Millennials don't buy from targeted ads

Millennials Reward Brands, Not Ads, on Social Networks

Most of the advertising on social networks aimed at Millennials is a waste of money. New research indicates that 71% of Millennials are not likely to buy from targeted, paid advertising that comes in their social network feed. Instead, they will buy from brands they like.

Thus, it’s essential for marketers to create social commerce programs — the intersection of e-commerce and social networking sites — that will increase engagement with this powerful buying group that recently surpassed Baby Boomers as the largest generation in the United States.

This latest study of Millennials from UMass-Dartmouth, is an in-depth look at current purchasing habits and trends of Millennials using three of the most widely used social media platforms: Facebook, Twitter and Pinterest. Instagram (owned by Facebook) was included due to its rapid rise in popularity among Millennials to explore its viability as a social commerce site.

Highlights of the Study

These are the key findings:

  • Likes, follows and pins are significantly related to subsequent purchases on the platform. This makes brand involvement central to the sales effort on social networking sites.
  • Even though Instagram is not yet an active social commerce site, 40% of Millennials follow companies/brands on the site. Great potential exists for buying products on Instagram.
  • While companies move to increase their paid social initiatives, data is now available to indicate that 71% of Millennials are not likely to buy from targeted, paid advertisement that comes in their social network feed.
  • Eighty-five percent of Millennials on Facebook and 80% of those on Twitter state the top motivator for liking or following a company/brand is to support the company/brand they like. Pinterest users are motivated to share interests/lifestyle ideas with others.
  • Millennials are more likely to be converted to a sale if a coupon or discount is offered on a social networking site. While this study focuses on Millennial online behavior from liking, following and pinning companies/brands to making purchases (online or offline), we continue to inquire about the interest in “buy” buttons on Facebook, Twitter and Pinterest (which has experienced success with their buyable pins).

Facebook is the most popular Millennial platform for businesses with 56% of Millennials liking companies/brands on that site, followed by Instagram at 40%, Twitter at 17% and Pinterest at 14%.

When asking Facebook users why they “like” a company/brand, respondents said it is to support the brand they like, receive regular updates or get a coupon or discount.

Instagram Goes Native

As I wrote in a post two years ago, native advertising is designed to generate more consumer engagement, often through the use of celebrities or other influencers. The thinking is ads that seem to be part of the editorial content of a magazine or newspaper will have more appeal to Millennials and other buyers and increase their brand loyalty.

Since then, however, the Federal Trade Commission has issued warnings to dozens of brands and social media influencers for failure to clearly disclose their relationships with brands and products they’re promoting.

Just recently, in a move to be more transparent, Instagram announced that it will begin to roll out native advertising with a sub-head that reads “Paid partnership with.” This will make it clear to readers that the post they are seeing is actually paid advertising.

Will this detract from the brand? Will knowing that a post is actually an ad turn off Millennials? Will it reduce a buyer’s “liking” a brand?

It’s too soon to know, but brands will need to explore how they can engage Millennials, not only through social commerce, but offline in public relations and promotional campaigns.

 

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Comments

  1. Hi Jeannette. Stopping by from BHB on LinkedIn. Thanks so much for sharing this post. It’s fascinating how the cards have changed in terms of trying to figure out how to market to Millenials, when they have more control over how they want to follow, where they want to follow, and when they want to follow their favorite brands. So much of that loyalty is driven by identifying with the brand messaging and the community, let alone liking a product or service.

    • Right on target, Tatia. Millennials are in control — they have the buying power and brands will need to communicate, not on their terms, but the way that Millennials want to be talked to.

  2. Hi Jeannette, I think I left the workforce too early. It really takes a different mindset to realize that branding – what your company stands for – rather than paid advertising is the new market approach. I like it because it means that customer service (keeping a good reputation) is going to play a bigger role in business and to me that has always been the most important approach.

    • Couldn’t agree more, Lenie. A brand needs to stand for honesty and customer service. Without that, a brand and the company behind it will not survive.

  3. Very interesting – and useful – information Jeannette. As far as native advertising goes, it’s good to know there’s going to be more accountability. I don’t mind reading a sponsored post or article as long as I know that’s what it is. In terms of social media, I’m in maintenance mode through the end of July because I’m busy finishing a book and developing a new course, but I definitely plan to dive back into it all in earnest when I come up for air. Thanks for the inspiration!

    • Marquita — I think native advertising had gotten out of hand. There is something basically dishonest about presenting a story as what’s called “earned media” — not paid for — when it’s actually paid advertising and not the third-party endorsement of the media that people are counting on for the truth.

  4. Being more of an introvert as you know Jeannette, I am not at all swayed by celebrities. Then again, I’m also NOT a millennial!

    Interesting study. And I find with this, “Millennials are more likely to be converted to a sale if a coupon or discount is offered on a social networking site.” … I too as a baby boomer am swayed by coupons and discounts! Ever heard of Scottevest? I don’t remember how I heard of them let alone got on their subscriber list. But with all the pockets in their jackets and vests for people who travel a lot, like my husband and I do now a days, I finally took up one of their discount offers.

    My point in saying all this, I wonder how much of this study could also be applied to other groups of people?

    Thanks for always posting interesting content.

  5. When it comes to advertising I have been thinking like millenials as long as the internet has existed. Being, often wrongly, targeted by advertisers trying to sell me something really annoys me. The same applies to pop-ups. And I’m of the same opinion as millenials when it comes to liking a company/brand on social media.

    • Catarina — obviously pop-ups work because even the experts use them. But I, too, find them annoying.

  6. Sometimes, I get so frustrated. You learn one way of advertising, one way that is proven to get more attention. Then it changes.
    I guess it is never ending, and each generation finds its own way.
    Thanks for enlightening us with this information, it is helpful.

    • William — yes, social media was supposed to be the new channel to reach consumers with your advertising. Now that’s a question mark.

  7. That clarifies a lot about the intention of these sites and the millennials who dominate them. I find it all very intriguing–how buying changes. Just was somewhere and saw an original Sears catalogue from the 1940s. Yep, buying has changed.

    • RoseMary — actually, I think the more things change the more they stay the same. Sears dominated the catalog business but they didn’t leverage the power of the internet to transfer their catalog online — not with any success, in any event.