Talkin' About Generation Y

Do you know how to market wireless to today's teens and young adults?

David Friedman said he wouldn't be caught dead running around with a bright yellow and black, smiley-faceplated wireless handset attached to his hip. But his 11-year-old daughter would "grab it and make calls up the wazoo with it."

Friedman, U.S. Cellular vice president of marketing, knows that the teen and young-adult market segment can be huge for wireless providers, if you can give them what they want and need.

The U.S. Census Bureau currently counts 56 million Americans between 15 and 29 years old. So if you're not actively marketing and selling wireless services to Generation Y - well, like, that's just not cool.

The teen and young-adult segment called Gen Y has the most spending power and independence of almost any other consumer segment today. And two-thirds of young adults rate communications as their highest priority. SRI Media recently called this segment the "heart of mobile communications megagrowth," and it's easy to see why.

"In the U.S. market, (Gen Y is) the people who are most likely and readily able to adopt new technologies into their lifestyle," said Gordon Gould, founder & CEO of Upoc, a wireless-communications platform that allows users to create and distribute content across any wireless device and provides a Gen Y-targeted community platform to providers. "We've seen examples on the Web: Hotmail or ICQ, where kids glom onto this stuff first. Gen Y is going to be the first group who's going to pick up new data services and embed them into their social life as part of how they communicate."

Gen-Y Focus Many providers already have recognized the great Gen-Y opportunity.

"The young-adult segment is a very rich target," said Kim Whitehead, AT&T Wireless senior vice president of marketing. "Everyone is trying to go after that target. So we will be heading a marketing campaign specifically targeted to the needs of that segment."

AT&T Wireless targets the Gen-Y segment with offers such as prepaid plans, Digital PocketNet service, Digital One Rate and family plans.

The 18 to 24 group, "especially coming out of school and going into the job market, do a lot of traveling," Whitehead said. "That group is a heavy-communicator group, anytime-anywhere communication, they grew up with the Internet, and family is important."

U.S. Cellular's service covers many college towns - perfect areas to target teens. Friedman said teens and college kids tend to use more local-service than roaming plans.

MetroZone, a prepaid plan launched initially in Knoxville, TN, allows subscribers to make and receive unlimited local wireless calls within a specified local-calling area for a $34.95 monthly flat rate.

Friedman said U.S. Cellular may extend its Farm Flex bifurcated plan to the teen segment. With Farm Flex, price plans are "x" dollars for a certain amount of minutes during planting season; during the off-season when planting is over, the plan reverts to a reduced level of usage at a reduced price.

"We know that teens during the summer would use (wireless service) more, and teens would use it more after school hours," he said. "We can change our pricing so that teens would have a bifurcated plan as well."

Verizon Wireless hopes to tap the teen segment with Gen-Y content providers via its Mobile Web service. It recently partnered with Bolt, a global-communications platform for 15- to 20-year olds, to provide Mobile Web subscribers with access to Bolt Everywhere, a teen wireless platform that enables 2-way communications on any WAP-enabled device. Bolt provides proprietary interactive tools and services that offer teens e-mail, voice mail, voice chat, people search and instant messaging.

Bell Mobility recently transformed its SOLO digital-prepaid service into a wireless Web service for the Gen-Y segment. SOLO subscribers can use their airtime minutes to talk or surf the Mobile Browser service. Teens can access more than 40 Web sites, as well as e-mail, Yahoo instant messaging, concert contests and shopping sites. By accessing Youtopia.com under Mobile Browser's "Cool Sites" heading, teens can play games, chat with other Youtopians, check and send e-mail, and access their account and calendar information.

Rob Bruce, senior vice president of marketing, said Bell Mobility wanted to bring the best of the Web to wireless teens. In the process, the provider made its wireless-Internet service more accessible, attractive and relevant to teens - "the most important prepaid group in Canada," he said.

Marketing to Teens Young consumers are highly connected and extremely interactive - they want to communicate with their peers through e-mail, instant messaging and wireless devices. But Gould said the wireless industry has largely failed to recognize and capitalize on the potential of one of its largest and most-important consumer markets.

"The business models aren't as obvious (for Gen Y) as they are in the B2B space, but the payoff for the providers is pretty significant because they can lock in young customers early on and help accrue a lot of stickiness," he said.

Annually, teens spend about $144 million of their own money. Traditional prepaid plans with no credit checks and no contracts are popular among Gen Y, but providers should be more pro-active.

"When it's as expensive or more expensive to rack up wireless-data-service minutes, you're not going to generate the kind of message-based usage that you would otherwise exceed," he said. "It's simply not necessary for Gen Y to check their stock quotes every five minutes; they aren't going to be booking plane tickets on their phones."

Successfully marketing to Gen Y means keeping abreast of trends and responding quickly to its ever-changing needs and wants. Special price plans, cool phones and accessories are key.

Nokia's inexpensive and customizable 5100-series phones feature colorful, changeable faceplates. Such accessories have scored high among Gen Y, which wants the hottest cellular-phone extras, including polka-dotted faceplates and beach-chair handset holders.

"Kids are buying (wireless), not because of the deal they're getting, not because of the service, not because of the fact that one has Yahoo on it or not, they're buying because they like the phone," Gould said.

But Friedman said teens and young adults consider more substantial factors as well.

"They're very concerned about quality," he said. "They understand cellular, they understand the concept, the utility. Teens are very bright, very astute technically and very sophisticated buyers with a lot of purchasing power."

U.S. Cellular is taking teens seriously. It plans to monitor their telecom tastes frequently with a standing customer advisory group that includes young adults to find out what services and accessories teens want, as well as how they want the products presented to them.

"We're stepping back and looking at what teens' needs are today," he said. "We're literally developing a marketing plan for teenagers. Based on that, we will develop products and services and distribution channels. Our goal is to take a look at our products and slice and dice them in a way that makes sense for those customers."

So far, U.S. Cellular has learned that young consumers like to go to stores and touch and feel. They like variety, selection and choice. When they do choose a product, they accessorize and personalize it.

For these reasons, Gould said providers should give Gen Y a high degree of control over its wireless experience.

"Gen Y is very media and Internet savvy, they are used to having a huge, broad range of options on the Internet," he said. "Any of the providers who realize that the best way to service Gen Y is by giving them broad range and unfettered access to the entire wireless Internet is going to be the winner at the end of the day."