A dozen college-age strangers recently spent three weeks living together so they could be observed while working to launch an imaginary Internet venture.
Real World takes a dot-com twist? Nope.
Peering in on them were researchers for Microsoft Corp., one of a growing legion of tech companies scrutinizing the habits of young people to understand what may appeal to them today and decades from now.
Global titans such as Microsoft, Sony Corp., Nokia Corp. and AOL Time Warner Inc. are paying more attention to kids–the customers who are supplanting business people as trendsetters for high-tech products and services.
“They dream and imagine new possibilities, and we’re starting to see how we can bring those things to market,” said Tammy Savage, the Microsoft research executive charged with studying the next generation of consumers. “It’s very exciting.”
Kids are using technology differently, mostly because they’re less afraid to try new things.
Savvy about technology, today’s teens have never known a world without PCs and mobile phones. The youngest among them were mere kindergartners when Microsoft made the Windows 95 rollout a cultural event and AOL lured millions to the Internet with flat-rate monthly pricing.
“You have to use the Internet for everything,” said Eric Gebauer, a high school senior. “If you don’t have it, you’re in real trouble.”
The numbers are huge: There are 1.1 billion people worldwide between ages 10 and 19, not quite a fifth of Earth’s population. Included in that age group are nearly 41 million Americans, about 14.5 percent of the U.S. total.
Put another way, those are potential customers, and consumer technology companies don’t want to miss out.
“Instead of leaving a note on the fridge, they send an e-mail,” said Todd Schrader, vice president of strategic marketing in Sony’s personal mobile products division in Park Ridge, N.J. “This generation is connected. They’re empowered beyond any generation of teenagers before.”
Enlisting anthropologists for its studies of teens’ technology habits, Microsoft tracked younger teens through the school day up until bedtime, closely watching how they blended technology into their daily routines. For the strangers-under-one-roof experiment, Microsoft brought together a gang of creative types that included college art and drama majors.
It learned that even though the students played down the importance of the Internet in their lives, they would hop online before they got their morning coffee and fire off instant messages through the day.
“The Internet is like oxygen for them,” Savage said, explaining the disparity between word and deed. “I don’t necessarily wake up and think, `Oxygen is important to me.’ The same dynamic is happening for them.”
For years, tech companies bet heaviest on tailoring products to so-called road warriors–business people who love gadgetry and can get their employers to pay for it.
But teens’ affinity and appetite for technology have made them a lucrative market in their own right, especially against the backdrop of a devastating slowdown in corporate spending. Their age tantalizes tech companies even more: If they become loyal customers now, the reasoning goes, they could be kept for life.
Small wonder, then, that tech marketers are devouring whatever research they can on kids’ tech interests.
Instant-messaging boom
The teen communication form that interests experts most: text-based instant messaging. “When you’re 14 or 15, there’s nothing more important than keeping in the loop,” said Greg Clayman, vice president of marketing for Upoc, a New York-based research and consulting firm that specializes in wireless technologies.
AOL’s Buddy List feature, introduced in 1996, allows its users to see when friends, family and other contacts are online. It has far exceeded the company’s expectations, making the instant message as much a part of today’s teen dialogue as phone calls.
“There were always multiple dialogues, but it was serial,” said David Gang, executive vice president of product marketing for America Online, a unit of AOL Time Warner. “You meet a cute girl at school. You call her best friend on the phone and ask, `What should I say to her if I call?’ Now, it’s all happening simultaneously with computers.”
A teen on a PC might well use three-way conferencing on the family phone while carrying on multiple instant-message conversations at once, perhaps shoulder-to-shoulder with a friend on a wireless call.
“Almost every single night, there’s a bunch of us online doing homework together,” said Drew Layton, 17, a high school senior in Plano, Texas. “We IM constantly.”
In teens’ wake follows American business. Companies that once might have found instant messaging a mere curiosity have adopted the format as an efficient method for employees to collaborate on projects.
“Kids have shown the way, and this is now an enterprise tool,” said Michael Karasick, director of embedded development for the pervasive computing division of IBM in Austin, Texas.
Nokia, the world’s biggest cellular phone-maker, enjoys a reputation for being particularly adroit at watching young people. Its designers, scattered around the world, look for fringe movements that probably will become mainstream within a few years.
“They work much more like the fashion industry,” said Nokia spokesman Keith Nowak. “They are looking at materials and textures, not necessarily what technology is going to be hot.”
Though style on the surface quickly changes, companies have learned a couple of rules to live by when marketing to teens. Devices should be customizable, sleek and small. Add-ons that appeal to teens account for a growing portion of sales for wireless carriers and handset makers.
Teens choose interchangeable faceplates, colorful covers and funky antennas, but most adults limit their customization to ring tones.
“They are integrating their personalities into their handset,” said Randy Smith, Samsung Telecommunications America’s vice president of marketing and business development for wireless terminals. “Really, all you have to do is walk through the mall. What you will see there are all these kiosks that have appeared to sell accessories.”
Sony, which research shows is regarded by teens as one of the “coolest brands,” was one of the first big companies to focus so heavily on young people.
For its current marketing campaigns, the electronics giant developed an alien character named Plato, a college student who always listens to a Sony Walkman personal stereo.
“One thing that’s always been the same about teens is their love of music,” said Sony’s Schrader.
How, where and when they tune in is different, though.
Yesterday’s youth shortstop or point guard probably didn’t want a personal soundtrack on the field or on the court, and it certainly wasn’t feasible. But many of today’s skateboarders and BMX bikers tie their music with their activities.
Products such as Sony’s aerodynamic-looking S2 Sports Net MD Walkman are intended to blend into the gravity-sports milieu. Moreover, its digital downloads from the Internet give users a universe of music possibilities and a connection back into other technologies popular with teens.
Guessing about the future
So what’s not to like about a customer base that gobbles up new technology, embraces new styles and is young enough to stick around for decades?
Answer: uncertainty.
Researchers are grappling with how teens’ fascination with technology might affect their patterns of communication as they mature.
“Will they operate differently as humans?” said Laura Groppe, chief executive of Girls Intelligence Agency, a marketing research firm in Los Angeles. “They have new ways of talking to each other and, ultimately, an immediacy you didn’t have before.”
Billions of dollars in potential profit ride on corporate decision-makers’ judgments about how those teens will communicate, compute and entertain themselves in the future.
Executives can find little comfort in the technology industry’s history. It hasn’t always been the best forecaster of the social dynamics that flow from its own products.
European teens’ enthusiasm for short message service, for instance, surprised tech companies because it was designed for business users.
“If anybody told you they developed SMS with 18-year-olds and 17-year-olds in mind, they would be lying,” said Nokia’s Nowak.
