Music Business Is Being Re-Defined By Generation Z
While for years millennials were the target demographic of most music business marketing, Generation Z has since risen up as the primary stakeholder in the contemporary marketplace, which is in turn reshaping how artists, labels, and companies market themselves.
Guest post by Alyssa Golden of the Berklee College Of Music – Music Business Journal
Consumer commerce has long emphasized marketing to millennials due to the peak of purchasing power this young demographic has reached; however, after years of research and marketing, companies must now adjust their advertising objectives due to the emergence of a new generation’s stake in the contemporary marketplace. Generation Z is known as “young millennials,” born 1995 or later (those currently between the ages of thirteen to twenty four, roughly). While millennials were the first to be exposed to social media and apps such as Facebook, Spotify and Netflix, they are no longer the target audience for the latest technological trends. Shifting focus to the succeeding generation, advertisers must find new ways to cater to generation Z, who is currently consuming apps like Snapchat, Instagram and Youtube. 2 Generation Z’s media habits differ from any preceding generation, given that for much of their lives, access to information is on demand or just a click away from their fingertips. They are the first generation to grow up with the Internet as a regular part of their everyday routine. For music marketers, it is important nowadays to not only know where to find this target audience, but to truly understand their behavioral characteristics and attitudes, especially in terms of social platforms and trends.
According to the Pew Research Center survey conducted in 2018, 45% of teens say that they are online “almost constantly,” meaning nine out of ten teens are online multiple times a day. 6 The report also shows that Gen Z spends an average of eleven hours per week on mobile devices along with twenty-three hours of video content on streaming sites per week. 6 Gen Z is filled with independent learners who often turn to the Internet to learn and watch DIY tutorials. Therefore, an upcoming artist that caters to fifteen to twenty year old girls may want to consider advertising on a platform like YouTube for makeup/hair tutorials or for influencers like Emma Chamberlain.
Also recently, Mark Mulligan of MiDiA Research conducted a study in the UK giving an insight into music and social media habits of young adults aged up to nineteen in order to predict the changes the music industry may potentially face. With 97% of sixteen to nineteen year olds in the UK possessing smartphones and well over half using some form of social platform, it is clear that online media is an important cultural reference to Gen Z, and it has the potential to reach millions. 4 The Statistics Portal showed that in 2019 it is estimated that there will be around 2.77 billion social users around the globe up from 2.46 billion in 2017. 5 Music marketers can find these target audiences online, but must furthermore understand how to effectively advertise on popular platforms.
According to Fanbytes who partnered with DMN to deliver marketing intelligence on Gen Z and Snapchat, Snapchat holds the largest portion of thirteen to nineteen year olds’ attention in the US, UK and more, of any online platform. 3 Snapchat provides its users with the ability to add facial filters, provide visuals and narratives of their lives instantly, and more often than not, incorporates music or embeds preloaded music in its filters. 3 It is still a growing platform and over the last four years, has seen the largest usage increase out of any major online media. When the Pew study was conducted in 2014, 71% of teens said they used Facebook, 52% used Instagram, and 41% used Snapchat. When the study was conducted again in 2018, Facebook usage decreased to 51%, Instagram increased to 72%, and Snapchat increased to 69%.6 While apps like Facebook and Twitter are certainly still relevant in terms of advertising, Instagram and Snapchat are more appealing to the younger set of Gen Z, and therefore hold more marketing potential. Advertising is not just about informing users anymore, but rather entertainment. Snapchat partners up with artists getting their songs played in a creative, fun and engaging way that marketers should fully take advantage of.
The Key to Generation Z Marketing
It is apparent that Generation Z sees most of their ads through social media, but to follow up, it is important to understand the amount of time they spend on these apps as well as the attention span. Gen Z has multiple outlets of information being thrown at them everyday; more information than any other generation has ever had. Therefore, they can quickly detect which ads are relevant to them or not, and decide which videos they want to watch or skip. For music marketers, it is important to quickly grab their attention before they move on to something else. The key is the time limit. Music tends to be the common denominator for Gen Z given that they average four hours a day listening to music, remaining as a powerful tactic to capture their attention. With that information, Pandora decided to promote their new Thumbprint Radio feature with user-generated content. Knowing how interactive Gen Z is, Pandora launched a “#nofilter” reaction campaign where users showed their own personalities with humor and dance moves reacting to when their favorite music came on Pandora. 2 This marketing tactic not only engaged young adults with their platform, but also made their post shareable, an important element for Gen Z.
Where Does Generation Z Listen to Music?
Although Pandora is still a largely used platform for music consumers, YouTube and Spotify serve as the two largest entertainment platforms for Gen Z. YouTube serves as a video destination, music app, and educational resource all in one; however, Spotify has replaced YouTube as the number one music app among young adults in the UK with 53% weekly usage of Spotify compared to 47% of YouTube. 4 While it is clear that streaming has become the main thoroughfare for music consumption, it also is changing the way artists release music. 74% of sixteen to nineteen year olds prefer to stream singles as opposed to albums, while 85% say that music is an important part of their life. 4 This shows the influence young listeners have on contemporary music models, and conversely shows the potential reach music marketers have to the youngest generation. However, as earlier noted, Gen Z can quickly differentiate which ads are relevant and which are not, thus understanding their behaviors, expectations, and attitudes towards social media and listening to music are of utmost importance.
Once music marketers understand where Gen Z listens to music, they must put their ads in places that build brand awareness and get users to listen to the message. Spotify offers advertisers tools to track audiences that can be narrowed down to target based on age, gender, geographic location, listening activity, etc. 7 Gen Z can be exposed to ads via audio, video or display, offering advertisers an effective way to measure success. Pandora takes this format a step further by partnering with third party data providers who segment audiences even more based on information such as their purchasing habits, travel behavior, education, profession, and more. 7 In a similar way to Spotify, ads are created via audio, video or display. This truly allows marketers to understand users’ behavioral characteristics and attitudes.
Already making up a quarter of the U.S. population and accounting for 40% of all consumers by 2020, Generation Z should be of utmost importance to not only music marketers, but to advertisers everywhere. Consumers hold much power and are no longer just receiving information; they are participating in it. The future of the music industry is filled with virtual reality and artificial intelligence, enhancements to live performances, and even new social media platforms to come. In order for the music industry to remain innovative in a time where technology is advancing rapidly and trends are changing, companies must stay up-to-date and understand the fast-paced, hyper-connected needs of Gen Z.
 B2B, Clodagh. “Is Your Business Ready for the Rise of Generation Z?” Digital Marketing Institute. December 20, 2018. Accessed January 25, 2019. https://digitalmarketinginstitute.com/en-us/the-insider/19-10-16-is-your-business-ready-for-the-rise-of-generation-z.
 Bukwild. “Engineering for Engagement: Generation Z Is the Earbud Generation | Pandora For Brands.” Pandora for Brands. January 11, 2018. Accessed January 25, 2019. https://www.pandoraforbrands.com/article/events_engineering-for-engagement-generation-z-is-the-earbud-generation.
 Cameron, Bret. “4 Ways Savvy Music Marketers Keep Over 90% of Teens Glued to Their Ads on Snapchat.” Digital Music News. November 06, 2018. Accessed January 25, 2019. https://www.digitalmusicnews.com/2018/11/05/marketers-ads-snapchat/.
 Mulligan, Mark. “Gen Z Meet the Young Millennials.” Midia Research Report Jointly Commissioned by BPI and ERA. 2017. Accessed 2019. https://eraltd.org/media/27138/midia-research-gen-z-report.pdf.
 “Number of Social Media Users Worldwide 2010-2021.” Statista. July 2017. Accessed January 25, 2019. https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/.
 Pruett, Michelle. “Gen Z’s Favorite Social Networks: YouTube, Instagram, Snapchat.” Criteo. July 17, 2018. Accessed January 25, 2019. https://www.criteo.com/insights/gen-z-social-media/.
 Zgm. “Advertising on Spotify and Pandora | Music Streaming Advertising.” Zero Gravity Marketing. July 26, 2018. Accessed January 25, 2019. https://zerogravitymarketing.com/advertising-on-spotify-and-pandora/.