Digital Design Blog

On Millennials, Marketing and Money: Why design for Gen Y?

Do we really need to create unique digital experiences for Gen Y?

That’s the running debate I’ve been having with some of my colleagues and industry analysts this week. I’ve always argued that to create great digital experiences online you need to look past demographics (and psychographics) to focus on consumer behavior. As such, our Avenue A | Razorfish design teams are much more concerned about behavior patterns — such as usage, purchase rates, etc. — versus unlocking the secret needs and desires of one generation or another.

However, over the last few days, I’ve been wavering on this stance in regard to Gen Y (aka The Millennials, aka the Facebook generation). Are they really a unique demographic segment/cohort that need to have experiences explicitly designed for them? While I initially pushed back on the notion, I’m starting to change my position for one main reason: Millennials spend far less money online than any other generation.

We’ve gleaned this based on tangential observations from client research, our Digital Consumer Behavior Study and some recent qualitative user research performed by Brandon Geary for our Digital Outlook Report. Forrester validates the notion with its Technographics Data which finds that Gen Y spends less online than any other cohort.

Now some of this can be attributed to basic lifestyle data: younger consumers have far less discretionary income to spend online than their older peers. But I think something more significant is happening. Gen Y primarily uses the web for entertainment and communication (e.g. Facebook) but saves their spending for the mall, rather than online.

The question for savvy marketers then becomes: Why design for Gen Y if they don’t spend online? It’s a darn good question too, since the predominant online advertising and eCommerce models are dependent on online activity — either measuring success in clicks or with credit card purchases.

Witness the difficulty Facebook and MySpace have had monetizing their immense amounts traffic — specifically Facebook which caters to Millennials. Right now the company is rapidly experimenting with different models (social ads, beacon, display, etc.) and trying to find the right mix. Let’s take a look at the Victoria’s Secret sponsored ad, served on Facebook news feeds, below:

Clearly the ad is focused on getting a user to a) click and b) purchase a new BioFit Uplift. But, if our research bears out, Gen Y is much less likely to click to purchase. The best result, then, for this ad would be one where the audience clicks, explores, perhaps watches a 30-second spot and then remembers the BioUplift the next time they get to a mall. Valuable? Yes! But much harder to track based on existing models and technology.

So what’s a marketer to do? The answer is, after much thought, to engage this generation on their terms with unique experience and then use a robust analytics platform to track their behavior across channels — both online and off. Only by measuring this activity across the digital entire ecosystem and then correlating it to offline purchasing will a better picture of how to design for Gen Y emerge. And, come to think of it, for all consumers as well.

Unless, of course, everything really is FREE! online — per Chris Anderson in this month’s Wired — then all bets are off.