Author: Franz Malten Buemann

With a purchasing power of more than $143 billion, Gen Z is expected to shake up the retail industry.
Although many in Gen Z are earning their first paychecks, entering college, or just joining the workforce, studies show that the generation shops and spends money much differently than its millennial predecessor.

While millennials and past generations were more loyal to brands, Gen Z is more interested in buying products that will give them the best value based on their price. Gen Zers also admits to being more impulsive in their shopping habits than older generations.
A Breakdown of Generation Z’s Spending Habits
When it comes to the total share of spending, Gen Z accounts for an estimated five percent in the U.S., according to Afterpay’s 2021 Next Gen Index. However, that number is expected to grow 10% by 2030, as most will be entering the workforce.
With every age group, generation Z’s spending habits declined at the onset of the COVID-19 outbreak. However, the Afterpay report reveals that Gen Z recovered faster than older generations.
So what are they doing right now? Well, they’re shopping more online.
A 2021 Consumer Culture Report by 5WPR found that Gen Z is now spending 43 minutes more per on online shopping than they did before the COVID-19 outbreak.
They (77%) say online shopping allows them to discover products from new or small companies they wouldn’t find in person. Only 38% say they prefer in-store shopping.
The number one place Gen Z lives online is YouTube. It’s where they spend their time but also where nearly half (47%) research products they’re interested in purchasing, according to the report. Instagram comes next, followed by Snapchat, then TikTok.
The report also suggests that Gen Z is the most passionate when it comes to buying products from brands that align with their values. The study found that 45% of Gen Z have boycotted a business and 36% enjoy buying products that display their social and political beliefs.
Another thing we can expect from Gen Z is their reliance on influencers to recommend products.
A 2021 Survey Monkey report found that this generation trusts influencers the most, with 11% using them as their trusted source for product recommendations – compared to 7% in millennials and 3% and lower in 40+ consumers.
To help brands market to Gen Z when they reach full purchasing power, here’s what we expect them to invest in over the next year.
5 Things Gen Z Will Spend Money On

According to a 2021 Consumer Culture Report by 5WPR, Gen Z is prioritizing electronics and technology along with health and wellness.
Conversely, Millennials and those from older generations prioritize travel and experiences, home goods, and furniture.
Based on additional research, we also found that Gen Z also pays special attention to small businesses. They are also willing to wait for a good discount before making a purchase and take advantage of buy-now-pay-later purchasing options.
Let’s dive into each category below.
1. Electronics and Technology
Gen Z will occasionally splurge on technological experiences that help them have fun, such as video games. In fact, a 2019 study found that two-thirds of Gen Z men say gaming is a “core component” of who they are.
While you might worry that Gen Z isn’t worth marketing to because they won’t splurge on your products, this age group certainly can be persuaded to make larger purchases that offer fun experiences or improve their daily lives.
But, even though they will invest in higher-priced products, Gen Z will still need thorough convincing before pulling out their wallets. It’s incredibly important for brands targeting Gen Z to create content that demonstrates why the age group needs their product, how the product could solve daily boredom or woes, and why it’s better than a competitor’s.
For example, although some consumers might consider Fitbit fitness trackers frivolous, this brand does a great job of explaining why its product can be a necessary tool to use within a fitness routine.
On social media, Fitbit gives facts about why walking and cardio – two activities the bracelet can track – are important to health. And, in a November blog post, Fitbit more deeply connected its product to health needs by discussing how its reporting software could help people communicate better with their doctors.
While Fitbit doesn’t claim its product is necessary for health, the brand shows audiences how the product can be used to help them track their fitness needs and progress.
When a pessimistic or budget-conscious Gen-Z member researches Fitbit, they might find its content informative and helpful. From there, if they’re interested in a healthier lifestyle, they might realize that Fitbit is a credible brand that could help them with their fitness needs.
2. Discounted Goods
Eighty percent of Gen Z surveyed in 5WPR’s report say they will wait for an item to go on sale before buying it.
Why is Gen Z so conscientious about their spending habits? Mounting research suggests that the age groups’ thoughts on money link directly to the economic era they were raised in.
While millennials grew up in more stable financial times, most of Gen Z’s earliest memories took place during the U.S. recession. Much of this generation grew up in highly budgeted households or saw how their families were impacted by economic troubles.
Meanwhile, a large percentage of millennials, as well as those in other age groups, are able to recollect times where their economy was booming.
Organizations including the Pew Research Center say these eras have psychologically molded how each generation thinks differently about money. While researchers believe both millennials and Gen Z are money conscious, with goals of avoiding financial instability, millennials are considered to be “more optimistic” future finances.
As Gen Z ages, studies and purchasing behaviors hint that they haven’t been able to shake their concerns of financial instability. Much research shows that to get Gen Z to invest in a product or service, the offering needs to be so valuable to them that they can justify purchasing it.
A recent Business Insider report revealed that Gen Z isn’t easily persuaded by a logo when it comes to clothing. In fact, unlike other generations, brand loyalty is one of the last things they think about when making a purchasing decision. What the generation does focus on is price and value.
In the report, a 20-year-old named Amanda Chermin explained, “I can’t afford nicer brands of clothes – I like to save and would rather have money in the bank than be broke.”
Instead of splurging on the hottest brand from New York Fashion Week, the age group is more likely to purchase cheaper clothing that’s either not from a name brand, on clearance, or re-sold.
Or they’ll buy now and pay later (BNPL).
Millennials are the leaders of the BNPL model but Gen Z is growing the fastest, accounting for 14% of users on Afterpay in the U.S.
80% of Gen Zers who use the software spend it on fashion. However, wellness, beauty, and recreation are other top categories.
Although they aren’t loyal to the same stores and brands millennials zoned in on, Gen Z still feels pressure to buy and wear clothing that’s considered good quality or fashionable. Aside from purchasing affordable clothing, the need to look their best has also led to many in Gen Z to invest in clothing rental services or try-before-you-buy shopping experiences.
Although Gen Z is expected to spend less money on clothing than other generations, researchers believe they still feel pressure to look good in front of their peers. These pressures, which might stem from social media, school, work, or social environments will still drive the age group to clothing stores or ecommerce sites. While retail marketers should expect shifts in spending behaviors from this generation, Gen Z will still buy clothing that looks good on them, is good quality, and has an affordable price.
The themes related to clothing purchases are important to keep in mind — even if you aren’t marketing clothing products. As we’ve established, Gen Zers are always looking for a good bargain and won’t use just a brand name to justify a purchase.
Regardless of how popular or well-known your brand is, you’ll still need to highlight why your products are better than cheaper versions from competitors.
Although your logo might not persuade Gen Z to buy your product, you can still use authentic brand trust and popularity to your advantage. Although Gen Z is budget-conscious, they also care about what their peers think of them. This means that they might still feel a need to splurge on a product, such as a clothing item if they know that people in their age group have it.
If you’re marketing to Gen Z, consider asking popular influencers or happy young adult customers to discuss your product on social media. An authentic product review will not only build a sense of brand trust, but it will also show Gen Z audiences that the product is popular and being used by people they follow.
From there, a Gen Z member might research or purchase a product simply because it’s more popular or has better reviews than a cheaper alternative.
3. Health and Wellness
In 2019, a survey found that Gen Z was more concerned with mental and physical health than older generations. Today, that still rings true.
Health and wellness is the second-highest category Gen Z spends on, according to 5WPR’s 2021 consumer report mentioned earlier.
In fact, this group seems to be leaders in the wellness movement building over the past few years, which promotes awareness surrounding mental health, ethical food sourcing, other related wellness issues.
For instance, WSL reported that Gen Zers are more likely to use natural remedies than traditional medications, seven points higher than Millennials. They’re also less likely to eat fast food.
The article also highlights how Gen Z also invests more (5% to be exact) in wellness than Millennials, a data point that’s reflected in 5WPR’s 2021 Consumer Culture Report.
4. Small Businesses
Since January 2020, small business spending has increased more than 260% for Gen Z on Afterpay, 80% higher than Millennials.
This conscious effort likely stems in part from the recent pandemic, as many small businesses struggled to survive.
In a June 2021 survey conducted by Sendinblue and CITE Research, 46% of Gen Z consumers said they purchased more from small businesses than pre-pandemic.
Most were driven by the ability to build a strong bond between consumers and contribute to the local economy.
Another interesting reveal is that consumers are more willing to share their data with small businesses, in exchange for discounts and deals. Another caveat is that brands must share how the information will be used.
This is great news for small businesses that are figuring out how to reach Gen Z consumers. It’s an invitation to be more transparent about your business and not be afraid to show what’s happening behind the scenes.
5. Education
Another key component of generation Z’s spending habits is education.
While millennials are one of the most highly educated age groups, Gen Z is on track to have the highest level of education.
In 2020, the Pew Research Center reported that college enrollment is more likely in Gen Zers than Millennials and Gen Xers at a comparable age. They’re also more likely to have a college-educated parent.
At this point, Gen Z’s already been shown to start saving for college at a much younger age than millennials.
As members of the generation enroll in college or begin to spend their own money, news outlets have predicted and reported bursts in school-related purchases fueled by Gen Z shoppers.
Aside from purchasing supplies, Gen Z is also likely to invest in courses or educational programs that will advance their future earnings.
From 2019 to 2020, Gen Z learners watched 50% more hours of educational content on LinkedIn. They also spend 12% more time honing hard skills on LinkedIn Learning than the average learner on the platform.
Ultimately, many researchers believe that Gen Z’s interest in academia is rooted in their need for financial stability. Many in the age group believe that a good education will lead to a great job with high pay.
As a marketer, it’s important to keep Gen Z’s budgeting and educational goals in mind. This generation wants to learn new things, is saving for college, and prioritizes investments that better their future. You’ll need to convince them that your product is worth buying – even when they’re putting most of their money into a college fund.
As you create your product promotions or campaigns, consider how your product could help or benefit the experiences of someone planning for college, college students, or young professionals.
If your product isn’t specifically geared toward education, your campaigns could zone in on how it could improve a college or work-life experience.
For example, if you’re marketing furniture, you could create a promotion that highlights products that would fit in an apartment or dorm room. Or, if you market a clothing company, you could highlight clothing items that could be worn in a job interview in a blog post on your website.
Aside from creating content that directly links your product to career interests or academics, you can also lean into Gen Z’s need to learn new things by developing educational content that teaches audiences about your industry.
After viewing your educational content, audiences might want to learn more about your product and develop a stronger sense of trust for your brand. Later, if they’re interested in buying a product related to your brand’s industry, they might consider your brand first.
If you want to leverage educational content, keep the age range of your audience in mind. While younger members of Gen Z might be primarily interested in B2C brand content due to their college or high-school age, Gen Zers entering internships or the workforce might value educational B2B content that can show them how to get ahead in their industry.
How to Market Based on Gen Z’s Spending Habits
Based on research noted above, Gen Z is less likely to splurge on frivolous products or brand names. As a marketer, hearing about these mounting studies might make you nervous.
But, in the long run, the consumer trend of putting value first shouldn’t scare or shock you. In fact, it should motivate you to ask, “How can I provide better value to my customers?”
Although Gen Z might seem more budget-conscious, this doesn’t mean they won’t buy anything from you at all. In fact, many of your most frugal prospects will still buy, invest in, or splurge on your brand’s offerings if they seem valuable, help them solve pain points, or provide a positive, memorable experience.
Ultimately, bettering your brand, focusing on the customer experience, and promoting positive company reviews will go a long way with Gen Z and all other audiences.
Editor’s Note: This post was originally published in July 2020 and has been updated for comprehensiveness.

2021 was a big year with advertisers, as they managed the remnants of the COVID-19 crisis and pandemic along with growing data privacy concerns.

So, how exactly did advertisers fare in terms of strategy, challenges, and ad spend? To help you prepare for your 2022 strategy, we’ve gathered 27 stats.
You’ll learn which strategies advertisers are leveraging today, which ones they plan to invest in, and the challenges they faced and may face in 2022.
Current Ad Strategies

84% of marketers’ companies run marketing campaigns and for 42% of respondents, advertising products is one of their main goals. (HubSpot Blog Research)
This year, print advertising was a low priority for marketers, with only 19% of marketers leveraging it. It was also one of the least effective channels for advertisers. (HubSpot Blog Research)

Paid social is a top paid channel for marketers. (HubSpot Blog Research)
In terms of account-based marketing (ABM), paid ads were one of the top three tactics marketers used, behind creating custom content and identifying target contacts/roles. (HubSpot Blog Research)
In 2022, 21% of marketers plan to leverage paid social for the first time. (HubSpot Blog Research)
In 2022, around 66% of advertisers plan to respond to data depreciation by 1) learning how to leverage their data in privacy-forward ways, 2) demanding more data transparency from partners, and exploring the adoption and experimentation of artificial intelligence. (Forrester)
Advertisers plan to leverage AI for privacy-safe targeting, identifying conversion-ready audiences, and dynamic creative optimization (DCO). (Forrester)
Around 18% of advertisers plan to divest from print advertising and direct mail (HubSpot Blog Research)
Some advertisers will also divest from physical ads, such as signage and billboards. (HubSpot Blog Research)

Pro-tip: For your ABM needs, consider Terminus (formerly Sigstr). The platform allows you to create and target custom account segments, keep your team in the loop through connected data and insights, and measure your success in a user-friendly dashboard.
Advertising Challenges
In the past two years, data privacy has become a top concern for both consumers and marketers. In 2020, we faced the death of the third-party cookie, with Chrome blocking this type of data tracking. In September 2021, Apple announced that the IOS 15 update will affect marketers’ ability to track user behavior.
All of this has translated into challenges in paid media and many of them listed below relate to data privacy:

65% of advertisers are confident in their creative assets while only 26% are confident in their targeting abilities and only 10% in media. (Forrester)
87% of advertisers believe traditional targeting and tracking methods are at risk today due to data privacy concerns and policies. (Forrester)
64% of advertisers fear a loss of consumer trust in their ads, which can translate into a decrease in brand loyalty. (Forrester)
Most advertisers (91%) believe consumers expect more personalized and engaging ads. However, 87% of advertisers say stricter data privacy implementations have made it harder to scale personalized ad experiences. (Forrester)
85% of advertisers say they have a ton of data but struggle to find privacy-friendly ways to use it. (Forrester)
In 2021, U.S. advertisers spent $153.2 billion on internet ads, $81 billion more than on TV ads. (Statista)
Paid media is the number one place advertisers plan to allocate their marketing budget in the next year. (Not Another State of Marketing Report)
Total ad spending declined year-over-year by 1.2%, driven by a dip in traditional ad spending. (eMarketer)
B2B digital advertising is expected to reach $12.6 billion in 2022. (Statista)

Ad Spend and Budgeting

In 2021, U.S. advertisers spent $153.2 billion on internet ads, $81 billion more than on TV ads. (Statista)
Paid media is the number one place advertisers plan to allocate their marketing budget in the next year. (Not Another State of Marketing Report)
Total ad spending declined year-over-year by 1.2%, driven by a 15.7% contraction in traditional ad spending. (eMarketer)
B2B digital advertising is expected to reach $12.6 billion in 2022. (Statista)

Looking Forward
With data privacy becoming a big part of the conversation surrounding paid media, recent data suggests that the big focus moving forward is finding privacy-friendly ways to target users and track performance.

In 2022, around 66% of advertisers plan to respond to data depreciation by 1) learning how to leverage their data in privacy-forward ways, 2) demanding more data transparency from partners, and exploring the adoption and experimentation of artificial intelligence. (Forrester)
Advertisers plan to leverage AI for privacy-safe targeting, identifying conversion-ready audiences, and dynamic creative optimization (DCO). (Forrester)
Around 18% of advertisers plan to divest from print advertising and direct mail (HubSpot Blog Research)
Some advertisers will also divest from physical ads, such as signage and billboards. (HubSpot Blog Research)
In 2022, 21% of marketers plan to leverage paid social for the first time. (HubSpot Blog Research)

As you think about AI and its impact on your advertising strategy, consider the ad platform AdRoll. It uses AI to personalize product recommendations on various channels, including the web and email. AdRoll also supports other tools so you can connect your ad ecosystem simply and easily.

TikTok.
Clubhouse.
Twitch.
These are just some of the many new social media apps we’ve seen grow in popularity over the past year — and that’s along with all the ‘oldies but goodies’ like Instagram, Facebook, and Twitter.
The expanding list of popular social media platforms undoubtedly makes a social media marketer’s job harder: Which platforms will provide the highest ROI? Where’s your audience hanging out? And which ones aren’t worth the effort?
As the social landscape changes, HubSpot’s Blog team surveyed over 500 marketers to determine the biggest challenges social media marketers will face in 2022 — and how to prepare.
Let’s dive in.

5 Social Media Challenges Brands are Facing in 2022
1. Determining on which platform(s) you should market your brand.
In 2022, 26% of marketers say their biggest challenge will be determining which platform(s) they should invest time and resources.
This makes sense: The most popular social platforms aren’t always the best fit for your brand or business goals, so it can be difficult to determine which apps you should include in your marketing strategy.
To choose the right platforms for your brand, HubSpot’s Senior Manager of Social Media Kelly Hendrickson told me, “It all comes down to your audience. Who is your audience, and where do they spend their time on social media?”
She adds, “[Most] platforms share broad audience demographics data, so even without a study, you may be able to figure out where your low hanging fruit is. If it’s a bit harder to test out a few hashtags related to your business on various platforms to see where your audience is already participating.”
Alternatively, it’s helpful to consider which types of content your audience prefers. For instance, if you’ve conducted market research and found your buyer persona enjoys video content, then you’ve narrowed down your platform(s) to video hosting apps like YouTube, TikTok, and Instagram Stories — to name a few.
Finally, keep in mind your social media goals when choosing your platform. For instance, if your primary goal is to increase sales, then perhaps you want to test out targeted, personalized Facebook ads. If, alternatively, you’re hoping to expand your brand awareness, you might test out some newer platforms like TikTok or Clubhouse.
Additionally, in regards to TikTok, Instagram Reels, or Snapchat, Hendrickson told me, “The data shows that generally each of these channels skews towards a younger audience base. While that may seem less opportunistic if your audience is older, just remember, your audience of tomorrow may be on these platforms.”

2. Creating engaging content.
As a content creator, I can tell you firsthand: Creating content is hard.
And, apparently, most marketers agree. In fact, 24% of marketers say creating engaging content will be their biggest challenge in 2022.
Creating high-quality social media content is time-consuming, so consider how you might get the most bang for your buck by repurposing content across channels. For instance, if you take the time to create a 10-minute YouTube video on a topic, cut short snippets from the video to repurpose on short-form channels like Instagram Stories, Snapchat, or TikTok.
You can also create a social media post with some of the information you researched for the video.
Additionally, Rachael Samuels, the Senior Manager of Social Media at Sprout Social, believes dedicating time, resources, and headcount towards social media is vital for long-term success.
As she puts it, “The social landscape is becoming increasingly saturated with new networks and seemingly endless potential audiences to engage. Social teams of one are no longer enough to keep up with the demand.”
Samuels adds, “As consumer preferences and expectations continue to grow in the year ahead, social marketers require greater investment in their teams and resources to be successful. To get ahead of this challenge, brands must ensure social is prioritized as a critical communication tool and provide their teams with the resources needed to produce creative, relevant, and authentic content.”

Additionally, to truly see ROI from your social efforts, you’ll want to take the time to integrate it into every stage of the customer journey. Perhaps you can use certain platforms for support for existing customers, whereas you use others to reach new audiences.
Samuels says, “Having an integrated marketing plan that addresses social media at each touchpoint of the customer journey is critical for overall business success. When brands fail to invest in social and their respective teams, they run the risk of losing customers and perpetuating burnout.”
3. Finding ideas for new content.
23% of the marketers report that finding ideas for new content is their biggest challenge heading into 2022.
It can be tricky to consistently pitch new ideas for social platforms — particularly when social platforms feel overcrowded with content already.
While this isn’t an exhaustive list, here are a few social media content suggestions when brainstorming ideas for your 2022 calendar:

Post your new blog on your Instagram Stories.
Conduct a poll on Instagram.
Share user-generated content on Twitter.
Create and share website content on Facebook.
On LinkedIn, post articles/stats about your industry.
Highlight milestones of your company on LinkedIn.
Create graphics for Instagram and Facebook.
Show the faces behind the company on Snapchat or Instagram.

To combat this challenge, you also might consider using user-generated content to spruce up your pages. Alternatively, take the time to research what types of content are trending on which platform(s).
Christina Garnett, HubSpot’s Senior Marketing Manager, Offline Community & Advocacy, suggests researching what already exists when looking for new ideas. She told me, “In his book, The Creative Curve: How to Develop the Right Idea at the Right Time, Allen Gannett writes that ‘to create something novel you must know what already exists.’”

Garnett says, “When trying to find the new you must consume and see what kind of content is already available and then look for gap opportunities. Are there questions not being answered? Different perspectives not being shared? Maybe the content exists but not in a format that is tailored for a specific learner or audience.”

Garnett adds, “Once you determine what you can create, you need to determine who needs it, and how it can best be packaged to improve their experience. Content has the same need to find product-market fit as products and solutions do. In the pursuit of the novel, you not only need to determine what doesn’t exist, but why it doesn’t. Creating for the sake of creation isn’t enough when it needs an audience.”
While this research can be time-consuming, it can enable you to position your brand as a thought leader in your industry and will undoubtedly lead to new content ideas.
4. Measuring ROI.
In some instances, measuring ROI can be relatively easy — particularly when it comes to monetary value, such as how many sales you received from a specific Facebook ad.
But when your social media goals involve more abstract concepts, such as “increase brand awareness”, it can be difficult to quantify and measure your campaign’s success.
22% of those surveyed agree that measuring ROI is their biggest challenge as they enter 2022.
Fortunately, measuring ROI across social platforms can be done, but it’s not straightforward. Take a look at HubSpot’s free lesson, How to Measure Social Media ROI, to learn more about how to track social media ROI when it comes to building brand loyalty, retaining customers, protecting your reputation, and more.

5. Creating content that generates leads.
Finally, 22% of those surveyed report creating content that generates leads to be their biggest challenge as we enter the new year.
To create a strong social media lead generation strategy, consider driving your audience from certain social platforms back to dedicated landing pages, or track clicks on specific CTAs for each campaign.
For instance, if you’re running a campaign aimed at driving revenue towards a new product offering, you’ll want to create a product landing page that you link to on each of your social profiles. Then you can track how many clicks come from each page, and alter your strategy accordingly. (If you see most clicks coming from Facebook, perhaps you put paid advertising behind your Facebook strategy.)
Alternatively, if you’re hoping to drive sign-ups for an email newsletter, you’ll want to create a CTA for social pages that drives your social audience to sign-up for your newsletter.
Social media advertising is another powerful way to generate leads through social media.
However, it’s important to keep in mind — to create truly unique social media ads, you’ll want to ensure those ads seem spontaneous and casual.
As Talkwalker’s CMO Elena Melnikova puts it, “The challenge will be brands, used to producing highly-polished commercials, creating ads that come across as spontaneous.”

“Too commercial, and this young audience will scroll past your brand, looking for the next dance routine. Read the room. Follow the trends. Be spontaneous.”

Melnikova adds, “Savvy brands will work with influencers to create content. And with the majority of TikTok influencers being Gen Z, they’ll understand how to ensure their content stands out, and increase a brand’s engagement figures.”
And there you have it! The biggest five challenges facing social media teams in 2022.
Now that you know which challenges you might be up against, take the time to brainstorm unique solutions that will help you level up your social media strategy into 2022 and beyond. 

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