Global Trend

The On-Line Generation

It¡¯s no secret that the Millennials ? the 70 million Americans born since 1982 ? are a powerful force in the economy. These young consumers have more disposable income than any previous generation in history. One of every three high-school seniors carries a credit card, and today¡¯s teenagers and college students enjoy a combined spending power of $375 billion, according to data from Alloy Media and Marketing, as reported in BusinessWeek.

What has been a mystery until now has been how to reach them with advertising messages that won¡¯t be ignored like an MP3 player that isn¡¯t an iPod. However, a small but growing number of savvy marketers are realizing the enormous potential of on-line social networks to achieve this goal.

As the first generation to grow up with iTunes, blogs, e-mail, and instant messaging, Millennials are more comfortable on-line than their parents or older siblings. Millions of high school and college-aged Americans are staying connected to each other by using on-line social networks. These networks are shaping new forms of social behavior in the first generation ever to begin using them as children. These users are distinct from adults, who view the Web as a tool to supplement their daily activities. Adults make purchases, check the news or weather, or send e-mails.

But many of the Millennials actually live on-line part of the time. Nearly 90 percent of 12- to 17-year-olds use the Internet now, according to the Pew Internet & American Life Project. Teens between the ages of 15 and 18 spend six and a half hours a day either on the Net, playing video games, or watching TV, according to a survey by the Kaiser Family Foundation.

As technologies converge, these technologies will all become one seamless on-line stream of content. At present, those youths are using on-line social networks nearly 90 minutes each day, which represents the largest growth in Internet usage, up 300 percent in the last five years.

The three top sites, ranked by their number of users, according to BusinessWeek, are:

- MySpace.com, with 40 million users.
- Xanga.com, with 6.4 million users.
- Facebook.com,with 4.2 million users.

MySpace.com was the 15th most-visited Web site last October according to Nielsen//NetRatings, when it accounted for 10 percent of all the Internet ads viewed on-line during that month. It has surpassed eBay, Google and AOL in number of page views. At MySpace, members can join groups that revolve around music, sports, religion, or other mutual interests.

In addition, more than 350,000 musical groups and solo performers have created pages at MySpace, where members can preview their new songs, send messages to the musicians, and see schedules of upcoming concerts, according to The Los Angeles Times. Roughly half of the users are between the ages of 12 and 24.

Xanga.com describes itself as a community of on-line diaries and journals. Teens use the site to post blogs and to upload photos to share with their friends.

Facebook.com targets a slightly older membership. Most of its users are enrolled in colleges. Harvard student Mark Zuckerberg founded Facebook as a way for college students to connect on-line. It now has 1,500 colleges in its network, and students can make friends on other campuses, post reviews of classes, and join groups that revolve around shared interests.

In addition, there are about 300 smaller social networking sites, including Classface.com, Buzz-Oven.com, and Photobucket.com.

However, the popularity of social networks has led to problems. According to The Boston Globe, at Newton North High School in Newton, Massachusetts, the principal blames several fights at the school on exchanges that began between students on MySpace the previous night.

And high school and college students are not the only users of the site. While members of MySpace are required to check a box to indicate they are at least 14 years old, there¡¯s no way for the site to verify that younger users aren¡¯t lying about their ages.

The site is wildly popular among children in grammar schools, with 11-year-olds pretending to be in their 20s, according to The Los Angeles Times, which asserts that MySpace and other social networking sites are ¡°helping to spawn a generation of uninhibited liars.¡±

Even worse than the children who post dishonest profiles are the members who give out too much real information. Some list their personal data on-line ? including height, weight, last names, hometowns, workplaces, schools, and phone numbers. Other members post photos of themselves in their underwear.

All of this can make the youths easy targets for criminals. The Los Angeles Times cites two recent examples in which teenaged girls were sexually assaulted by men who found them through their profiles on MySpace.

Despite the risks and problems associated with on-line social networks, they continue to grow dramatically, often doubling in the number of users in a matter of months. At the same time, this growth has caught the attention of media corporations and venture capitalists. Rupert Murdoch¡¯s News Corp. recently spent $580 million to buy Intermix media, the parent company of MySpace, according to The Los Angeles Times.

Similarly, Facebook and other social networks have attracted millions of dollars in venture capital from firms like Accel Partners and Redpoint Ventures. Yet, despite its VC funding and a staff of 50, Facebook hasn¡¯t turned a profit.

Looking forward, we offer the following three forecasts:

First, a big opportunity for marketers for the next few years will be to reach young consumers at social networks like MySpace. By building brand awareness among people in their teens and 20s, companies can attract some of the billions of dollars in disposable income this generation spends. And, if firms can also get the members of a social network to discuss their products favorably on-line, they can build even more credibility for their brands. For example, the Walt Disney company promoted its movie The Hitchhiker¡¯s Guide to the Galaxy on Xanga.com by creating blogs for the characters in the film. Five thousand users signed up as subscribers to read the blogs and add to them, resulting in a total of 220,000 page views, according to BusinessWeek. Facebook.com invites companies that sell the products its members use to sponsor groups on the site that focus on those products. For example, Apple sponsors a Facebook group that discusses how to use their Macs and iPods. The company gives away prizes, announces new products, and alerts the members to new promotions such as student discounts. For companies like Apple ? as well as other sponsors of groups, such as Electronic Arts and Victoria¡¯s Secret ? this innovative marketing approach is more successful than buying banner ads. Young consumers are more likely to be persuaded by their peers to buy a product than they are to be influenced by a pop-up ad.

Second, companies will have to develop new strategies for creating their own social networks. So far, all of the attempts have failed. Procter & Gamble tried to build a network that revolved around Sparkle body spray, and failed. Few people joined. Now, according to BusinessWeek, the company is having more success by sponsoring a network within MySpace that is built around the product.

Third, the youth-oriented sites like MySpace and Facebook will leverage the power of their social networks by expanding into other media. According to The Wall Street Journal, MySpace has already launched a music label, MySpace Records, to develop and promote new bands. The site¡¯s founders told BusinessWeek that they plan to extend the brand into movie production, satellite radio, and wireless technology.

References List :
1. BusinessWeek, December 12, 2005 ¡°The MySpace Generation,¡± by Jessi Hampel with Paula Lehman. ¨Ï Copyright 2005 by The McGraw-Hill Companies. All rights reserved. 2. To access their report on generational on-line use, visit the Pew Internet & American Life Project website at: www.pewinternet.org/pdfs/PIP_Generations_Memo.pdf 3. To access their report ¡°Generation M: Media in the Lives of 8 - 18 Year-Olds,¡± visit the Kaiser Family Foundation website at: www.KFF.org/entmedia 4. BusinessWeek, December 12, 2005, ¡°The MySpace Generation,¡± by Jessi Hampel with Paula Lehman. ¨Ï Copyright 2005 by The McGraw-Hill Companies. All rights reserved. 5. The Los Angeles Times, July 19, 2005, ¡°News Corp. to Acquire MySpace,¡± by Chris Gaither and Sallie Hofmeister. ¨Ï Copyright 2005 The Los Angeles Times. All rights reserved. 6. The Boston Globe, December 8, 2005, ¡°Websites Power to Overexpose Teens Stirs a Warning,¡± by Matt Viser. ¨Ï Copyright 2005 by New York Times Company. All rights reserved. 7. The Los Angeles Times, December 19, 2005, ¡°The Pretenders,¡± by Robin Abcarian. ¨Ï Copyright 2005 by The Los Angeles Times. All rights reserved. 8. ibid. 9. The Los Angeles Times, July 19, 2005, ¡°News Corp. to Acquire MySpace,¡± by Chris Gaither and Sallie Hofmeister. ¨Ï Copyright 2005 The Los Angeles Times. All rights reserved. 10. BusinessWeek, December 12, 2005, ¡°The MySpace Generation,¡± by Jessi Hampel with Paula Lehman. ¨Ï Copyright 2005 by The McGraw-Hill Companies. All rights reserved. 11. The Wall Street Journal Europe, November 3, 2005, ¡°MySpace.com to Launch a Record Label of Its Own,¡± by Ethan Smith. ¨Ï Copyright 2005 by Dow Jones & Company. All rights reserved. 12. BusinessWeek, December 12, 2005, ¡°The MySpace Generation,¡± by Jessi Hampel with Paula Lehman. ¨Ï Copyright 2005 by The McGraw-Hill Companies. All rights reserved.