Don Draper would be thrilled.
Recent Ad Age stats show that America's 100 biggest advertisers shelled out a record $109 billion on marketing last year, eclipsing the amount spent before the economic crash in 2007.
Anyone who owns a TV or looks at social media can testify that a big chunk of that ad spending comes from insurance—Geico alone has a veritable barnyard of ad campaign mascots in play. Among Ad Age's ranking of the 25 most-advertised brands, three are insurers (with Geico far out front).
Yet Gallup's “State of the American Consumer report” finds that advertising on social media outlets may not be very effective: Only 5% of American consumers say the ads have a big impact on their purchases. Admit it: How often do you click on pop-up ads on social media, no matter how cleverly targeted they are?
Gallup finds that 94% of Americans go to social media primarily to connect with friends and family—or to share what they know (53%), get information about a company or organization (40%), find others with similar interests (32%), play games (23%) or look for a job (22%).
But when it comes to purchasing decisions, buyers are more influenced by old-school brand campaigns (window displays at brick-and-mortar retailers, TV commercials, even catalogs and magazines) than a company-sponsored Facebook page or Twitter feed, the study finds.
Even millennials, who were weaned on social media, find such advertising ho-hum: 48% of them say they are not influenced at all.
And if you think millennials are cynical about social media advertising, wait until you meet “Generation Z,” born in the 1990s and raised in the 2000s. They already are more than 11 million strong, a number that's expected to swell to 30 million by 2019, according to a study by RainMaker Thinking Inc. Among other things, Gen Zers:
Want to change the world: 60% want to have an impact, compared to 39% of millennials, according to marketing agency Sparks & Honey.
Are entrepreneurial: 72% of high school students want to start a business someday and 61% would rather be an entrepreneur than an employee after college, according to a study by Millennial Branding and Internships.com.
Are digitally over-connected: Gen Zers multitask across at least five screens daily and spend 41% of their time outside school with computers or mobile devices.
Prefer to work independently: Millennials work well in teams and crave mentor feedback; Gen Z is “more about helping themselves,” according to Millennial Branding.
Lack brand loyalty: They're more concerned with products than brands, and will switch brands for higher quality, according to marketing agency Martin-Wilbourne Partners.
Are close to their families: This is both literal and figurative—many Gen Zs live in multi-generational homes.
They're fast communicators, often using emoticons and emojis instead of words: Accustomed to rapid-fire banter, Gen Z is not precise at communication and leaves room for interpretation.
So, hey, big spenders—will pumping up your social media ad budget attract these potential customers? If the Gallup study is any indication, you might be better off buying a billboard.
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