Together with our guest, youth researcher Prof. Bernhard Heinzlmaier, Dustin Tschentscher, member of the management board at JOM Group, provided exciting insights into what makes Gen Z tick and how advertisers can reach them in our Impulse event “Blackbox Gen Z – How Brands Convince the Young Target Group.
What makes Gen Z tick?
In his keynote speech at the start of the event, Prof. Heinzlmaier described the basic framework of Gen Z, i.e. those born between 1997 and 2012, as follows: On the one hand, Gen Z follows the principle of performative economics: self-presentation is an important factor for success. On the other hand, the generation has a high tactical adaptability: in the online world, they have learned that they can either agree via a “like” or any form of “dislike,” if there is any possibility of this online, can lead to very negative reactions being triggered. They transfer this experience to real life as well: Before they offend with their opinion, they prefer to keep it to themselves.
This reticence is also reflected in the fact that Gen Z is rarely adventurous, but rather longs for stability, security and the ability to plan. The top priority is health in all areas. Moreover, considering that these generations are surrounded by multiple crises, it is not surprising that their ideal lies in the past and that they look forward to the future with concern.
Heinzlmaier makes a striking comparison between Gen Z and two types of birds: On the one hand, there are the quails. They are the privileged upper third and look positively to the future. They are self-centered and intent on finding their own advantage and getting themselves through.
The larger majority of Gen Z, however, belongs to the penguins. They are more family-oriented and usually live a very traditional or petit-bourgeois life. Gen Z is therefore more in the middle of society and more conservative than any previous generation.
At the same time, Generation Z is basically very brand-oriented. Brands are essential for both quails and penguins because they provide orientation. Once they are convinced of a brand, they remain loyal to it. When addressing Gen Z, brands should take into account their need for security and harmony and avoid overly pointed communication.
How can brands convince Gen Z?
After Prof. Bernhard Heinzlmaier gave an exciting insight into the nature of Gen Z, Dustin Tschentscher provided answers to the question of how brands can reach them and, in the best case, convince them. What is striking about the media usage behavior of the young target group is that they have a very high affinity for digital media. Video and audio streaming as well as social media are particularly highly regarded there.
Gen Z is less and less likely to be reached via linear TV
In fact, 94 percent of Gen Z consume moving image content every day. The challenge lies in addressing them with advertising. This is because 25 percent of them can no longer be reached via linear TV, and the few who do consume linear TV watch very selectively.
Users who still consume linear TV, but use it much more selectively, can be reached specifically via addressable TV. This is because ATV combines the advantages of linear TV – its reach – with the advantages of the digital world. Targeting, e.g. age targeting, can be used to address Gen Z in a targeted manner.
In this case, the messages are either played during the switch-on or switch-off process or are superimposed on the media company’s own advertising independently of this.
In addition, Generation Z is increasingly using non-linear video, especially Netflix, YouTube and Amazon Video. Users of non-linear video can be reached via Connected TV. In the CTV sector, the number of providers often leads to a fragmentation of the market. The sector can be roughly divided into three different models:
Ad-funded models are purely ad-financed models without a user fee. (Amazon Freevee, among others).
Hybrid models offer users two options: Either they pay a fee and receive an ad-free variant, or they watch for free but have to put up with advertising (Joyn).
Subscription-funded models, on the other hand, are only ad-free and available for a fee (for example, Netflix or Disney+).
However, it can be observed that subscription-funded models are opening up more and more to hybrid models, thus enabling further options for addressing Gen Z.
Increasingly popular with Gen Z: Gaming
As many as 40 percent of Gen Z play video games every day, and as many as 80 percent of them occasionally. Meanwhile, there are also some providers like Anzu that offer advertising space directly in games. But Gen Z doesn’t just play games themselves; gaming is also a popular category in video streaming. The most popular platform for this is Twitch.
Around 82 percent of Gen Z’s streaming time is spent on gaming, but non-gaming areas are also becoming increasingly popular. Sports, music, fitness/health, and travel and outdoor are especially exciting for Gen Z.
Advertising messages can be placed on Twitch either via display ads, non-skippable in-stream ads or as influencer program sponsorships. The latter can also be used to include the brand logo and a call-to-action. In addition, this option also includes community management.
Spotify and YouTube Music are the most popular providers in audio streaming
In the area of music or audio streaming, Spotify is by far the most popular platform. Users can either use Spotify ad-financed and without a fee or ad-free but for a fee. Among Gen Z, 55 percent use the ad-financed option.
To place ads on Spotify, interest or real-time targeting can be formed, for example. Or ads can be placed in specific genres or playlists.
Podcasts are also consumed a lot by Gen Z: 60 percent of the target group listen regularly and 65 percent of them even use podcasts to search for topics of conversation. Unsurprisingly, if we look at Prof. Bernhard Heinzlmaier’s Insight “Health is most important to Gen Z,” mental health is a popular category among podcasts.
Podcasts also offer exciting opportunities for media planning:
Native inclusion: podcasters record the ads themselves. This has the advantage that it has an infomercial character and appears very authentic. However, no other targeting can be put on.
Voice Talent Ads can be used to place targeted messages via the Spotify Audience Network.
In addition to Spotify, YouTube Music is also a popular music streaming service for Gen Z. However, it is still relatively unknown among many advertisers, even though targetings can be used to communicate in a very topic-specific manner and YouTube Music is very economical due to billing on a CPM basis.
95 percent of Gen Z are on social networks
Social media play a major role in the media usage behavior of Gen Z. The young generation is on every kind of social network. The young generation is on all kinds of social media apps and even uses them several times a day.
Unfortunately, social media is still often not thought of as an independent channel. Thus, cut downs from other channels are often recycled for the social networks and are thus not adapted to the usage behavior of the apps.
Visual communication plays an increasingly important role
TikTok is just one example of a very popular social media app among Gen Z. TikTok has the advantage of reaching 25 percent exclusive users, i.e., users who are not on any other social network. Therefore, advertisers should especially not work with cut downs here, because this is where brands can best interact with users. There are two options for this, which should be looked at more closely:
The Branded Hashtag Challenge: Under a hashtag, brands call on users to create certain content pieces. Here, companies have the opportunity to go viral.
Branded Effects can be used to distribute branded filters.
Both options have the advantage that users take them up to create user-generated content. And in the meantime, this can also be pushed with a budget via TikTok as a so-called Spark Ad.
At a glance:
Gen Z is watching less and less and much more selective linear TV. Selective users can be targeted via ATV, and users of non-linear moving images can be reached via CTV.
Snapchat and TikTok are increasingly used for visual communication.
Twitch is becoming increasingly interesting for the non-gaming sector as well.
Spotify and Twitch can boast by far the biggest affinities in the audio and video streaming sector.
YouTube Music offers a huge opportunity to reach Gen Z.
Especially in social media, the interplay between creation and media is becoming increasingly important in order to be able to convince Gen Z.