Kids, Young Adults Now E-Commerce Force

Kids and young adults between the ages of 18 and 24 are spending a projected $164 billion (US$) online per year, according to two new studies by Nickelodeon Online/Harris Interactive KidPulse and MTV/Harris Interactive KidPulse.

The figure accounts for 13 percent of total spending by this age group, the studies found, and also represents a four-fold increase over the rate of e-commerce spending among all adults. Among the items most likely to be purchased by this segment are clothes, music, books and video games.

“The study shows that this is a truly digital generation,” said John Geraci, vice president of youth research at Harris Interactive. “Online youth are no longer a segment, but they have become the mainstream.”

Capturing the Niche

The studies also found that the economic resources of the 18 to 24 year-old group changed dramatically as children entered the teen years. Younger children are fully dependent on their parents for income, while teenagers and young adults can generate their own cash flow.

For example, almost 40 percent of income for pre-teens was derived from allowances. In contrast, by the age of 16, three-quarters of their earnings came from paid jobs.

Such statistics may provide an impetus for companies to undertake marketing campaigns aimed at this niche.

“Advertisers using new media need to realize that the Internet influences more than direct e-commerce spending,” said Geraci. “This study found that 69 percent of online 13-24 year-olds research products online before they buy them in traditional, brick-and-mortar outlets.”

Although another report released on Monday by AdRelevance found that online advertisers who want to reach children are shifting their focus to parents, the Nickelodeon/Harris study maintains that children wield a considerable amount of fiscal power in families.

“Online kids are very involved in family purchases,” said Melva Goffney, director of research and planning at Nickelodeon Online. “For instance, this study showed that 75 percent of online 8 to 12 year-olds influence which groceries the family buys. Almost half influence their parents clothing choices. And, 7 in 10 said they have a major influence on where the family decides to go on vacation,” she added.

The studies, conducted online by Harris Interactive, interviewed 3,878 respondents this past July.

Advertisers Beware

Many analysts agree that e-tailers should focus on the growing purchasing habits of young adults in the U.S. since they represent one of the most Net-savvy segments of the Web marketplace.

However, attention-grabbing advertising that has been successful in targeting the youth niche is increasingly coming under fire.

In a separate year-long study released on Monday, the Federal Trade Commission (FTC) harshly faulted the entertainment industry — one of the largest suppliers of youth-oriented products and services and a major online advertiser — for marketing violent movies and games to kids.