Lessons in youth marketing during a recession

June 9, 2009 at 8:24 pm Leave a comment

by Inyoung Hwang
May 05, 2009

WASHINGTON – Companies have felt the need in this recession to ramp up innovative advertising tactics when targeting young adults, a demographic that has been elusive to marketers in recent years.

The weakened consumer confidence and spending in the U.S. have affected an age-group previously thought to be more recession-resilient.

A survey by the advertising agency J. Walter Thompson Company found 77 percent of young adults, people 18-29, feel nervous and anxious about the impact of the recession. Teen spending on fashion also declined 14 percent over the last year, according to a report by the investment bank Piper Jaffray.

The challenge becomes twofold for companies as they combat an economic downturn, while trying to capture a new kind of savvy customers made up of teenagers and twenty-somethings living in the internet age.

“They’re not passive consumers of anything,” said Carol Phillips, a marketing professor at University of Notre Dame. “You have to kind of market with them rather than to them.”

Phillips described how, as a consumer group, young adults can be a “moving target” because of  the rapid changes in technology. An evolving relationship with technology leads to an entirely different relationship with marketing, she explained.

For marketers, young adults tend to be a more skeptical, team-oriented bunch, who are equipped with a sense of confidence that comes with the ease of finding information online. Even if an advertisement is backed by research or substantiated claims, young adults still assume it needs to be verified.

“They take everything with a definite grain of salt,” Phillips said. “They’re much more likely to rely on what their friends say or what they read in a third-party blog.”

Morris Levy, senior at the University of New Hampshire, said even if a new product like a video game sparked his interest, he would hold off on purchasing it until he understood it better.

“I’d look into it more – look at reviews online, ratings from different companies and news sources,” he said.

Gary Rudman, the president of GTR Consulting, a market research firm, said video game companies will sometimes provide free clips of games to websites like IGN Entertainment. It’s a simple but successful word-of-mouth strategy that allows young people to feel like they’re finding things on their own and then talk to friends about it.

“It doesn’t feel like a marketer is forcing something down  your throat,” he said. “You’ve gone to a place to find it, you’ve discovered it, and you share it with the world.”

The challenge in advertising to teenagers and young adults can be reaching them at their multiple methods of communication, especially since online advertising is still a tricky obstacle for marketers. Very successful brands understand there’s nothing better than having something “bubble up from the bottom,” according to Rudman.

“It’s very important to allow them to market to each other,” Phillips said. “Information is currency. Give them things that they value so they will share it with their friends.”

With the ongoing recession, however, the experiences of friends may have other ripple effects as well. Levy said seeing his friends have trouble landing part-time jobs has caused him to be more conscious of saving money.

“Small cuts whenever possible now,” Levy said.

The media coverage of the financial crisis has also changed spending .

“You stop buying random trendy items,” said Elizabeth Eun, a junior at Boston University. “You stick to buying things that are going to last longer and save you money in the long run.”

She mentioned Apple and American Apparel as noteworthy brands that have relied on pairing brightly-colored advertisements with sleek designs to project images of ‘unique’ and ‘hip’.

Apple recently launched a series of “There’s an app for that” TV commercials, one of which appeals to how the device can make life easier for students.

But in the case of American Apparel, the strategy can backfire as popularity causes the brand to lose its sense of uniqueness and consumers become less willing to spend dollars on the cotton clothing basics the company sells.

“People used to be willing to pay $40 to $50 for a hoodie, but not so much anymore,” she said.

Consumers are known to gravitate back to names they know and trust in a recession, but with young adults this trend doesn’t hold as true. Brands don’t have as long a shelf-life with young consumers, unless they continue to transform with the times, according to Rudman.

For companies able to alter their image and adapt, there may be opportunity in the economic downturn through deep discounting and heavy promotions.

“Brands need to offer more for less by offering price-conscious teens products and services where they feel they are getting a bigger bang for their buck,” said Anastasia Goodstein, founder of Ypulse.com, a youth media and marketing website.

Goodstein said higher-end brands might consider launching lower cost product lines and offering incentives like “buy three,get one free” or promoting layaway plans in order to keep old customers and lure new ones.

“They’re relatively young consumers so their allegiances aren’t completely set yet,” Phillips said. “They’re pretty open to trying new things.”

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