Key takeaways:
- The rise of “dark social” is leading brands to produce short-form content shareable on private channels like WhatsApp.
- Gen Z primarily uses social media for entertainment, so brands targeting this audience need to plug into platforms like TikTok, although advertising is still relatively pricey.
- Gaming is gaining prominence, and the social aspects of games are starting to take share from social media.
Gen Z is online, and what worked for brands reaching customers on digital platforms in the past doesn’t reflect what they need for the future.
Young people aged 16 to 24 spent an average of seven hours per day online in 2019, three of which were spent exclusively on social media, according to GlobalWebIndex. But in markets like the US, growth on platforms like Twitter, Snapchat and Facebook is slowing, while newcomer TikTok grew rapidly in 2019. And it’s not just a case of shifting marketing spend to new sites: brands now rely on influencer partnerships, paid posts and adverts between videos on YouTube. But to reach Gen Z in the online communities they engage with, unidirectional paid posts from an influencer might not work.
These changes come as advertising budgets are increasingly devoted to social channels. Digital ad spend across social media platforms will reach $517 billion globally by 2023, taking 61 per cent share of total media spend, according to eMarketer.
To connect with younger audiences, brands need to stay in tune with the changing online behaviour of Gen Z, who account for 40 per cent of global consumers as of this year.
Due to concerns over cancel culture and privacy, Gen Z is moving away from open and exposed networks to more private platforms to share content. “Dark social” networking sees users sharing content via private messaging apps or encrypted channels like WhatsApp and Telegram. It is difficult for brands to trace traffic that comes from such social networks.
“The reality is, there’s probably a lot more brand advocates for a company than they first realised because they can’t trace a lot of the traffic to where the discussions are taking place,” says GlobalWebIndex trends manager Chase Buckle. This could mean brands need to both invest their digital media dollars in larger-scale awareness campaigns on Facebook and Instagram, as well as in “below-the-line” campaigns: easily shareable digital content that leads to traction on private messaging apps.
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This kind of content is something Livity is working on increasingly with its clients, says Alan Bryant, the youth marketing agency’s head of strategy. Livity recently worked with Playstation and Giphy to create a series of Playstation-branded GIFs that could be shared via WhatsApp while users are gaming. This came after the agency observed players sending texts and GIFs to friends via WhatsApp mid-game. With the branded GIFs, Playstation could participate in those conversations on dark social, where the brand would otherwise have little visibility. The GIFs have so far garnered 1.4 billion views, according to Giphy.
Brands can also start dedicated online groups themselves to drive community, says Buckle. Independent brands and resellers, as well as startup brands like Rothy’s and Gap Inc.-owned Hill City, are already benefiting from online communities on Facebook and Instagram, which recently relaxed platform policies for group admission requests, opening them up further for more brands to partake in.
Unlike baby boomers, Gen X or millennials, who use these platforms primarily to stay up to date with people, communicate their daily lives and share opinions, Gen Z users are more likely to use social media for entertainment. “It’s a place to relieve themselves of boredom,” says Buckle.
Video is at the centre of this shift. By 2022, video will drive an estimated 82 per cent of all internet traffic, and YouTube remains the most popular social networking platform among Gen Z, according to GlobalWebIndex. Last year, YouTube hired head of fashion Derek Blasberg to boost the platform’s brand collaborations. Louis Vuitton ran a series of videos with Gen Z YouTuber Emma Chamberlain and supermodel Karlie Kloss to reach younger audiences, while also enabling purchases through clickable video ads. This strategy saw an 11x return on ad spend for the brand, although there remains white space in this area as brands prioritise Facebook and Instagram.
TikTok could also gain further traction in 2020. Because of its youth — after merging with Musical.ly, the app launched as TikTok in the US in August 2018 — it was not featured in the GlobalWebIndex data. However, 41 per cent of the short video-sharing platform’s users are aged 16 to 24, and around 30 per cent of Gen Z survey respondents who reported a “strong interest in fashion or beauty” had used TikTok in the last month.
But many marketers haven’t become experts at reaching customers on TiKTok. The platform launched its ad platform in beta in April 2019, so ads are still rare and come at premium costs of around $10 per 1,000 views (Instagram ads, on average, have a CPM of $8). To be received well, TikTok content must appear unfiltered and organic, in keeping with the democratic, audience-led video algorithm, which doesn’t prioritise videos based on the creator’s follower count.
Crocs created a TikTok account in October 2019 to reach Gen Z customers, and within a week, it had exceeded the number of the brand’s followers on Twitter by 84,000. The brand launched a TikTok challenge campaign with brand ambassador Post Malone using the hashtag #ThousandDollarCrocs, a reference to a Post Malone lyric. Michelle Poole, the brand’s senior vice president and chief product and merchandising officer, says that the hashtag has since generated 2.5 billion views. “It was absolutely staggering,” she says. “TikTok is the perfect vehicle for us to reach our consumer and have fun with them.”
While marketers still aren’t able to establish a direct link between TikTok impressions and sales, the first drop of the Post Malone x Crocs collection sold out in an hour and a half.
The gaming community has grown even further with Gen Z, particularly in Latin America and Asia-Pacific. Gen Z gamers report that they are most likely to play online because they can be their real selves without judgment, in contrast to other image-based networks like Instagram. “Gaming platforms start filling in the gaps when it comes to social experience, and they may become more like social networks in their own right,” Buckle says.
Some brands are already taking note. Nike launched a collection with Fortnite in May 2019, with branded “skins” costing $13-18 and available to the 250 million active users via a virtual drop. More recently, Louis Vuitton became the first global luxury house to partner with an esport, launching a collaboration with Riot Games’s League of Legends. The partnership features virtual clothing collections sold within the game as well as physical apparel and is designed by Vuitton womenswear creative director Nicolas Ghesquière.
Creating virtual clothing inside games drives brand awareness as well as virtual sales. Adidas, Champion and Nike have sponsored esports teams in recent years, bringing their brands to an estimated 600 million esports viewers in 2020. Louis Vuitton and Prada have used Final Fantasy characters in editorial campaigns.
Gen Z in emerging economies has come online in these markets at a time when social media use is ubiquitous as is buying online, says Buckle. “What we have found is that commerce, entertainment and social are fusing at the most rapid rate in these territories. Again, it’s Gen Z driving that trend.”
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More from this author:
Brand collaborations: What worked in 2019
Gen Z wants something very different from streetwear
In 2019, fast fashion companies grew up
A previous version of the Global Web Index chart above featured an error. This was updated on 20th January 2020.
