Four Key Advertising Factors When Speaking to Gen Z

NEW YORK — Generation Z is the first to be digitally native and what's driving the cohort's brand loyalty is shopping and advertising preferences.

Nearly six in 10 members of Gen Z (58 percent) don't like advertising that interrupts the content they're enjoying vs. 38 percent of baby boomers. At the same time, more than half of Gen Zers (52 percent) say they'll engage with creative and entertaining ads, compared to 42 percent of boomers, according to a new consumer sentiment survey commissioned by NCSolutions (NCS).

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Generation Z (sometimes called zoomers), born between 1997 and 2012, is now flowing into the workforce and represents significant spending power in the consumer packaged goods (CPG) marketplace. Gen Z households spend an average of 12 percent more on consumer packaged goods than all other households, according to NCS purchase data.

Here are the four advertising factors that are driving the cohort's buying decisions:

A social and sustainable mindset drives brand loyalty.

Gen Zers prefer brands whose missions align with their values and are more willing to support and be loyal to purpose-driven brands. Thirty percent of Gen Zers value brands that prioritize the environment, compared with 15 percent of baby boomers, and 27 percent of Gen Z will stay with brands that use sustainable packaging vs. 18 percent of baby boomers.

As a result, Gen Z is less concerned than other generations about being loyal to brands that provide the best quality or value for their budgets. For instance, fewer Gen Zers (59 percent) find the quality of a brand important than boomers (75 percent). Boomers also believe value is more important (79 percent) to them than zoomers (68 percent).

[Read more: Majority of U.S. Consumers Will Pay More for Sustainable Products]

"Gen Z undoubtedly will raise the bar for CPG brands, as they differ from older generations in some meaningful ways. Having grown up with — not alongside — the internet, they are used to having instant access to information, products and services. They bring to the marketplace a fully informed and defined point of view about advertising and brands," said Alan Miles, CEO of NCSolutions. "That presents both an opportunity and a risk for brands, which is why we conducted this analysis. The findings will support brands as they consider how best to connect with and build relationships with this generational force."

Unobtrusive, funny and social ads connect.

More than other generations, Gen Z is most engaged when advertising is humorous or entertaining. Almost six in 10 (58 percent) dislike ads interrupting their content. More than half (52 percent) prefer creative and entertaining advertising, while only 42 percent of baby boomers, 44 percent of millennials and 40 percent of Generation X agree.

Brands that tickle the funny bone are more likely to capture Gen Z's attention, NCS found. Forty-three percent say they prefer ads to be humorous. Ads with a social message also resonate well with Gen Z; 17 percent like ads when they are aligned with the social messaging of the ad compared with 6 percent of baby boomers.

Social media sways decisions.

Zoomers are most receptive to advertising that appears in social media feeds, much more so than ads that appear on either cable TV or broadcast television. Nearly three in four Gen Zers (72 percent) say they're open to seeing ads in their newsfeeds vs. 28 percent who say they're receptive to ads on cable TV and 20 percent who say they're open to broadcast TV advertising.

Conversely, 19 percent of baby boomers are more receptive to ads on social media vs. 58 percent who say they're receptive to broadcast TV advertising and 45 percent to cable TV ads.

"The economic impact Gen Z will have in the coming years makes understanding what makes this generation tick particularly significant for brands' long-term marketing strategies," said Miles. "The purpose-driven mindset and significance of social media in the lives of zoomers are notable differences."  

Zoomers love convenience.

The analysis also found the younger generation values convenience in several different ways. Fifty-five percent of Gen Z keep frozen meals on hand compared to 49 percent of older generations. Twenty-two percent of Gen Z shop for food items at convenience stores, and 18 percent look for food products in drug stores. At the same time, only 8 percent of Gen X shop for food at a c-store and 6 percent seek food products at a drugstore.

The convenience factor also applies to eating patterns for Gen Z. Just more than half (51 percent) are frequent snackers compared with 42 percent of baby boomers. One-fifth are meal planners, while 34 percent of baby boomers plan weekly meals.

[Read more: Value of Convenience Crosses Generations]

"Creative executions and advertising platforms that worked for previous generations may not drive the same sales impact for Gen Z consumers," said Miles. "Marketers will need to test, measure and learn to understand what messages, platforms and creative work best for their brand. Although zoomers have a different set of expectations than previous generations, the fundamentals of effective advertising remain the same."

NCS conducted an online survey of 2,186 consumers in February. Half of the respondents are from Gen Z, with the other half split among baby boomers, Generation X and millennials. The full report is available for download.

New York-based NCSolutions is a leading company for improving advertising effectiveness for the CPG ecosystem.