By Nielsen's Gracia Acoba, Senior Research Analyst; Josh Hopson, Client Service Executive; Paige Sontag, Senior Research Analyst; Yasmin Hussain, Senior Research Analyst
The shifting of advertising budgets into the digital space brings a number of great opportunities and efficiencies, but it also brings many complexities. Without question, targeting audiences across digital channels is a challenging feat for advertisers, agencies and publishers. And it is not getting easier.
Each generation comes with a unique set of behaviours and presents a unique set of challenges for those looking to reach them. For the last decade or so, Millennials have been the generation that every brand has had to engage as their spending power has grown. With this generation now past teenage years, however, digital advertisers are shifting their focus to the succeeding generation, Generation Z or Gen Z.
Like Millennials, this generation spends significant amounts of time on social media sites and video source platforms like Instagram, Snapchat, Facebook and YouTube searching for content that is engaging and entertaining. Now more than ever, digital advertisers need to focus on targeting their campaigns to these upcoming influential spenders on products and brands. So how well is this pivotal generation being reached?
A recent Canadian study using data from Nielsen Digital Ad Ratings measured Gen Z Canadians aged 13 to 17 to illustrate how challenging it is for advertisers to get their message in front of them. When taking into account all the cumulative ad campaigns targeted to Gen Z and measured through this service, more than 90% of impressions missed the target. This is to say less than one-in-10 impressions served through these campaigns were delivered to a Canadian from Gen Z.
The study also found that for every 1,000 impressions served in a given campaign, only 28 impressions reached a unique member of the intended target of 13 to 17 year olds. Moreover, while there are approximately two million Gen Z Canadians, on average only 2.1% are actually being exposed to digital ad campaigns targeted to them. This is bad news for advertisers and agencies alike because it is proof of how difficult Gen Z is to reach through advertising.
To give context, we explored digital ad campaign reach among Younger Millennial Canadians aged 18 to 24. Comparatively, just under 75% of impressions missed the target. For every 1,000 impressions served in a given campaign, 81 impressions are seen by Canadians 18 to 24 year old. This is 3x more effective than for Gen Z. Targeting advertisements effectively is generally a difficult feat, but these numbers show it’s more challenging when targeting Gen Z.
Our research found one key difference in advertising that may explain why Gen Z is proving more elusive to reach than the preceding generation, Younger Millennials. A larger number of Canadian ad campaigns targeted to Gen Z are programmatic, using automated processes to allocate digital advertising spend, compared to those targeted at Young Millennials.
Programmatic advertising is an approach to advertising that offers value—automation allows ads to be targeted at a very granular level at lower cost than traditional advertising. By focusing more on programmatic advertising, advertisers may be trying to break free from the traditional media buying methods in a hope to get hold of this generation’s attention which is bombarded with endless content every second. But with advertisers relying more on computer algorithms to buy ad space, it begs the question: is this path really effective to reach Gen Z? As programmatic advertising becomes increasingly popular and pervasive, it will become more complex to engage the desired target effectively and, in time, execute successful campaigns. There is an impending need to understand the unique preferences of this defining generation and build customised and creative campaigns that yield better results.
To successfully break through the clutter, advertisers must focus on two crucial objectives: effectively reach Gen Z in their environment and provide compelling addressable content.
Brands, agencies and media companies can leverage their own first-party data assets and combine them with third-party data to build out custom target segments. These segments, based on an audience’s interests, past purchases and previous engagement, can help brands and marketers find the right audience for their message and deliver it in the most appropriate context. This can then be further authenticated by third-party measurement and verification services to thoroughly validate the efforts and optimize toward key performance indicators (KPIs) on the campaign. These segments are key to moving investment in the right direction and reducing the amount of digital ad waste, particularly when trying to reach Gen Z.
Gen Z are bombarded with messages and are a generation that can quickly detect whether or not something is relevant to them. So the use of addressable advertising and relevant content will be essential to quickly grabbing their attention before they move on to something else. An effective data management platform (DMP) can help brands and marketers build an understanding of their audience members to curate custom creatives that are served in real-time to effectively grab Gen Z’s attention. This brings the audience member in and allows them to feel they are a part of something—not just being marketed towards.