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Digital marketing strategies that Millennials find appealing, motivating, or just annoying.



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ABSTRACT:
With the increasing usage of digital media by consumers, more companies are using digital marketing to reach their target markets. The purpose of this study is to examine various marketing strategies that are commonly used in digital media and ascertain which ones are preferred by Millennials and are effective in influencing behavior. Millennials have been identified as a driving force behind online shopping. While there have been numerous studies about online advertising, there has been little academic research focused on what types of digital marketing strategies are preferred by Millennials and which ones influence their behavior. A survey of 571 Millennials indicated a preference for online coupons and side-panel ads; Millennials do not like pop-up advertising. Graphics are highly effective in grabbing their attention. Millennials will repeatedly visit a website that has competitive prices and good shipping rates. If given an incentive, such as a discount or reward, Millennials will write an online product review.
Why digital marketing and why Millennials? With the increasing usage of digital media by consumers, more companies are using digital marketing to reach their target markets. By the end of 2010, the number of Internet users around the world will exceed 2 billion (Internet World Stats, 2010) and this vast information traffic will continue to double every 1–1.5 years (Kaynar & Amichai-Hamburger, 2008). Digital marketing is the practice of promoting products and services using digital distribution channels. Digital marketing is also referred to as e-marketing and includes digital or online advertising, which delivers marketing messages to customers. Companies are expected to spend more than $60 billion on digital advertising by 2011 (Lane, 2008). Reaching consumers through digital media is considered to be the most promising field of development for marketing in the upcoming decade (Okazaki, Katsukura, & Nishiyama, 2007). The purpose of this study is to examine various marketing strategies that are commonly used in digital media and to ascertain which ones are affective and which ones are detrimental for the marketer. This paper specifically addresses the preferences of Millennials and the digital marketing strategies that influence their behavior. Millennials, also called Generation Y, are an essential ingredient in the development of e-commerce. Having grown up socializing and making purchases online, this generation’s usage of e-commerce will continue to grow along with its discretionary income. ISSN 0965-254X print/ISSN 1466-4488 online q 2011 Taylor & Francis http://dx.doi10.1080/0965254X.2011.581383 http://www.tandfonline.com *Email: ksmith[at]mays.tamu.edu Katherine Taken Smith is now affiliated with Murray State University, Murray, KY, USA. Journal of Strategic Marketing Vol. 19, No. 6, October 2011, 489–499 Computers and mobile phones are commonplace tools for Millennials; you might even call them essential. Ninety-seven percent of Millennials in the USA own a computer and 94% own a mobile phone (Marketing Breakthroughs Inc., 2008). Millennials access digital media on a daily basis and have the ability to communicate and purchase from a supplier anywhere in the world. Due to their familiarity and usage of digital media, they have been identified as a driving force in online shopping. The Internet, social networking, and inter-active technologies are empowering Millennials to be more active in the creation and advancement of products and brands. Word-of-mouth goes around the world these days. This generation wants to have input regarding all aspects of a product, even its promotion. Successful marketers should realign their techniques in order to positively engage these vocal consumers. Internet-empowered consumers are ready to ‘jump on the bandwagon’ if the digital message appeals to them, or shun a product if the message annoys them. Digital marketing may be facing a black cloud on the horizon. There is mounting concern that consumers find some forms of digital marketing to be intrusive and thus annoying. Messages that interrupt a consumer’s online activity create feelings of ill will toward the brand. Past research confirms that consumers have developed negative attitudes toward digital marketing that they consider intrusive (Li, Edwards, & Lee, 2002; McCoy, Everard, Polak, & Galletta, 2007; Ranchhod, 2007). There is a need for further research that identifies digital marketing strategies that attract and engage consumers, rather than annoy them. Various forms of digital marketing strategies currently being used are examined in this study. The strategies were selected based upon exploratory research using 70 Millennials. This group listed the most common marketing strategies they encountered online. The strategies relate to online advertising and website features. The specific online advertising strategies examined in this study are: pop-up ads; sidepanel ads; coupons; email updates; YouTube videos; and advertising in the form of a game. The website features examined in this study are: layout; graphics; personalization; rewards; interactive; offering free items; shipping; pricing; and return policy. This study asked Millennials to name the marketing strategies that websites should avoid using. The following list of annoying digital strategies was evaluated: pop-ups; flashing items; links to sponsors; mandatory software downloads; and un-closable browser windows. Since online reviews influence the buying behavior of Millennials, marketers would be wise to solicit reviews for their product or company. This study uncovers the marketing strategies that are successful in motivating Millennials to write online reviews. A survey of 571 Millennials was made to gather data for the study. Results indicate that Millennials prefer certain forms of online advertising, while finding others annoying. Results also indicate that there are digital marketing strategies that are considerably more effective than others in grabbing the attention of Millennials, motivating repeat visits to a website, and soliciting online reviews.
k. Believing that Millennials favor advertisements that are the less intrusive and have an aversion to forced ads, hypotheses 1 and 2 were formulated. H1: Millennials prefer side-panel ads. H2: Millennials do not like pop-up ads. One of the most valuable benefits of using digital media is the capacity for a business to offer consumers a personalized relationship. Since Millennials have the desire to feel special, hypotheses 3 and 4 were formulated accordingly. H3: Personalized digital marketing is the most successful at grabbing the attention of Millennials. H4: Personalization is the most effective strategy for prompting Millennials to repeatedly visit a website. Personal gain has always been a motivating factor in people’s lives. Marketers are leveraging this human trait by offering incentives to consumers who will write an online peer review. With this in mind, hypothesis 5 was formulated. H5: Millennials are motivated to write peer reviews if there is a personal benefit involved. Survey results and discussion of findings To determine which digital marketing strategies are preferred by Millennials and are effective in influencing behavior, 571 Millennials at a prominent south-west US university were surveyed in spring 2009. The respondents were students between the ages of 18 and 23. The exact birth years signifying Generation Y (also known as Millennials) will vary depending upon the source, but all groupings include the six-year span represented in this survey. Males accounted for 43% of the respondents, while females accounted for 57%. H1: Preferred forms of online advertising Common forms of digital advertising were analyzed, specifically, pop-up ads, side-panel ads, coupons, email updates, advertising in the form of a game, and video advertisements. Respondents were allowed to select three types of advertising that they most prefer. Results strongly supported hypothesis 1: Millennials do prefer side-panel ads. However, they also strongly favor coupons. Over 70% of respondents chose these two strategies as their preferred means of digital advertising. Approximately half of the respondents prefer advertising on YouTube and email updates. Almost 40% favor advertisements in the form of a game. By far the least favorite type of digital advertising is pop-up ads. Less than 4% of the respondents like pop-up ads. In fact, as will be seen from a later question, Millennials find pop-up ads to be annoying. This is consistent with past research on pop-up advertising. Table 1 summarizes findings regarding online advertising. H2: What to avoid in digital marketing Results strongly supported hypothesis 2: Millennials do not like online pop-up advertisements. To determine which digital marketing strategies Millennials dislike, 494 K.T. Smith survey participants indicated their level of agreement to a series of statements. Responses were made on a Likert scale, with 1 representing ‘strongly disagree’ and 5 representing ‘strongly agree’. Respondents were given statements concerning five digital marketing strategies. Responses revealed that pop-up advertising is not the only digital marketing strategy that marketers should avoid. Results of a one-sample t-test indicate that all statements were associated with means significantly different from neutral (3). Four of the statements had means greater than 4.0, showing a strong opinion to avoid using that digital marketing strategy. The other strategies that Millennials definitely dislike are: un-closable windows; mandatory downloads; and flashing items. A marketer would do well to avoid using these features on a website. Findings are summarized in Table 2. H3: Digital marketing that grabs attention While 46% of the respondents said that personalization on a website grabs their attention, personalization was not the most effective strategy in this endeavor. Thus, hypothesis 3 was not fully supported. The digital marketing strategy that overwhelmingly grabs the attention of a Millennial is the use of graphics. Respondents were asked to look at a list of website features and select up to three features that were most likely to grab their attention. Graphics capture the attention of 73% of the respondents. Approximately half of the respondents said that interactive features and bright colors seize their attention. A simple, professional layout captures the attention of 43% of the respondents. As shown in Table 3, the least attentiongrabbing feature is the use of the word ‘free’. However, the word ‘free’ does serve a purpose, as identified by the next survey question; free gifts will prompt repeat visits to a website. H4: Digital marketing that prompts repeat visits Loyal customers have always been the backbone of a business. There are many ways to motivate Millennials to repeatedly visit a website. Unlike the findings of the first two survey questions, there is not a single overriding approach for soliciting repeat visits. Hypothesis 4 stated that the most effective strategy for prompting repeat visits is personalization, but hypothesis 3 was not fully supported by the survey results. Even though personalization was effective on almost half of the respondents, other incentives are more successful in prompting repeat visits. The two most popular incentives, chosen by almost 70% of the respondents, are competitive prices and good shipping rates. As shown in Table 4, there are a variety of incentives that will solicit repeat visits by Millennials. Slightly over half of the respondents accredited their repeat visits to coupons, free gifts, and rewards for returning customers. Table 1. Preferred online advertising. Type of advertising % of respondents Coupons 73.6 Side-panel ads 70.3 Ads on YouTube 52.5 Email updates 51.1 Ads in game form 39.1 Pop-up ads 3.7 Note: Total does not add up to 100%; respondents could specify up to three choices. Journal of Strategic Marketing 495 Respondents were given a list and asked to choose up to three items that have an effect on their decision to repeatedly visit a website. Slightly less than half of the respondents said that updated product information and a favorable return policy prompts them to repeatedly visit a website. Even though an interactive website grabs the attention of half the Millennials, as discussed in Table 3, interaction prompts repeat visits from only about athird of the respondents. The feature that solicits the least repeat visits is email updates.
H5: Online reviews Millennials often look to peers to determine the merit of a product. One way to increase product awareness, build a reputation, or gain customers is to have Millennials write online reviews (assuming they are positive reviews). So, how does one motivate a Millennial to write a review? Findings show that there are several effective motivators, all of which involve a personal benefit, thus, hypothesis 5 was supported. Table 2. Digital marketing that marketers should avoid. I prefer when product related websites avoid the following Meana Avoid pop-ups on websites 4.35 Avoid un-closable windows 4.26 Avoid mandatory downloads 4.19 Avoid flashing items 4.08 Avoid links to sponsors 3.42 Note: All responses were significantly different from neutral (3.0). a Mean on a scale of 1 to 5 where 1 is strongly disagree and 5 is strongly agree. Table 3. Attention-grabbing digital marketing strategies. Marketing strategy % of respondents Graphics 73.4 Bright colors 53.6 Interactive 50.6 Personalization 46.5 Simple, professional layout 43.1 ‘Free’ (the word) 28.5 Note: Total does not add up to 100%; respondents could specify up to three choices. Table 4. Incentives to repeatedly visit a website. Incentive % of respondents Competitive prices 69.4 Good shipping rates 67.2 Coupons 57.7 Rewards for returning customers 52.4 Free gifts 52.3 Personalization 48.6 Updated product information 48.5 Favorable return policy 46.8 Interactive website 32.0 Email updates 26.4 Note: Total does not add up to 100%; respondents could specify up to three choices. 496 K.T. Smith Respondents answered questions regarding online reviews using a Likert scale; with 1 representing ‘strongly disagree’ and 5 representing ‘strongly agree’. The most effective incentive is to offer a discount for writing a review (4.29). Almost as effective is to offer a reward or coupon for writing a review. All of the scores are shown in Table 5. Using a One-Sample T test, all of the statements had significantly different means from neutral (3). Making the review process easy and quick is not as strong a motivator for writing reviews. ANOVA was used to test for gender differences in respondents. For all of the digital marketing strategies discussed in this paper, there is only one that had a significantly different effect on male and female respondents. Offering coupons in return for writing an online review was more of a motivator for females than males. The female and male means were 4.13 and 3.89, respectively. Conclusions While there have been numerous studies about online advertising, there has been little academic research focused on what types of digital marketing strategies are preferred by Millennials and which ones influence their behavior. Millennials are an essential ingredient in the development of e-commerce. Results of this study indicate that Millennials prefer certain forms of digital advertising, while avoiding others. Results also indicate that there are digital marketing strategies that are considerably more effective than others in grabbing the attention of Millennials, motivating repeat visits to a website, and soliciting online reviews. Data for the study were obtained via a survey of 571 Millennials. In designing digital advertising, marketers should use side-panel ads and offer coupons if they want to appeal to Millennials. This generation also likes watching advertisements on YouTube. Do not use pop-up advertising or un-closable windows, unless your intent is to irritate the consumer. Millennials are attracted to a website with brightly colored graphics. Digital media offer the opportunity to personalize websites and advertisements; marketers should take full advantage of this feature. This generation likes the personal touch and the chance to network with the marketer. Make your website interactive. Also make your website competitive on prices and shipping rates, as these are the top motivators for Millennials repeatedly visiting a website. Online reviews are very influential, especially with Millennials. Encourage Millennials to write online reviews by giving them a discount or coupon as an incentive. This generation responds well to rewards. A ‘freebie’ may be a small price to pay in return for a positive review that is read by numerous Internet shoppers. By taking into consideration the preferences of Millennials, a company can increase the effectiveness of its digital marketing aimed at this market segment. A company should not use online advertising that is considered intrusive and annoying, thus turning away Table 5. Successful motivators for writing peer reviews. The following motivates me to write peer reviews Meana I receive a discount for writing a review 4.29 I receive a reward or reward points for writing a review 4.10 I receive a coupon for writing a review 4.03 It’s easy and quick to write a review 3.75 Note: All responses were significantly different from neutral (3.0). a Mean on a scale of 1 to 5 where 1 is strongly disagree and 5 is strongly agree. Journal of Strategic Marketing 497 customers. Companies can attract customers by knowing which digital marketing strategies are engaging and prompt repeat business. A marketer who motivates and facilitates online reviews can utilize the free-flow of consumer-generated content to promote a brand or company. Companies should connect with this new generation of consumers on their turf, the digital arena; this will facilitate successful communications. 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