Report: Gen Z Welcomes Ad Tracking

When Gen Z goes on a voyage of product discovery, they usually do so via social media, and boy, do they like to be tracked—much more so than their older cohorts.

According to findings released today and titled, “From A to (Gen) Z: How and Where Young Consumers Are Shopping,” by Tinuiti, the largest independent performance marketing firm across Streaming TV, Google, Meta, and Amazon, Gen Z seems to have fewer qualms about certain aspects of consumer privacy compared to Boomers (born between 1946-1964). Gen Z encompasses roughly 68 million people in the U.S., born between 1997-2012.

For Andy Taylor, Tinuiti’s VP of Research, one of the biggest surprises in this analysis is “how much more likely Gen Zers are to say they prefer to allow tracking in order to receive relevant ads compared to older cohorts and how much less likely Gen Zers are to take actions like clearing cookies and deploying ad blockers.”

It looks as if these digital natives view ad tracking as a utility and will even opt in to tracking if it means being served relevant and highly personalized ads over more general ones that appeal to a broader range of people.

“As such, effective Gen Z marketing requires strong targeting combined with tailored creative, even as changes in online tracking and targeting aimed at protecting consumer privacy make it more difficult over time,” the analysis advises.

The group was three times as likely as Boomers to prefer to allow tracking when using online news and media sites. They do not want anything to interfere with relevant ad targeting and so are less likely than older age groups. On the other hand, they appeared more likely than Boomers and Millennials to use a VPN (virtual private network) to mask their identity and physical location.

VPNs don’t block tracking of online behavior, though, especially while using apps, including social-media apps. Web sites that have cookies enabled can still track users with a VPN, and as stated earlier, Gen Z welcomes cookies.

Taylor noted, “Individuals use VPNs for a number of reasons beyond restricting personalized ads. While Gen Zers are more likely than older generations to use VPNs, they are less likely to deploy ad blockers, which are naturally very clearly tied to receiving personalized ads.”

For products in CPG, beauty, food and beverage, and over-the-counter (OTC) health verticals, Gen Z indicated it was more likely to have first learned about them via social media, particularly TikTok. For those same categories, Boomers pointed to television as their channel of discovery.

Because brand values, in addition to brand attributes, are highly important to Gen Z, 74%–the highest share of any generation–responded that they used QR codes in-store to determine if products aligned with their beliefs.

“The extent to which social media as a whole, and TikTok in particular, is credited with Gen Z product discovery is astounding,” Taylor noted. “Social media’s influence even extends to the in-store experience, as Gen Zers were far more likely than older generations to search on social media for brands while doing research in stores.”

This behavior, originally called showrooming—conducting online price comparisons while shopping in brick-and-mortar stores—first emerged around 2012, when a comScore study estimated that 35% of consumers aged 25-34 (Millennials) engaged in the practice.

For everyday essentials, Gen Z leans toward Amazon and Walmart first, not much different behavior from older customers but with a stronger affinity for Target than other age groups.

Gen Z also expressed a preference for retail deals on Prime Day, according to responses.

 “Many Gen Zers believe Prime Day is a better opportunity to shop on Amazon than Black Friday/Cyber Monday,” Taylor said.

The report found that just 14% of Gen Z Prime members said that Prime Day was not at all important to their decision to be an Amazon Prime member, the lowest of any generation. But 61% of Gen Z Prime members say that Prime Day is a better opportunity for shopping on Amazon than Black Friday and/or Cyber Monday.

The depth of deals and offers when comparing Prime Day to Black Friday to Cyber Monday tends to depend on the type of items people want to save the most on. Think consumer tech and electronics and the brands thereof.

According to an article on IGN.com, Black Friday has an advantage over Prime Day because more retailers participate in the former, thus increasing the competition for lowest prices. For consumers who want to save money on Amazon-branded products such as Amazon Fire TVs, Echo speakers, or Kindle books, Prime Day is the better bet.

Tinuiti compiled this data from across five different surveys, conducted between February and April 2023, studying responses from more than 5,000 multi-generational respondents to learn about what Gen Zers want in 2023 and beyond.