By DON TAPSCOTT
TODAY'S computer-literate Web-surfing kids are going to force corporations to rethink their strategies towards merchandising and mass-market advertising. These kids are the first generation to come of age surrounded by digital information technologies. The effects are already dramatic: Compared to their parents, today's youth are more curious, self-reliant, contrarian, high in self-esteem, and global in orientation. And as consumers they will be much more demanding and discerning.
These 88 million offspring of the North American baby boomers -- I have dubbed them the Net Generation -- now outnumber their parents by a healthy margin, and they are the richest young generation ever. Unlike any kids before them, they also influence a large and growing portion of their parents' purchases. The Alliance for Converging Technologies estimates that American preteens and teens spend directly $130 billion and influence the spending of upwards of $500 billion.
It isn't only computers, video games and high-tech purchases that children influence. They feel they should have a large say in everyday grocery and clothing purchases and they expect to be consulted about major household acquisitions like cars and appliances.
In the past kids had little basis on which to exert such influence, but with digital media, particularly the Web, they now have a way to become more knowledgeable about a product than their parents. Consider the prospect of a 13-year-old girl influencing her parents to buy a Volvo based on safety statistics she has down loaded from the Web.
But successful marketing to the Net Generation requires more than just packing the home page with buckets of product info. Web surfing encourages certain personality traits, and goods and services targeted at kids should reflect this. For example, Net Generation kids love options. On the Web they can surf the world, flitting from page to page, idea to idea, always finding something new. Surfers don't like being boxed in with artificial constraints. If you want their loyalty, you must give them choice.
Moreover, they won't accept being penalized for the wrong choice. If they don't like a new Web site, they just hit the 'Back' button. The same should be true of products and services. Mistakes should be undoable.
Net Generation consumers also want the ability to customize. Corporations should follow the lead of software companies that allow users to fine-tune their software to their own work habits. They also like to try before they buy, as the concept of the demo is deep in their on-line culture.
Whither the Brand?
As these kids grow older, the market will increasingly become a collection of inveterate comparison shoppers, well-informed, opinionated, and demanding. In such a marketplace, maintaining the concept of "the brand" -- at least as we've known it -- becomes a much more difficult task.
Until now the brand was largely a product of mass communications. Using the one-way broadcast and print media, marketers could convince people through relentless exhortations to "Just do it!" If you say "Things go better with Coke" enough times, you can establish the Coke brand in the market.
To date this technique has worked well, but it won't be so successful in the future. The Net Generation is building a culture which is incompatible with the mass communications necessary for current brand establishment. In marketing, interactivity equals increased power to the consumer to make informed choices and to buy products which deliver real benefits and value and reject those which do not.
The Energizer bunny can claim to outlast Duracell, but if it doesn't, young media-savvy shoppers will find out. They will go on the Net to examine third-party evaluations or participate in discussion groups to determine which battery makes the Walkman work longer. Such forums have enormous potential clout. Witness Intel being brought to its knees over the buggy Pentium chip because of the furor raised on the Web.
Smart software on the horizon -- software agents -- will further undermine the traditional branding. Rather than trusting the brand, kids will trust their agents. Sometimes called softbots, knowbots, or just "bots," agents are software which gets to know them, their preferences, and their sense of style. These tireless little workers surf the Net day and night looking for information you've requested: finding that perfect chocolate-chip cookie; evaluating new movies based on your preferences and the opinions of others you trust; organizing your personalized daily newspaper; communicating for you; trying on different types of jeans and doing other jobs. In many areas, trusting your agent will become synonymous with trusting your own experience.
Brand Image, Brand Relationships
Developments such as these will cause a change in thinking among marketers -- away from focusing on brands and brand image to thinking about relationships with customers. The Net provides new opportunities to evidence the true value of products and services as well as to create meaningful relationships between providers and customers based on trust. As the power of mass communications declines, replaced by the power of the interactive media and therefore the consumer, brand loyalties for informed and value-conscious purchasers will be based increasingly on value.
It is networked information which is bringing value and real benefits to the fore. For example, grocery shoppers using the Peapod network can ask for all the products in a certain category sorted by different criteria such calorie count or nutritional value. The most frequently used sort criteria are cost followed by fat content. Determining the healthiest peanut butter takes seconds, and Skippy's mass-marketing would have little impact on the purchasing decision. Good brands will correspond closer to good products, and those products which are undifferentiated in value quickly become a commodity.
To brand managers, this new world will require new strategies. To begin, marketers can reach N-Geners with ads that are rich in informational content or entertainment value, such as great corporate home pages on the Web. The Coke, Pepsi, McDonalds and M&Ms home pages were early examples of sites that engage the young user in enjoyable activities. On the Avery Dennison kids' site, N-Geners can send virtual stickers to their friends or create their own stickers.
The Net enables marketers to target individuals with messages which they will value. The best people to target with Volvo advertising are people who are looking for a car and who are in the Volvo demographic. The Net allows delivery of broader and more detailed messages to these people. The narrow message -- "Volvo is the safety car" -- is targeted to a precise demographic group -- yuppies with families. The messages are delivered through the mass media to the correct audiences (upscale publications, specific radio and television programs). Alternatively, the message is delivered through direct marketing, aimed at selected city boroughs, streets and even individuals.
But when the media becomes based on choice, messages, ironically, can become comprehensive. Volvo can become the "everything car." The youthful driver considers buying a new car. One day in cyberspace, she likes the look of Simon Templar's Volvo in the movie "The Saint." She stops the movie and asks Simon to tell her about it. She asks about Volvo safety and, sure enough, they have great safety features. She asks about acceleration and, sure enough, they do well there. She inquires about mileage and Volvos do well in that regard as well. Says Dave Carlick of Poppe Tyson advertising, "Instead of having one feature which suits many people, you can have many features which suit one person. Interactivity allows that one person to explore products and services according to their own interests and find out what is important to them."
The evidence suggests that the N-Gen is on the cusp of such proactive product exploration. Advertisers should create compelling interactive environments where consumers will want to go and can do comparative shopping and thereby receive appropriate and comprehensive marketing messages.
The Net will also allow ads to be integrated with each other and with transactions, in ways not possible in the physical media. Software company Oracle President Ray Lane describes the situation where someone buys a Sony stereo on-line, and is offered a $10 coupon to the electronic Tower Records for any Sony title. The coupon expires in 15 minutes. He says "that's a highly qualified, motivated audience of one."
Don Tapscott, Chair of the Alliance for Converging Technologies, has written six widely read business books including the newly released Growing Up Digital: the Rise of the Net Generation (McGraw Hill, 1998).