Data Science for Generation Z

Data Science for Generation Z

Giles Cottle, Mon 11 March 2019

In the TV industry, we have seen a seismic shift away from the demographic panel data typified by the likes of Nielsen, and towards using more nuanced TV data and bigger datasets to target advertising and drive subscriber and viewer analytics

However, the one demographic metric that seems to our data science consulting team to be as relevant as ever is age, defined by "generations" such as baby boomers and millennials. As the youngest millennials are now turning twenty-five, so there is a definite need to explore the new generation, widely known as GenZ, and encompassing people born between 1995 and 2010.

These "generations" aren't simple demographics defined by age right now but by the year of birth. Generational metrics aren't looking at what a typical 35-year-old or 55-year-old does, they are looking at how a generation responds over time, and ultimately over a lifetime, and looking at characteristics that fundamentally define the group, and differentiate it from other groups.

Don't underestimate the spending power of GenZ, as there are more of them and they have more influence over consumer decisions than any generation before them. Assuming they are just a continuation of millennials is inaccurate, and it is definitely worth getting the data science team to focus on GenZ metrics to engage with this group and market successfully to them. Given that by next year this generation will already be the largest group of consumers worldwide and represent 40% of consumers in the UK and US with $200billion to spend directly and $1trillion indirectly, they are an essential group to understand.

Begining to understand GenZ

The first thing a data strategy team working with metrics to help their company to understand and engage with GenZ is to look at defining features in your reporting and modeling, and with an emphasis on marketing goods and services to this generation. GenZ is a group which doesn't particularly like ads and tends to be the early adopters of ad-blocking technology, making reaching out to them more challenging than with older groups. However, the generation responds well to ads which have celebrity endorsement and which focus on ethical values. They are also developing a reputation for being financially conservative, as well as favoring a great product (say an iPhone) over a great experience (say a holiday), so it is essential to be seen to be giving them value for their money. 

As keen observers of the TV industry we have noted not merely the rise of YouTube but how many entrepreneurial members of GenZ have made successful careers for themselves as influencers using these and other social media platforms such as Instagram as leaders in say the field of beauty products, cleaning, exotic travel or other lifestyle choices. This approach is very different from the "traditional" method of companies taking the lead in defining what the leading beauty products or vacation destinations are. Influencer marketing identifies the individuals who are likely to have a strong influence over whatever field they are in and either tries to conform their own message to what the influencers are saying or directly get them to endorse their products and services.

GenZ is a generation which has grown up with the Internet available on multiple devices and are social media savvy. Getting noticed on social media and maintaining the presence of the brand is especially important with this generation. It isn't that TV ads won't work with them, but they won't work alone and have to be part of a much broader strategy where the brand itself tries to set trends and become an influencer. Ethical choices are also important, as illustrated by the popularity of veganism among GenZ. Promoting actively moral and authentic behavior, as we saw in Gillette's The Best Men Can Be campaign, can be an effective way to get a response from this generation, especially if the ad appears "edgy" and the brand appears willing to take risks.

This generation likes and expects companies to treat them as individuals, which is great for targeted ads and addressable TV as long as the marketers get their targeting right. This generation has less tolerance for ads which they think don't concern them than older generations, such as car ads to people who don't drive or sportswear ads to people who don't merely dislike sport but also wearing sporty clothing in social situations. However, if targeted ads do get it right, this generation is more likely to respond well to advertisements which they feel are relevant and delivered on platforms which they actually use.

Unless you are lucky enough to have data scientists on your team who are part of GenZ we counsel being very cautious about defining how they are likely to act with metrics, not least because it is something the generation doesn't particularly like. It is easy for older generations to fail to understand people who have been using smartphones since early childhood, and they are aware of this. Providing digitally native experiences tailored to this generation is a great way to reach them, and this will need research both about GenZ metrics and how they best to respond to being reached out to by companies. Transparency and conveying a meaningful story will help this process. This article by Tom Weiss, Dativa's Chief Data Scientist, on how to make targeted advertising ethical, is an excellent example of the kind of ethical and transparent thinking which is typical of GenZ and advertisers and those who sell advertising space would do well to consider its recommendations if as an industry we genuinely want to engage with GenZ.

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