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Generation X Generation Z Baby Boomers

The optimization generation: Wunderman shares new generational research


By Doug Zanger, Americas Editor

May 12, 2016 | 8 min read

Ah yes, the never-ending conversation about generations. Millennial this. Gen Z that. Gen X. Is that still a thing? Despite all of the conversation around the topic, Jamie Gutfreund, Wunderman CMO, shared some interesting and telling research around Generation Z that could very well shift perceptions. Done with the Berggruen Institute and conducted by Penn Schoen Berland (PSB) earlier this month, the dynamic Gutfreund revealed some of the study’s findings at Marketo’s Marketing Nation Summit in Las Vegas yesterday.

The study indicated that Gen Z accounts for 25 per cent of the US population and $44bn in spending — and that these digital dependents will, in a few years, account for 40 per cent of consumers.

Another major part of the findings indicates that Gen Z, defined as between ages 13 and 18, is more pessimistic and practical than their millennial counterparts. Gen Z also appears to be more self-sufficient and not much bothered with the prospect of taking a few lumps here and there. Additionally, the lens of parents and upbringing informs the behavior.

“Boomers — parents of millennials — their secret weapon was self esteem,” said Gutfreund. “Gen X — parents of Gen Z — their secret weapon is resilience. Millennials were told, work ‘really hard in school, then you're going to go to a really great college. Don't worry about the student debt, you're going to get a great job. Then, you'll buy a house.’ Then the recession hit and it just wiped that whole thing out so they had to off-road. Because they were so optimistic and they've been raised by their parents to believe that they could do anything or be anything, they picked it back up and went, ‘Okay, great. We're going to start the sharing economy. We're going to start traveling the world and living in our parents house to save money, but that's okay. It's not social suicide.’ They're the pivot generation. They adapted. They have a whole different orientation. Now, Gen Z comes along. They only know 9/11, they only know the recession, they only know those things and they have Gen X parents who are saying ‘okay, you’ve got to be tough. You've got to be able to go out there and get a job.”

Pessimism is an omnipresent theme in the research with its foundation likely rooted in lack of trust in just about anything, from politicians (77 per cent believe that political leaders do not have their best interests in mind) to companies (72 per cent believe that companies do not have their best interests in mind).

“They expect a value exchange for their data — it’s not a mutiny, it’s more about efficiency for this generation," said Gutfreund. "A lot of older generations look at teenagers and they say, ‘It's all going to go back to normal. They're going to get cable. They're going to stop using Venmo. It's all going to go back. They're just trying to mess things up.’ It's just because they're all about efficiency. It's not mutiny, it's efficiency. It's just better, Netflix is better. Venmo's just better, Snapchat is just an easier way to communicate. It's not mutiny, it's efficiency. It's not going back.”

With that in mind, the Wunderman research has drilled down to a more specific designation of Gen Z: The Optimization Generation.

The social contract that Gen Z expects from brands is obvious, but they are more overt about the power they actually wield. The study indicates that 3 out of 4 worry about information companies collect on them and are resigned to that being a de facto issue. However, this generation is savvy enough to know exactly what they want, and expect, from brands.

“Gen Z is saying ‘You've got my data. What are you going to do? Better make it efficient for me.' That's why I want it optimized,” noted Gutfreund. “I think for marketers, the key shift is not about more transactions, it's about making transactions easier. There's a difference. They don't want to be sold, but they also want those transactions to be much more seamless. They want it to be efficient.”

Being “sold” is also particularly troublesome for this generation, as is perfection, and brands are being told, loud and clear, what is expected of them in the way they communicate with the world.

“They want to see their world in the ad world,” said Gutfreund. “They want it to be realistic. They don't expect perfection. They don't want to see a model with their hair blowing back in a cornfield, putting on mascara. They know that's not true.”

Perfection, and failure, also plays a productive role with Gen Z. Realism and the overall thinking of “being real” permeates their lives and results in a “keep on moving” mentality.

“They don't expect perfection from themselves unlike millennials,” said Gutfreund. “It was that line, that linear path and it was so hard. If you'd got out of line it was super hard to get back into the path. If you got a bad grade or you tried something [and failed], you were thrown off track. You had to get back into that line to get into college and do that linear progression. I think that Gen Z has seen that there are all kinds of different ways that you can get to the same place. I thought about this within the context of video games. Millennials, you notice, they never died in a video game. They always had power-ups, they just kept going and Gen Z you just die quickly and just keep going.”

Despite all of the pessimism of the generation, there are some serious positives and a pragmatism that could prove to be an opportunity for the generation itself and the companies and institutions that interact with it. For example, 53 per cent of those surveyed said that they will go to college to learn skills, not study something they love. Nearly all expect to go to college, but an almost vocational approach is telling in that it belies the practicality of the generation. Moreover, 47 per cent said that working for a company that pays a lot of money is most important as opposed to those that afford work-life balance, opportunities for professional growth or creativity.

Additionally, this generation places a premium on quality, and brands that deliver stand to benefit. 82 per cent surveyed said that they would rather have quality products over “cool” products.

Another huge positive that belies the dour constitution of the generation is their awareness and connectivity to global culture. Gutfreund pointed out that the digital and real-life worlds have a greater opportunity to connect, with younger people traveling the world earlier to actually physically interact with those they meet online.

That mentality also plays into the collective future of the planet. 71 per cent agreed that they can make a “big impact in the world” and 84 per cent of those surveyed drilled down even deeper, saying that they could have a “big impact in their local communities”, tackling issues such as helping the poor, saving the environment and ending homelessness.

“I'm very bullish on Gen Z about this,” noted Gutfreund. “Gen Y wanted to save the world, I think Gen Z is practical enough to do it. I always say millennials will be the renters and Gen-Z will be the landlords, but I think Gen-Z doesn't necessarily want to save the world in the same way that millennials do. Success follows money, change follows province.”

As is the case with this generation, Gutfreund says that companies, corporations and brands have a role and responsibility on how future global stewardship plays out.

“Milton Friedman, the economist says, ‘The purpose of a public company is to maximize profit for shareholders.’ Gen-Z is not going to support a company like that because they're going to look for consistency of information. Remember, they don't want to be lied to, they want to know you are what you say you are. Jack Ma (founder of Alibaba) actually has said the priorities for a company are 1) consumers, 2) employees, and 3) shareholders. Gen Z is going to look at those three pillars and to see if it makes sense. The companies that do all three things will be the ones that succeed — supporting those companies that actually are consistent and their employees are happy and take care of their consumers will appeal to Gen Z much more. They'll feel better that they're going to live up to what they're saying. I think it's more of a practicality that will enable them to support companies that ultimately have a big impact on improving the world.”

This webinar will be a major first step towards making brands more relevant to Gen Z. To register for it, click here

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