Gartner Says “Generation Virtual” Will Have a Profound Influence on Culture, Society and Business

Companies Must Change Practices to Target Generation V

STAMFORD, Conn., November 13, 2007 – In 10 years, the largest influence on all purchases will be the virtual experience associated with them, according to Gartner, Inc. By 2015, more money will be spent marketing and selling to multiple anonymous online personas than marketing and selling offline. This transition in customer interaction is being driven by Generation Virtual, also known as �Generation V.�

Gartner analysts said Generation V is the recognition that general behavior, attitudes and interests start to blend together in an online environment. The idea of Generation X (and later Generation Y) was conceived as a way to understand new generations that appeared not to have connections to the culture icons of the baby boomers. Marketers use the categories of baby boomers, Generation X and Generation Y to segment the population for targeting products and services with a focus on age.

However, as more baby boomers (who are living longer) and the younger generations go online and participate/communicate in a flat virtual environment, the generational distinctions break down. Customers will hop across segments at various times of life for various reasons and are likely to act like several generations at any given time.

“For Generation V, the virtual environment provides many aspects of a level playing field, where age, gender, class and income of individuals are less important and less rewarded than competence, motivation and effort,” said Adam Sarner, principal analyst at Gartner. “For example, an 11-year old individual can be the leading “go to” person for advice on how to upgrade/hack a digital video recorder (DVR) for more recording space. An unpopular office worker can be a highly revered, accomplished 40th-level half-elf in World of Warcraft. The opportunity for reputation, prestige, influence and personal growth provides a powerful social draw for the masses to spend more time in a virtual world.”

For companies, it means access to new economies. For example, by 2030, there will be twice as many people over age 65 in the United States with 70 times the real median income of their corresponding age group in 1990. They will be spending more time online engaging as Generation V members. Companies will have new reach (and access to their growing discretionary income) that they could not get before.

“While traditional wisdom has focused on customer identification for one-to-one targeted marketing campaigns, cross-selling and so on, the reality of people creating multiple anonymous personas (such as in Second Life or World of Warcraft), blogs, online communities (such as YouTube and Digg), and the sheer power of their influence means that every customer will have multiple online personas driving business relationships with companies,” Mr. Sarner said.

“Companies will need to shift from collecting personal data about individual customers toward collecting more-complete and more-relevant data around online customer behavior and influence on others,” Mr. Sarner said. “Companies will need new processes, new skills and a restructuring of how data is collected and used as they shift from demographic to psychographic insight. If companies follow a truly persona-centric approach, they can use the highly relevant information the persona leaves. Although the real person may never be known, far more intimate information of the persona’s actions, personality, lifestyle habits and attitudes can be collected and exploited for business goals.”

Recommendations to Target Generation V:

  • Companies should organize their products and services around multiple online personas.
  • Sell to the persona, not the person. A persona will show you how it wants to be treated.
  • Create virtual environments as a way to orchestrate customer exploration toward purchases.
  • Shift Investment from known customers to unknown ones. Focus on the influencers within the meritocracy.
  • Develop and retain or outsource new skills to attract, connect, contribute and gain insight from Generation V and its virtual environment

About Gartner:

Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is the indispensable partner to 60,000 clients in 10,000 distinct organizations. Through the resources of Gartner Research, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,900 associates, including 1,200 research analysts and consultants in 75 countries. For more information, visit