InformationWeek

February 12, 2001

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Redefining Business:
Kids These Days

continued...page 2 of 2

By Eileen Colkin (ecolkin@cmp.com)

More on marketing:

sidebar:Ad Creep: Is It Hurting Teens?

TechWeb News: San Francisco: Wireless Advertisers' Utopia (2/2/01)

TechWeb News: Ads, Online Voting Were Big Game Diversions (1/30/01)

This spring, MerchantWired plans to launch a project developed with Found Software Inc. called Clixlist that ties a retailer's online site to the cash registers of local stores and to its warehouses. In future incarnations of Clixlist, Covington hopes to offer an in-store scanning capability that automatically charges items to a credit card, so shoppers can buy without waiting in line. Teen-agers will be the first test market, says Covington, because they're anxious to try cool new technology that will help them shop independently while using their parents' credit cards.

To win over these buyers, companies have to provide information, says Forrester Research's Anectol. Even though today's teens are new to retail buying, they're likely to expect to be able to research a product before they purchase it. "That's something that they're going to carry into adulthood and apply to more expensive items," he says. "Are you going to be able to market to them the way you can to adults today? No. Companies are going to have to take this market seriously."

That means presenting products in a way that kids want to see them--with choices and comparisons. Handspring Inc., for example, sells its teen-oriented Visor Platinum handheld gaming computers online but not without showing potential customers a side-by-side chart comparing competitive products, including the Palm IIIxe and Compaq Aero 1550.

Procter & Gamble Co. is handing the entire discussion over to teens. It's promoting itself through a partnership with Bolt Inc., on an online "hangout" that's been visited by more than 500,000 high schoolers. Bolt promises to write about everything from kissing to current events, letting members share opinions with each other and Bolt staffers.

P&G's Web site hosts a page that provides beauty tips for teen-age girls sponsored by its Cover Girl brand but also has discussion rooms offering information about breast cancer and dating. P&G "isn't in a position to shove messages," says Bolt CEO Dan Pelson, "but rather, to have a dialogue."

Bolt analyzes its registration data to create subsets of teens for direct E-mail marketing. For example, within each gender, it has five subset identities ranging from Alpha Teen women, for the trendsetters, to Awkward Teen women, for the less confident. Sponsors such as P&G use that breakout to send messages that conform to the individual's personality.

New technologies have created an additional challenge for marketers--figuring out not just which Internet sites and brands a company wants to be associated with but also which emerging technologies, says Maggie Boyer, VP of media at interactive advertising services firm Avenue A Inc. For instance, banner ads have lost appeal and look rather square, she says, and a cutting-edge brand wants to make sure it's using the right delivery vehicle as well as sending the right message. "That can be best done through killer apps like instant messaging," Boyer says. "That's a relaxed environment where teen-agers are more likely to accept and trust a message."

Boyer predicts the must-have technology for marketers will be wireless. A recent study by Cahners In-Stat Group supports that prediction, forecasting that teen-agers will be the fastest-growing market for wireless voice and data services, climbing from 11 million users today to 43 million in 2004.

Wireless service provider Sonera's Hughes plans to bring together these trends--new technologies, association marketing, and a focus on youth--when the company offers instant messaging on cell phones in the United States this winter. Based on experience gained selling wireless services targeted at the younger set in Europe, the company will rely on affiliations with chat rooms and on "viral marketing" that starts with one teen actually using Sonera's service to connect with friends, who, it hopes, will want to have the same hot technology.

Hughes says this gives a feeling of empowerment that's important to this generation. "Because information is available to them more than any generation before, they're smart, skeptical, and savvy," Hughes says. "They look at a TV ad, roll their eyes, and go on the Internet and research it. They're much more selective."

Sonera faces a tough battle entering a crowded U.S. wireless market as a newcomer with no local brand identity. Hughes is counting on that freshness to appeal to teens who have no connection to older, U.S.-born brands and who want wireless access to the same kind of instant-messaging services they depend on via PCs. "They're looking for something that's more cutting edge, catering to their specific needs and lifestyle," he says.

Sonera is targeting the 18-to 24-year-old market because that's when young buyers are most likely to buy their first cell phone. "What happens when you sell to the 18-year-old is that the 14-, 15-, and 16-year-olds tend to look up to them as role models, which will have some benefit to us," Hughes says.

Many companies like Sonera hope that building a relationship early will keep teens interested into adulthood. Yet technology can destroy those ties as easily as it creates them. E-mail marketing makes it easier to get a message out, but Avenue A's Boyer warns that young people are quick to abandon a brand they feel has taken advantage of them by marketing too aggressively, ignoring them, or betraying their trust over how personal information is used.

"Don't spoil the relationship once you have it," Boyer says. "One-to-one relationships are great, but you need to be careful not to spoil the trust."

At Vans, product presentation is considered a final stage of online brand marketing when it comes to Generation Y, often treated with an "oh yeah, this is what we sell" attitude. A recent batch of E-mails to customers promoted an online video of skateboarding champion Geoff Rowley and left it to customers to find the E-commerce on the site. The formula seems to be working--Vans reported a 23% increase in revenue to $173.9 million and a rise to $10.5 million in income for its first six months of fiscal 2001; it forecasts a 33% increase in earnings for the year ending in May.

Giles expects that E-mail and database technology will make it easier for Vans to keep a relationship alive with teens even after they've grown up. While Vans has been trying to do that for three decades, Giles now expects to use technology to reach grown-up customers at the exact moment they most need a blast from their carefree past. "In a few years, we can send them an E-mail saying 'We know you're wearing a suit and tie and sitting in an office now, but wouldn't it be great to go back to that time in your life?'" Giles says.

Vans is trying to extend relationships it worked hard to build with these demanding consumers. And it's also setting a standard that companies trying to attract these customers for the first time better be prepared to meet. IW