Generation Alpha: Shaping the Future of Marketing and Consumer Behavior

How Gen Alpha Views The World

This is the published version of Forbes' CMO newsletter, which offers the latest news for chief marketing officers and other messaging-focused leaders. Click here to get it delivered to your inbox every Wednesday. Google has been vilified recently for changes it's made to its algorithm, search results and the not-always-accurate generative AI Gemini search assistant. It seems like Google went from being the search engine of choice for a superior method of ranking results to being the search engine everyone is used to, but that cannot perform well. New data from SEO and digital marketing consultant BrightEdge shows that isn't quite the truth. Google still dominates search, driving about 92% of organic traffic to brands. It doesn't seem that any other site is coming close to stealing that dominance away. And Google has reformed, BrightEdge found, with almost no AI Overview information coming from user-generated content last month -- so no more suggestions to put glue in pizza sauce to keep cheese from sliding off. But while Google still rules online search, BrightEdge was able to quantify just how lucrative it is. Each percentage point of organic search market share is worth about $1.2 billion, they found -- meaning even small shifts in favored engines are extremely valuable. AI-powered Perplexity appears to be the biggest up-and-coming threat at the moment, with usage growing 31% month-over-month. There aren't many referrals coming from LLMs at the moment -- though that could definitely change, BrightEdge says in the report. "AI is in a constant state of progress, so the most important thing marketers can do now is leverage the precision of insights to monitor, prepare for changes, and adapt accordingly," said founder and executive chairman Jim Yu. AI search isn't the only up-and-coming aspect marketers are paying close attention to nowadays. While state and federal regulations don't allow much direct marketing to young children, the preferences and behaviors of Generation Alpha -- those born between 2010 and today -- will directly shape marketing in the future. Forbes HBCU scholar intern Tavon Thomasson and I talked to Razorfish President Dani Mariano about the agency's recent research on Generation Alpha. An excerpt from our conversation is later in this newsletter. Americans are looking away from screens a lot more these days, a new study from Attest found. Forbes senior contributor Toni Fitzgerald writes that just 61% of people watch three or more hours of TV a day. While that's still a sizable amount, it's down 3% in 2024 alone. And nearly a quarter of people watch no live TV at all. But it's not just TV that's seeing fewer viewers. Fewer people report being heavy users of social media, with only 41% saying they use it two hours or more a day. Again, that's still a lot of people, but 4% less than last year. Attest founder and CEO Jeremy King chalks these shifts up to a few things. Millennials are getting to the point in life in which they have more responsibilities, both in their careers and with families, that they may have less time to spend with screens. There may also be concerted efforts to spend less money on cable or streaming services. But it also could be the manifestation of a wider "slow living" trend, in which Americans are trying to be more mindful. But even though more TVs are getting turned off, it's still the most attention-grabbing way to advertise out there. Brand-new statistics from Omicron Media Group and Yahoo, through a partnership with Amplified Intelligence, found that CTV ads grabbed the most viewer attention -- 9.7 seconds worth, which is eight times more than mobile, and 16 times more than on desktop. However, CTV ads are best for brand awareness -- people who see an ad on a mobile device are twice as likely to purchase something as those exposed to an ad on a computer or CTV. When it rains, it pours. Burberry, the luxury British brand best known for its distinctive trench coat, is the latest to issue a profit warning, seeking revenues down 20% overall, and comp store sales down 21% year-over-year. In its trading update posted earlier this week, Burberry put it succinctly: "Our Q1 FY25 performance is disappointing." The brand has been struggling to redefine itself as high inflation is straining the luxury market as a whole and its trademark check pattern started to feel less exclusive, Forbes contributor Mark Faithfull wrote last week. Big changes have been made at the fashion house. With this week's profit warning, Burberry announced the immediate hire and start of its new CEO, Joshua Schulman. He's familiar to the luxury market, formerly serving as CEO of Coach, Michael Kors and Jimmy Choo. He's also held positions at Neiman Marcus Group, Bergdorf Goodman, Yves Saint Laurent and Gucci, Faithfull writes. Burberry may also be considering layoffs, Faithfull wrote last week. Late last month, the company announced internally it is restructuring, and hundreds of jobs could be cut. The NBA reached an 11-season $76 billion rights deal for broadcasting its games. Under the terms of the deal, NBC and Amazon are the main partners, with broadcasts spread between traditional television and streaming platforms. Regular season games would be televised nearly every day under this deal, with NBC and its Peacock streaming network on Mondays and Tuesdays, and Amazon Prime streaming games on Friday nights and Saturdays. Amazon will stream the In-Season Tournament, conference finals will be alternated between NBC and Amazon, and ESPN will air a conference final and the NBA Finals. While this agreement brings the NBA more solidly into the streaming era, longtime basketball partner TNT is conspicuously absent. TNT, which has broadcast NBA games for 34 years, could still get a piece of the broadcast action if it can match the deal. The streaming portion of the deal could be incredibly lucrative. Amazon, which streams Thursday night NFL games, was able to capture a younger audience than Sunday TV broadcasts for the league last year -- the median age was 48.5 years old on streaming versus 55.4 years old, according to ESPN. Twelve of the 16 games it broadcast had an average of more than 10 million viewers, twice as many as in 2022. The next generation of consumers -- those born since 2010 and known as Gen Alpha -- are still in the younger part of childhood. However, the way they look at the world is vastly different than those who have come before. Marketing agency Razorfish recently published their most recent wave of research on Gen Alpha. Forbes HBCU scholar intern Tavon Thomasson and I talked to Razorfish President Dani Mariano about their findings and how they will impact marketing. This conversation has been edited for length, clarity and continuity. A longer version of this conversation is available here. You said that there are a lot of differences between Gen Z and Gen Alpha. What are some of the biggest ones? Mariano: In our first wave [of research on Gen Alpha], we saw that they're more Gen Z than Gen Z. They have a voice, they're very discerning and they're going to use their voice very loudly to drive the change that they want to see. I think we'll see that continue. We also know that they're much more brand-savvy. In the second wave report, we compared Alphas to Gen Z at the same age. For Gen Alpha, their favorite brand is Nike. For Gen Z at the same age, it was McDonald's. These are two very different brands, creating two very different experiences, both online and digitally. Gen Z was very interested in influencers, and wanted to be influencers themselves and develop careers out of that. Gen Alpha is not interested in that. They want jobs where they're going to change the world. They do look to influencers, but they are more interested in influencers and creators that they feel a connection and community with. That's where I think it gets very interesting, to see how that's going to change the way marketers operate. Both generations love gaming. To me, gaming isn't just an affinity or lifestyle attribute -- everybody's gaming. However, the reason why Gen Z games is because they want to have an escape. It's their way of taking a break. Whereas Gen Alpha, they want to create. They're using gaming as an avenue for their creativity and for community. You mentioned the importance of authenticity and real-life stories for Gen Alpha. What does this mean for brands, and how can they find and tell real-life stories that are engaging and bite sized to resonate with this generation? I think first you have to be really sharp on what the purpose is for the organization. We think a lot about what we call IBX: integrated brand experience. What is that experience, holistically, for somebody interacting with your brand? What does that entire journey look like, and what is it like once you purchase the product and [are] experiencing the world? Once you have a clear understanding of that, the stories will emerge. But who tells those stories is also important. We are very focused on creators right now. Creators are not just influencers putting their name on something. They are genuinely thinking about how to bring that story to life. Part of this involves having a lot of Gen Z staff who can create content authentically in the right voice for the target audience. The formats are there now, but it's very difficult for some brands to give up a little bit of control over how those stories look because they're not as polished or beautiful. They don't want super high-polished athletes and celebrities. They don't want the two-minute brand film. They want content that resonates with them, and that's going to look different. Based on what I'm seeing in the data, I believe we're going to see a shift toward a creator content model for brands. Content creators will look for brands with authentic stories derived from their purpose, which they can then create and tell. How do you see Gen Alpha's preferences changing marketing? How does this change what brands are going to be doing in five years? I think their brand maturity is one of the things that will have the biggest impact in five years. The baseline for Gen Alpha is high compared to where it was for Gen Z. Streaming is the baseline. Amazon is the baseline. The brands they're looking to are very sophisticated. These aren't just food, candy, and cookie brands. These are the biggest, most sophisticated brands in the world. If you're used to Amazon, everything should be as easy as Amazon. We know how amazing that experience is, every brand should be thinking about that as the baseline five years from now. Another huge change is AI. These kids will have grown up with AI. They will be savvy at knowing what was AI-generated and what was human-generated. This will become a big question around authenticity. As we scale personalization using AI tools, where is the line where it's so personalized that now it's inauthentic? For something like a candy bar, maybe it's fine because you don't have a high investment as a brand. But for something they are highly invested in, like a gaming property or a product that they're very interested in and part of their community, they won't want inauthentic AI-generated content. Some of Netflix's most-watched original shows this summer are real-life stories told in documentary-style series. 23: Number of Netflix docuseries released this year that have been in its Top 10 most-watched shows What did actress Sydney Sweeney say in response to a not-quite-accurate AI-generated image of herself that went viral?

How Generation Alpha Will Impact Marketing

The next generation of consumers -- those born since 2010 and known as Gen Alpha -- are still in the younger part of childhood. However, the way they look at the world is vastly different than those who have come before. Marketing agency Razorfish recently published their most recent wave of research on Gen Alpha. Forbes HBCU scholar intern Tavon Thomasson and I talked to Razorfish President Dani Mariano about their findings and how they will impact marketing. This conversation has been edited for length, clarity and continuity. An excerpt appeared in the Forbes CMO newsletter. How are brands adapting their strategies to prepare to engage with Gen Alpha as they grow older? Mariano: We are studying them to understand how this generation is being shaped by technology, knowing that they are the largest generation and they're going to have the greatest amount of spending power as they start to turn 18. They will be an AI generation, where AI is second-nature to them. We want to understand how they're thinking about the world, their relationship to technology, and how that's shaping their behaviors. Product cycles, development cycles and marketing programs will need to change to meet their needs and resonate with them. They are very sophisticated consumers, and their parents report them as being much more brand-savvy than they were at the same age. We aim to help our clients look around the corner. With four years until the oldest Alphas turn 18, now is the time to start thinking about these long development and product cycles. You need to get ready for what this is going to look like and not be caught off-guard by it. You said that there are a lot of differences between Gen Z and Gen Alpha. What are some of the biggest ones? We've done two waves of research. In our first wave, we saw that they're more Gen Z than Gen Z. They have a voice, they're very discerning and they're going to use their voice very loudly to drive the change that they want to see. I think we'll see that continue. We also know that they're much more brand-savvy. In the second wave report, we compared Alphas to Gen Z at the same age. For Gen Alpha, their favorite brand is Nike. For Gen Z at the same age, it was McDonald's. These are two very different brands, creating two very different experiences, both online and digitally. Gen Z was very interested in influencers, and wanted to be influencers themselves and develop careers out of that. Gen Alpha is not interested in that. They want jobs where they're going to change the world. They do look to influencers, but they are more interested in influencers and creators that they feel a connection and community with. That's where I think it gets very interesting, to see how that's going to change the way marketers operate. Both generations love gaming. To me, gaming isn't just an affinity or lifestyle attribute -- everybody's gaming. However, the reason why Gen Z games is because they want to have an escape. It's their way of taking a break. Whereas Gen Alpha, they want to create. They're using gaming as an avenue for their creativity and for community. The study shows Gen Alpha loves to learn. How does this translate into marketability, and what can marketers do to effectively reach them? The way they learn is different. We know that their top ways of learning include hacks, DIY projects and very short snackable content. Brands that consider how to develop their content in the channels that Gen Alpha will be in need to focus on life hacks [and] very short format, and I think that's going to be hard for brands. We've quickly gone from the two-minute brand film to snackable life hacks. Gen Alpha will be looking to brands that help them, provide content that is doing something good for the world and also [that are] building community. Brands that pivot into developing these kinds of content roadmaps, and work with studios and agencies that can help them develop that content, will have a better chance of breaking through. Would you say that brands already have these internal purposes and life hacks that they can tell Gen Alpha-targeted stories about? It depends. At Razorfish, our mission is to bring brand purpose and connect that to business outcomes. Some brands are great at this, while others, I think, can sharpen what their brand purpose is. It has to be authentic to the brand. When Gen Alpha is looking for what a company stands for, they want to understand it, but it has to be authentic. It can't just be five points on your website or a few posts. It has to be truly endemic and authentic because they're going to be researchers. Gen Alpha is web-savvy and will hold brands accountable to their brand purpose. For some brands, it is about sharpening their purpose and making sure it is clear. The chart that surprised me the most is the one that showed just one in five sees celebrities and athletes as role models, and they placed the least trust in people on TV. What has caused those shifts, and what does that mean for marketing? I think that has to do with how kids consume content now. For Gen Z, they were still watching linear TV. Gen Alpha is experiencing content through digital platforms, where they are not exposed to as much advertising. The best story I've heard lately is from someone who was in a hotel with their Gen Alpha child. They were watching TV that wasn't on-demand, and the child said, "No, I don't watch this. I want to watch my show on YouTube." The parent explained, "We're watching TV. You don't get to pick what's on. You have to find something you like." This child was mind-blown, asking, "What do you mean it's not on-demand? What is happening?" This shift means they are not exposed to celebrities and athletes in the same way Gen Z was. For marketers, this means you cannot rely on borrowed equity like before. It's no longer about hiring a celebrity or an athlete for an endorsement. Now you need to expand your creator efforts. You can't just get one big influencer. You need many creators that Gen Alpha can connect with, believe in and feel part of [the] community. Kids today want to experience community in a much different way. It's not always about showing up at the ballpark with a jersey on. Now it's about always having access to a community that's meeting them where they are. You mentioned the importance of authenticity and real-life stories for Gen Alpha. What does this mean for brands, and how can they find and tell real-life stories that are engaging and bite sized to resonate with this generation? I think first you have to be really sharp on what the purpose is for the organization. We think a lot about what we call IBX: integrated brand experience. What is that experience, holistically, for somebody interacting with your brand? What does that entire journey look like, and what is it like once you purchase the product and [are] experiencing the world? Once you have a clear understanding of that, the stories will emerge. But who tells those stories is also important. We are very focused on creators right now. Creators are not just influencers putting their name on something. They are genuinely thinking about how to bring that story to life. Part of this involves having a lot of Gen Z staff who can create content authentically in the right voice for the target audience. The formats are there now, but it's very difficult for some brands to give up a little bit of control over how those stories look because they're not as polished or beautiful. They don't want super high-polished athletes and celebrities. They don't want the two-minute brand film. They want content that resonates with them, and that's going to look different. Based on what I'm seeing in the data, I believe we're going to see a shift toward a creator content model for brands. Content creators will look for brands with authentic stories derived from their purpose, which they can then create and tell. How do you see Gen Alpha's preferences changing marketing? How does this change what brands are going to be doing in five years? I think their brand maturity is one of the things that will have the biggest impact in five years. The baseline for Gen Alpha is high compared to where it was for Gen Z. Streaming is the baseline. Amazon is the baseline. The brands they're looking to are very sophisticated. These aren't just food, candy and cookie brands. These are the biggest, most sophisticated brands in the world. If you're used to Amazon, everything should be as easy as Amazon. We know how amazing that experience is, every brand should be thinking about that as the baseline five years from now. Another huge change is AI. These kids will have grown up with AI. They will be savvy at knowing what was AI-generated and what was human-generated. This will become a big question around authenticity. As we scale personalization using AI tools, where is the line where it's so personalized that now it's inauthentic? For something like a candy bar, maybe it's fine because you don't have a high investment as a brand. But for something they are highly invested in, like a gaming property or a product that they're very interested in and part of their community, they won't want inauthentic AI-generated content. Do you think Gen Alpha's preferences will change broad spectrum marketing? I would anticipate that we will see some of that start to shift as Alphas turn 18 and they come into their buying power. I do think it will be interesting to see who's watching big events [like the Super Bowl]. There may still be a need to use celebrities and athletes as spokespeople because you have a much bigger audience. I do think they will influence it, but I don't know that it would be a radical switch where, in five or six years, we never see celebrities again. This has been a fascinating conversation. Is there anything else to think about? One thing we have not talked about is how analog is still important to these kids. We know that going to the mall and being in stores is the No. 2 way they discover new things. Don't forget that the in-person experience is still critical for brands to be thinking about. When we think about an innovative brand experience, it has to include what are we doing in the real world, and how are we creating opportunities for an excellent brand experience for Gen Alpha? That's one area that I think is a surprise for people, because they think of them as digitally native. But I do think that offline experience is something that we cannot neglect, and that we do see them yearning for those kinds of experiences.