How Should You Advertise to Gen Z?

January 18, 2017

This article is included in these additional categories:

Advertising Trends | Creative & Formats | Teens & Younger | Youth & Gen X

Millward Brown has released its latest annual AdReaction study, measuring consumer attitudes and receptiveness to advertising via a survey of almost 24,000 Gen Z (16-19), Gen Y (20-34) and Gen X (35-49) consumers in 39 countries. The study finds that while these generations share some attitudinal similarities – such as preference for traditional over digital advertising formats – they also offer up some distinctions.

The following highlights some of the results and takeaways from the report.

1. Traditional Formats Preferred Over Digital

The study finds that both globally and in the US specifically, all 3 generations tend to display a preference for traditional over digital advertising channels (see the above chart for full findings). This finding follows from a recent MarketingSherpa study in which US consumers noted more trust for traditional than digital ads. Additionally, primary research from MarketingCharts suggests that traditional media ads (particularly TV ads) have an influence on more consumers’ purchases than digital ones.

Preferred Traditional Media Formats

On a global basis, the most preferred traditional advertising formats (ranked by Gen Z’s positive receptivity) are:

  • Outdoor: Gen Z (55%); Gen Y (56%); Gen X (54%);
  • Cinema: Gen Z (53%); Gen Y (51%); Gen X (47%);
  • Magazines: Gen Z (51%); Gen Y (55%); Gen X (56%);
  • Newspapers: Gen Z (49%); Gen Y (52%); Gen X (55%); and
  • TV: Gen Z (48%); Gen Y (53%); and Gen X (54%).

Notable within those results is a growing preference with age for print and TV ads. Print and TV tend to draw an older audience, according to a MarketingCharts study on media audience demographics, such that Gen Xers may have more familiarity with advertising in those media.

Preferred Digital Media Formats

Whereas radio – the lowest-rated traditional medium – still gets a positive reception from around 40% or more respondents, the same can’t be said for online ad formats. Indeed, none of the online ad formats measured achieved a positive perception as high as the traditional formats.

While advertisers (at least in the US) continue to pour money into digital formats, these are yet to see quite the same appeal as traditional types.

Intriguingly, digital video – one of the faster-growing media – is the least-preferred format, taking a backseat to display across each of the global generations. Perhaps video is seen as more interruptive and less easily ignored: research from HubSpot indicates that pre-rolls are more widely disliked than banner ads.

On a global basis, positive reception to digital formats (ranked by Gen Z’s positive receptivity) broke out as follows:

  • Desktop display: Gen Z (32%); Gen Y (37%); Gen X (33%);
  • Online search: Gen Z (32%); Gen Y (39%); Gen X (37%);
  • Mobile display: Gen Z (30%); Gen Y (34%); Gen X (31%);
  • Desktop video: Gen Z (29%); Gen Y (35%); Gen X (31%); and
  • Mobile video: Gen Z (27%); Gen Y (33%); and Gen X (28%).

Notable in these findings? Across the board, Gen X has a more favorable outlook on digital advertising than Gen Z, though the difference is slight in some areas.

As an aside, social media ads were not an option among online ad formats, though they’ve been rising in influence with Millennials.

Preferred Video Advertising Formats

Results regarding positive receptivity for video advertising hold some interesting revelations. While on a general basis, video advertising isn’t a preferred format for the generations (particularly Gen Z), certain forms of video ads do hold more appeal.

First among those are mobile reward videos, which gain a positive reception from 58% of Gen Z respondents. In a nod to the aforementioned interruptive nature of some video ads, the study finds far more of a positive reaction among Gen Z consumers to skippable pre-roll (43%) and skippable vertical video (42%) than to non-skippable pre-roll (21%). In other words, skippable pre-roll video is well-received by twice as many Gen Z consumers as non-skippable pre-rolls, a none too surprising result.

Also of note: mobile reward videos and skippable pre-rolls receive a higher positive rating from Gen Z consumers than from respondents from the other generations.

Separately, the study found, in measuring skip time among ad skippers for 12 YouTube ads, that Gen Z had a faster average skip time (9.5 seconds) than both Gen Y (10.9 seconds) and Gen X (12.6 seconds).

Attitudes to Branded Content

Another more positive result for online ads comes when examining attitudes towards branded content. Branded events, for example, are highly rated by Gen Z (52%), at a slightly greater clip than Gen Y (52%) and Gen X (49%). Social news feeds are close behind, getting a positive reception from half of Gen Z and Gen Y and more than 40% of Gen X.

Following for Gen Z are brand information (45%), social celeb content (45%), native articles (45%) and celeb content (43%).

(For Gen Xers, meanwhile, brand information is the preferred type of branded content.)

It seems apparent from these results that branded content is preferred over digital advertising formats such as display and video. Nielsen research actually has found that branded video is more effective than pre-roll video across several KPIs.

How Gen Z Avoids Ads

Ad blocking technology must be the primary way that Gen Z consumers avoid ads, right? It certainly is one of the main ways.

There’s reason to believe that Gen Z consumers are quite discriminating towards advertising, based on the study’s results. For example, almost two-thirds (66%) claim that they skip ads whenever they can, a figure that’s considerably higher than for Gen Y (60%) and Gen X (58%).

Additionally, about 1 in 8 are willing to pay for premium services (presumably to avoid ads). Overall, a net of 70% of Gen Z respondents either will skip or pay in order to avoid ads.

By comparison, fewer – though a substantial 52% – will use ad blockers of some kind. That 52% figure is a net of 3 separate actions:

  • Installing an ad blocker plug-in (37% of Gen Z reports having done);
  • Changing settings (26%); and
  • Installing an ad blocker app (13%).

Gen Z’s tendency to use ad blockers is about 27% higher than Gen X, per the study’s results. But Gen Xers are as likely to change settings and install ad blocker apps. The real difference is in Gen Z’s greater use of ad blocker plug-ins.

As for the reasons why Gen Z installs desktop ad blockers? The most common one is that ads interrupt them (66%), with this a bigger reason for teens than Gen Y and Gen X consumers (61% each).

Next up, a majority of Gen Z respondents report installing desktop ad blockers because the ads annoy them (54%), with about half of the other generations agreeing. Irrelevant ads (45% of Gen Z) and ads that slow down the computer (43%) are not quite as important.

The same order of results pertains to mobile ad blocking reasons, with Gen Z more likely to point to the interruptive and annoying nature of mobile ads than to their relevance. This squarely aligns with recent Celtra research, in which consumers said that relevance is less important than the level of disruption when evaluating mobile ad experiences.

Advertising Receptivity: Locations, Moods, Times and Creative

Although Gen Z seems to have some slightly different reactions to advertising than their older counterparts, the generations align fairly evenly in terms of the places where they’re most receptive to ads.

Across the board, respondents are easily the most receptive when they’re at home, and the least receptive when they’re at school/college or at work.

That’s probably a reflection of the moods that consumers feel are right for them to accept advertising. Leading among those is “relaxed,” with almost half of respondents across generations saying that this mindset improves receptivity.

There are some distinctions across the generations here, with “looking for something interesting” the next-best mindset for Gen Z but “looking for info” next for both Gen Y and Gen Z.

As for engagement options, “find out more” seems to be the preferred call-to-action for each generation. That’s followed by “take decisions” for Gen Z, and by “like/share/comment” for the older generations.

Looking at ads from another perspective, the data indicates that Gen Z holds the most positivity towards ads one can:

  • Skip (69%); and
  • Close (48%),

while showing less positivity towards those where one can:

  • Vote for something to happen (31%);
  • Choose your favorite among several options (28%);
  • Take decisions (27%); and
  • Interact via an assignment (17%).

In each case, Gen Z demonstrated a more positive reception than the other generations. As such, while Gen Z might be more discriminating towards advertising, there do seem to be ways to engage them more than other generations.

When it comes to the times when consumers feel most receptive to ads, there’s an interesting age-related discrepancy. While consumers across the 3 generations feel most receptive to advertising in the 6-9PM period, Gen Z were the least likely to say so. That was the same for the 9PM-Midnight slot, with Gen Z again lagging there.

By contrast, Gen Z felt more likely to be receptive to ads than the other consumers in the morning and afternoon hours.

Finally, in examining creative factors valued by consumers, Gen Z respondents showed some clear preferences. The list broke down as follows (ranked by % valuing the elements):

  • Funny or humorous (65%);
  • Has good music (56%);
  • Design (30%);
  • Features a famous celebrity (22%); and
  • Features and online/social media celebrity (18%).

In each case, these creative elements were more valued by teens than Millennials and Gen Xers.

Summary

In summarizing the results above and some of the recommendations outlined in the study:

  • Gen Z is generally more receptive to traditional than digital ad formats; although
  • Some video formats – such as mobile video rewards – see high ratings;
  • Gen Z is quite discriminating with ads, being most likely to skip them and to be the fastest to skip them;
  • Branded content seems to be more appealing to Gen Z than formats that are interruptive and non-skippable;
  • Music and design are important to this young generation and must be paid attention to as creative elements; and
  • Gen Z feels most receptive to advertising when relaxed, at home, during the afternoon and evening hours.

The full report from Millward Brown can be downloaded here.

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