Channeling The Future
Final exams are over, and the sun is shining brightly in State College, Pa. Twenty-three-year-old Gordon Carson Jr. -- CJ for short -- has every reason to kick back on the terrace at the Mad Mex restaurant and drink a beer. He is graduating in a few days with a degree in supply-chain management and is to be commissioned later this summer as a lieutenant in the U.S. Marines. For now, it's time to relax. And for CJ, that means lots of time in front of screens. He loves TV, he chats with friends, and he plays card games on the Internet. He rents video games and exhausts them in a week. He's nuts about movies and is reading the paper-and-ink edition of Robert Ludlum's The Bourne Supremacy to prepare for this summer's movie release.
Like much of his generation, known by marketers as "millennials," CJ lives in a world jam-packed with information and entertainment. Born between 1979 and 1994, the 60 million in this generation are coming of age in the new millennium. They practically grew up with the Internet, so they're far more likely to regard information as something they can control. This thinking extends from one device to the next. Through most of his waking hours, CJ wades through three or four streams of data at the same time. Last baseball season, his roommates say, he hooked up three TV sets, each playing a different game, and watched a fourth with streaming video on his laptop -- toggling all the while between the game and a fantasy baseball site.
All these diversions are enough to drive advertisers batty. Coaxing a generation of consumers who swim in information to focus on one ad -- it's like getting a fish to concentrate on one particular patch of water. What's more, while the millennials consume gobs of digital fare, they also master tech tools to evade marketers and to customize their own programming. Commercials on TV? Those that fail as entertainment are bypassed by flurries of channel surfing, or zapped with the push of a button on the TiVo Inc. (TIVO ) remote. Pop-up ads online? They had better offer something useful, or they'll be nixed by a pop-up blocker. The frustration among advertisers is such that one startup, BrandPort Inc., is building its business on paying college students 50 cents to watch 30-second ads on their computers. "Companies are desperate to grab their attention," says Kivin Varghese, the company's chief executive officer.
For advertisers, CJ's generation is not only a vital consumer market but also a laboratory for the future. College students living away from home make up the richest concentration of early adapters, pioneers of a digital lifestyle. Four out of five of them have broadband connections and cell phones, according to recent Harris Interactive Inc. survey. And they're far more likely than the rest of the population to play video games, chat online, and send text messages by phone. But how to reach through the tangle of media and connect with young, tech-savvy consumers? "This is the group all advertisers are trying to hit," says Malcolm G. Bird, a senior vice-president at America Online Inc.
Spending some downtime with CJ and his four roommates in their unkempt State College apartment provides a glimpse at how this generation consumes information -- and how the media and advertising industries are hurrying to respond. The result, it's already becoming clear, is transforming media and advertising into something that reflects the digital chaos of CJ's apartment.
How so? CJ's apartment features a mess of appliances and gadgets. But they often work in concert, and many of their functions are starting to overlap. The computer is the stereo and an alternate TV. The game console hooks up to the Net. The cell phone sends votes for interactive-TV programs, like Survivor. This turns TV into something more like the Internet, with the phone functioning as a mouse. The traditional barriers between all these media hardly exist in CJ's apartment. That means that once visitors take their eyes off the dead fish floating in the clouded aquarium, they can enjoy a privileged view of the coming age of digital convergence.
Lesson One in this world is that the customer, with his finger on the zapper, the mouse, or the remote, wields control as never before. This means that advertisers have to come up with commercials CJ values. Some succeed. But instead of blasting him with fusillades from the TV, they must reach him through hundreds of Web sites, channels, video games, even billboards. "The idea is to surround them," says Matthew C. Diamond, CEO of Alloy Inc. (ALOY ), a New York ad agency specializing in the youth market.
The industry brims with theories on what makes millennials tick. They're renowned for multitasking, regarded as hard sells on brands, skeptical about advertising. "We have a tacit arrangement with them," says Martyn Straw, creative director at BBDO New York. "We pretend not to sell, and they pretend not to buy."
CJ, for one, indulges in no such charades. He's an avid consumer of entertainment and gadgets. He can catalog the model numbers and prices he paid for items going back years. Every summer, he says, he spends some of the money he earns on a "big-ticket item." Two years ago, it was a 27-inch JVC (MC ) TV. Last summer, he brought back a TiVo digital recorder.
Here, CJ is on the early side of a trend. To date, deeper-pocketed boomers have led the trend toward digital recorders while students have waited for hardware and subscription prices to drop. But CJ sees the digital recorder as an essential for time management. He uses it to record a long list of shows, from CSI: Crime Scene Investigation and The Sopranos to Jeopardy! And he says it should come in handy in the Marines. "If you're bivouacking, you can TiVo the whole week's programs," he says. One area where CJ lags: cell phones. He's still waiting to buy one with a color screen, camera, and Internet access.
Movies are his passion, and they influence his life deeply. He's going into the Marines, he says, because he's eager for a life of travel and action; he wants to be a pilot, and he wants to serve his country. But much of his inspiration for the move comes from films he has seen. He cites Patton and Saving Private Ryan. He still enjoys sitting at home with his father, a regional salesman for PowerBoss (MMAN ) industrial cleaners, and "watching The Bridge on the River Kwai, [and] old John Wayne and Audie Murphy war movies on AMC (CVC )."
In the apartment, CJ spices up the mix. Last year he bought a device called a "splitter." This permitted him to channel the cable connection into three TVs at the same time. His ideal scenario is to watch two sports events passively on two of the TVs, with the sound down, and then watch a movie on the third, with the sound up. "It's almost like a sports bar," he says. Not that he just sits there and soaks it all in: He juggles the sound on the programs with his universal remote, and he often watches all three out of one eye while playing a card game with his roommates, or surfing on the Net.
CJ's generation is famous for such frenetic multitasking. In previous times, of course, students often listened to the radio, watched TV, and yakked on the phone while doing homework. But today's young people have far more tools, and they use them. It's typical, say marketers, for young people to surf the Web and watch TV at the same time, often looking up to the TV only for funny scenes or replays of a home run or touchdown.
How do advertisers respond? For starters, they pump promotions into the programming. Avon Products Inc., (AVP ) for example, not only sponsors the NBC (GE ) soap opera Passions but also has paid to have one of the lead characters work on the show as a sales rep for its youth line of cosmetics, mark. "We needed our business to be woven into the fabric of the show," says Deborah I. Fine, president of the company division, Avon Future. Following the same thinking, advertisers pepper sports programming with a blitz of sponsored spots, with digital billboards even popping up on the hallowed brick walls of Chicago's Wrigley Field.
I WANT IT NOW
You might think CJ would use TiVo to cut the ads out of sporting events. It's a common practice to start watching a game about an hour after it begins and then zap the ads until catching up to real time -- preferably on the last play of the game. But this approach collides head-on with a common priority in CJ's generation: the fervor to have up-to-the-second information. "I don't TiVo sports," he says. "It's too real." He figures that if he watched a game even minutes behind everyone else, he would be in the dark while everyone else knew the score -- a painful idea. What's more, since he always has the Internet up when the TV is on, he couldn't help but see the up-to-date score. That would short-circuit the drama on the tube. And all those commercials? He has plenty of other screens to look at while they're playing.
This common desire among millennials to be in the know, or to be among the first to experience something, provides marketers with a useful hook. Video rental outlets such as Mike's, down the street from CJ's, prerelease newly arrived DVDs at midnight -- giving a few customers a chance to see them early. This spring, CJ hurried there at midnight to rent Lost in Translation, a movie that was just reaching State College theaters. "I saw the DVD a day before everyone else did," he says.
Advertisers who fare best in CJ's world have a line on his passions. When they succeed, the ad becomes part of his world, and he passes on the message to friends. He says he's happy, for example, when players from his favorite baseball team, the Phillies, are named on ESPN as Subway Subs of the Week -- an award named for the sandwich chain. And he recalls feeling excited when he visited the Yahoo! (YHOO ) community site last spring and ads for the Quentin Tarantino movie Kill Bill: Vol. 2 popped onto his screen. "I loved it," he says. "It got me psyched for the movie."
Miramax Film Corp. (DIS ) lucked upon a fan. The next challenge is to take the luck out of it and pepper consumers like CJ with loads of commercials customized to their tastes, location, even the time of day. He already sees marketers working to pry loose his personal data. "It happens all the time," he says. When he visits new sites, forms pop up asking him for personal information. "I say 'bag it,' and click right out."
CJ is suspicious of such entanglements -- worried that marketers will use his data to bombard him with ads. He would rather stay in control, even if it costs money. He has already quit downloading pirated music, for example. He's scared of viruses and the corrupted files that could come with them. He has even started to buy CDs again. "If you go the day they come out, they sometimes sell them for $9.95," he says. The lesson? CJ, along with many of the millennials, will spend money -- but demands options and control.
And control over their countless options gives them unprecedented power. In a sense, this reverses traditional roles. It's the advertisers, like sweaty-palmed young job applicants, who are nervously practicing their lines for CJ and 60 million other demanding millennials. These marketers know they had better make a good first impression. Because CJ and his generation call the shots. Anyone who bores them will be getting blocked, zapped, and tuned out for years to come.
By Stephen Baker