace pages in the last month. Conversely, a majority don’t want ads appearing on their pages without permission. In return for lending their web space to marketers, teens expect incentives such as coupons, free games and videos.

In other words, teens are aware of, and demand, the traditional loyalty value exchange: I’ll give you information and space, and you give me free stuff. Anastasia Goodstein, editor of teen marketing blog ypulse.com and author of Totally Wired: What Teens and Tweens Are Really Doing Online, believes that this segment’s marketing savvy can improve companies’ ability to collect teen customer data. The trick is to make them partners in the process.

"When offering something of value, seek opt-in permission to get usable information," says Goodstein. "Because teens have been barraged with marketing messages, they will appreciate transparency and honesty about why you want the information and how you’re going to use it."

Party like a rock star
Good marketers are doing just that—reaching teens by offering recognition and reward and building real communities that employing them as partners in the process. Here are a few companies that have learned the music and lyrics that keep teen consumers engaged.

Habbo.com: While virtual worlds World of Warcraft and Second Life get all the buzz, Habbo.com has quietly grown into a teen-marketing behemoth. Launched in 2000, Habbo allows teens to create virtual avatars and take up residence in the Habbo Hotel, where they can mingle with other users in public spaces and outfit private rooms by purchasing furnishings with Habbo Coins—which have a real-world value of about $0.20 each. Users can form groups, play games, chat and watch in-world videos.

Since its launch, Habbo Hotels have opened in 31 countries with over 82 million avatars created worldwide, 6 million unique visitors per month and 75,000 new avatars created every day. The site is so successful, with estimated 2006 revenues of $77 million, that it could become the world’s first virtual loyalty coalition. Bronze and Gold Habbo Club members enjoy special access and such privileges as meet-and-greets with a virtual Ozzy Osbourne. Earn partners such as Target, CVS and GameStop allow users to earn additional coins. Major brands such as Nintendo and Axe deodorant sponsor public rooms and virtual events.

Habbo has even expanded into market research. In its 2006 Global Habbo Youth Survey, the company conducted an in-world survey of 42,000 teens in 22 countries on their real-world shopping habits and produced a report available to marketers for a mere $5,000. Some naysayers worry that Habbo’s reliance on self-reported profile data renders the survey suspect, but the project was so successful that the company plans to repeat it annually.

"We found we could gather this data in about a week," Emmi Kuusikko, director of user and market insight at Sulake (Habbo’s parent company), told Business Week. "It is extremely rewarding to carry out this quantitative research. The [teens] were so eager to participate. They were in their own environment, an environment they can trust."

Virgin Megastores: In the era of digital downloading, entertainment retailer Virgin Megastores has re-geared its marketing strategy to focus on building closer relationships with their core customers via their VIP loyalty program, now under pilot in select cities. The program itself is fairly standard: VIP members who spend at least $10 earn 1 VIP point per dollar; when members reach the 100-point threshold, Virgin auto-issues a $5 gift voucher. Members can also participate in exclusive sweepstakes and promotions. In a unique twist, the program uses a rewritable thermo-chromic membership card that can display points balances, instant wins and marketing messages on the card at the point of sale.

"The card is a portable points statement," says Dee Mc Laughlin, Vice President of Marketing of the Virgin Entertainment Group. "No mailing of statements or a large call center commitment is required. Our customers feel in control."

What will make Virgin feel in control is their ability to deliver incremental revenue through effective data analysis. Basket analysis will become an important part of the company’s marketing future.

"The technology allows us to segment customers by their purchases," says Mc Laughlin. "A film noir buff won’t get tickets to the premiere of a science fiction flick if there weren’t any science fiction movies in their shopping basket previously. The rewritable card allows us to customize to our locations, time of year and time of day; to change our offers constantly; and to instantly inform our customers of timely promotions."

Coca-Cola: Customer relationships are an ongoing challenge for packaged goods manufacturers—even for as storied a brand as Coca-Cola. The company has led the way in the consumer beverage industry with a loyalty platform designed to engage young consumers. Launched in 2006, MyCoke Rewards allows drinkers of Coca-Cola brands to enter bottle cap codes online or via text-message to earn points redeemable for music downloads, games, Coke-branded merchandise and sweepstakes entries for such teen-themed prizes as a signed bass from Pete Wentz of Fall Out Boy.

Building consumer relationships without selling direct is always a challenge. Still, Coca-Cola recognized the importance of a sound customer strategy, says Carol Kruse, Vice President of Global Interactive Marketing for Coca-Cola.

"Beverages purchases are typically low-interest," Kruse told COLLOQUY at the 2007 DMA annual convention. "But we’re also a low-margin business, which makes running a loyalty program a unique challenge. But we have a brand that consumers love, and we understood that the 80-20 rule applied to us. So we wanted to thank our loyal consumers for drinking our products, because we realize that they have a lot of beverage choices."

Today, MyCoke Rewards members enter an average of 1 million bottle cap codes a day on the program web site. Coca-Cola’s teen consumers hope to follow in the footsteps of 18 year-old Marc L. Miller, who entered a sweepstakes with only three bottle cap codes and won a 2007 Volvo XC90. On the business side, Coca-Cola has 400 data points on every MyCoke Rewards member and is diligently working to link program participation to increased beverage sales. The program success has allowed the company to evolve MyCoke.com into a virtual community—one that was relaunched in December, 2007, as CC Metro, a fully interactive 3D environment.

"We now have consumers spending 90 minutes on the web site, engaging with our brand and having a positive experience," says Kruse. "So we’ve taken the loyalty program concept and turned it into a communications platform."

You are the music in me
To avoid launching the next Wal-Mart style Hub, recall the words of French novelist Jean-Baptiste Alphonse Karr: Plus ça change, plus c’est la même chose—the more things change, the more they stay the same. The current generation of teenagers may be the most wired, over-texted, YouTubed and Facebooked generation in history, but don’t assume that the best way to reach them is by adopting the latest viral fad or hot technical platform. Teenagers are still teenagers. They don’t see their world as innovative; they see it as their world. For teens, technology and marketing trends are a means to an end. Like teenagers of every era, they want to self-actualize, feel connected, and enjoy their community of family and friends.

"Young people don’t adopt new and shiny gadgets just because they’re new and shiny," says Anastasia Goodstein. "You must understand how this generation is doing things that past generations have always done. Instead of only hanging out at the mall food court, they also hang out on MySpace or Facebook. They’re growing up more quickly, but their core developmental needs are the same as they’ve always been."