Young Adults' Preferences Don't 'Echo' Boomer Parents'

  Many consumers in their 20s drawn to snowboarder celebrities and hot new technology may view getting the new Apple iPhone as their most-important acquisition this summer. But credit card marketers also are hot on their trail.
  The challenge is, how do card marketers compete in a market in which young consumers value a device that delivers "all-in-one" features and is most likely to connect to the world through YouTube.com?
  Some consumers in this segment already have an eye out for card products. Tim Malcolm, a 22-year-old journalist who writes an online diary, or blog, on the 20-something generation for NorwichBulletin.com, a regional newspaper Web site in Connecticut, believes consumers his age already are prepped for credit cards.
  "Between iPods and computers and video players and credit cards, what we own, what we are, is plastic. It's disposable, but it has value," Malcolm says.
  Card-industry players American Express Co., MasterCard Worldwide and Visa USA all are using such 20-something cultural phenomena as celebrity status, text messaging and Web channels to reach young adults. Major card issuer Chase Card Services, the credit card division of JPMorgan Chase & Co., also is in on the game with a strategic marketing presence on social networking site Facebook.com.
  But are the so-called "Echo Boomers" listening? They are marketing-savvy, and coming on too strong or too artificial will turn them off, experts say.
  The young-adult market (consumers ages 18 to 34) is a powerful economic force, as it represents 30% of the adult population, according to a report by Chicago-based Mintel International Group "Marketing Financial Services to Younger Consumers." Susan Menke, Mintel senior financial services analyst, says card marketers need to "keep it real."
  "This consumer segment can see right through a lot," she says. "You might as well tell them up front what [your marketing] is about. If you don't, you're going to lose their interest."
  One potential way to reach young consumers is by cellular phone. A recent Gallup poll seeking to determine how best to market to young consumers found that 95% of consumers ages 18 to 25 have a cell phone, and 36% use text messaging regularly.
  Recognizing the growing power of cell phones for marketing to younger adults, Visa in 2006 used the Reuters screen in New York's Time Square to prompt mobile-phone users to call a toll-free number to play such interactive games as National Football League trivia and Rock'Em Sock'Em Robots.
  "We do that to fuel the interest of the audience," says Michael Rolnick, a Visa spokesperson.
  The "Life Takes Visa" marketing message also shows up in streaming ads for MobiTV, a cell-phone service that provides live television to mobile phones.
  And Visa is utilizing its many sponsorships. The card organization, for example, has a deal with WeatherBug.com, an online provider of weather forecasts, to receive NFL-stadium weather reports via text message.
  Relating to the young crowd is important, and card companies are using young, "hip" spokespersons to promote their brands.
  World champion BMX bike racer Bubba Harris, in addition to young Olympic celebrities, are the young faces of Visa, for example. Visa is building its marketing for the 2008 Olympic Games in Beijing, China, by using such spokespersons in online ads, in online blog diaries and at public appearances, says Rolnick.
  AmEx also is touting younger faces, using TV ads and a Web site that feature Shaun White, who won a gold medal in snowboarding in the 2006 Winter Olympics and is dubbed the "Flying Tomato" because of his bright red hair.
  AFTER THE 'IN' CROWD
  "This is a little more down to earth. Instead of Robert DeNiro, you have a snowboarder who looks like your buddy," says Megan Bramlette, Auriemma Consulting Group associate.
  Diego Scotti, AmEx vice president and head of global advertising, stresses that AmEx's goal is not just to target younger consumers but also to continue a broader strategy to attract affluent cardholders. Scotti says the online effort to reach younger adults is the main component of its IN city cards. The city-specific IN:Chicago, IN:LA and IN:NYC rewards cards launched in 2005 give young consumers a taste of what they can get by having an AmEx card.
  For example, last year the IN city card program sponsored a concert by hip-hop artist Kanye West and broadcast the U.S. Open via satellite in Rockefeller Center. The cards are advertised in places where bloggers-individuals or groups who create Web logs online-talk about events in that city.
  "That's where these people go to get the insight, and the card becomes an enabler of experience," Scotti says.
  Tapping into the Internet also is essential in reaching young consumers. According to Gallup research, 25% consumers ages 18 to 25 have a personal Web page; 23% are writing online diaries, or blogging; 37% read others' blogs; and 41% use social-networking sites, such as Facebook and Myspace.com.
  Playing to the YouTube crowd, MasterCard this spring held a "Priceless"-themed video contest online that gave consumers a chance to submit their own "priceless" videos of something going on where they live. The winner, to be announced this summer, will become a correspondent and blogger for the Priceless.com Web site in five different international locations.
  "There has been a groundswell of interest in consumer-generated media, and we've created a platform for them to do it," says Chris Jorgis, MasterCard vice president of U.S. brand development.
  MasterCard also has run in past years the "Priceless Experience" program, which helped younger consumers get coveted internships in such tough-to-crack job markets as music, sports and television, Jorgis says.
  This tactic plays into current trends. Teresa Tschida, Gallop Organization global practice leader for the financial-services industry, says younger consumers are focused on developing work experience through internships and volunteer work.
  "We're trying to build a brand relationship with young adults by communicating with them in a relevant way," says Jorgis. "The more there is engagement with MasterCard, the more they can develop an emotional bond to the brand."
  Chase Card Services also is making the most of the Internet connection with younger consumers, namely the Facebook.com social networking site. Thousands of students and graduates use Facebook to meet online and keep in touch with each other.
  "It's important to reach young consumers where they are," says Kathy Witsil, Chase senior vice president.
  Chase developed a strategic partnership with Facebook in 2006 to create a Web page called Chase + One, which is a points program through which visitors can earn "Karma points" based on activities they complete, such as a credit-education quiz. Visitors to the page also can view promotional offers, such as Six Flags tickets; peruse credit card offers; purchase items with their Karma points; pass their Karma points to friends; or give points to a charity.
  "Young consumers on the Web expect to interact," says Stacy Hamilton, Chase senior vice president of development and marketing. Consumers can download music and ringtones on iTunes and from Chase's Freedom Web site. The site features renditions of the Rolling Stones song "Freedom" by Moby, Fatboy Slim and other artists.
  GOING FOR 'GREEN'
  In terms of card features, many in the younger-consumer segment prefer rewards and cards that do something good for the world around them. Menke says Mintel's research suggests that younger consumers are interested in environmental or "green" causes.
  "No one will be shocked that green marketing is hot," she says. "There are a lot of other causes this group is interested in. What the card companies need to do is hire these young people and listen to what they want."
  For causes, Chase offers the popular World Wildlife Fund affinity card, which donates 1% of purchase amounts to the fund. Chase contributes $50 for each new account that is activated online.
  AmEx also taps into the rewards and cause mix. As part of its IN city cards, AmEx offers special Inside rewards, such as gift certificates for more than 70 establishments in New York City, including trendy lounges and restaurants.
  AmEx also recently launched the Members Project, which enables cardholders to vote on which of the top 50 projects proposed by members AmEx would fund with up to $5 million. The card company is donating $1 for every cardholder who registers for the program.
  Bramlette says the younger- consumer market is much more careful about which marketing it responds to, including credit card solicitations. "They have a lot more consumer information out there, and they have a pretty sophisticated way of sorting through all the junk," she says.
  And the proof? Malcolm says he has been given multiple offers from Bank of America to open a card account. "They've been telling me I have good credit and good standing with them. They make you feel important, like you've excelled in something," he says.
  Card marketing to the younger generation is becoming more targeted to the generation's cultural habits. "We have to make sure it's relevant and that there's a reason to be there," says Rolnick, "If you don't make the first entrée credible, they will shut you out."
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