Until recently, Millennials (consumers aged 18-34) showed far less interest in driving and buying cars than previous generations, but that trend is shifting as more Millennials gain financial independence. When the Recession of 2008 hit, many Millennials were about to enter the workforce and begin post-college adulthood, but the failing economy, combined with massive student loan debt, halted these younger consumers from spending on big-ticket items such as cars and houses. Many Millennials opted to live in bigger cities which offered more job opportunities (and more public transportation). This deviation from the norm made auto marketers worried that Gen Y marked the end of an era and that car sales would come to a screeching halt.
Although Millennials had been dubbed the generation that killed car culture, 2015 debunked their bad rap as it was a record year for the auto industry—with sales totaling 17.5 million in cars and light trucks. Now the largest generation in the United States, Millennials contributed to a big chunk of those sales. With the economy having recovered and Millennials getting older, they are now at a place where they see more value in investing in vehicles of their own.
The Auto Upswing
Today, the car, which Millennials once deemed unattainable and unnecessary, is an affordable must-have. This is evidenced by a 28 percent spike in the generation’s share of the new car market in 2015. This was also the first time that Millennials had ever surpassed Baby Boomers in car sales in California—the country’s largest car market. While auto marketers may have previously been discouraged by Millennial’s lack of interest in automobiles and assumed that their advertising was falling on deaf ears—they are now realizing that this is the pivotal time to target this demographic. Twenty-four percent of people between the ages of 18 and 24 plan to buy a car within the next year. As they look to expand their knowledge in preparation for purchasing, Millennials need brands’ help in informing them about which cars they should be buying.
So What Does this Mean for Auto Marketers?
With consumers suffering from so much advertising fatigue, how do today’s auto marketers cut through the noise to capture attention, engage, and ensure that their digital ad spend is effective?
1. Use Video: When it comes to Millennials—video goes a long way. According to eMarketer, by the end of 2016, there will be 78 million Millennial digital video viewers, representing more than 92 percent of all U.S. Millennial internet users. This makes them the most active video viewers of any U.S. age group.
2. Minimize Frequency: Millennials can often find ads annoying and become frustrated with their frequency, which leads to the 93 percent of this group saying they use or have considered using ad blockers. Spreading out ad frequency over time and focusing on maximizing unique reach rather than higher frequency could help keep your brand fresh with this group.
3. Personalize & Engage: Millennials are also 23 percent more likely than the average viewer to enjoy an ad if they think it relates to them and 112 percent more likely to share ads they like. They also tend to be more emotionally impacted by ads, which can trigger engagement and accelerate the path to purchase. Given that the power of sight, sound, and motion engages multiple senses, video can reach the emotional core faster than any other medium. Authenticity is also an essential element that determines how video ads are received by Millennials with 74 percent reporting that they lose trust in a brand if an ad doesn’t feel real.
4. Get Social: Millennials’ social media use surpasses any other generation and reports show that drivers that prefer newer vehicles tend to consume media and use social media at higher rates. This is especially true with video. For instance, Snapchat reaches an average 41 percent of all 18 to 34 year-olds in the United States per day—not mention all of the other social channels that Millennials use such as Facebook, Instagram, Twitter, and YouTube. If video marketers go where their audiences find trusted information, they will be able to extend their reach and provide more native experiences.
5. Highlight What They Like: Seeing as technology is at the forefront of nearly every aspect of Millennials’ lives, it’s no surprise that this also affects their taste in cars. Thirty-one percent of new vehicle drivers age 34 and younger purchased their car based on the fact that it had the latest technology. In-car smartphone technology is also becoming increasingly important to Millennial buyers, so it’s important for auto brands to highlight these features in their advertising in order to stay relevant to this demographic.
Millennials are already watching videos online, so it’s up to auto brands to use this medium to their advantage to show that they understand what this generation wants to see. It’s imperative that advertisers provide an engaging experience that feels genuine. Brands also have to specifically hone in on Millennials’ wants and needs and give them a reason not to block their video ads. By understanding Millennial video-watching habits and sculpting their approach to specifically target the demographic, auto marketers are sure to connect with their newest customers.