The Wall Street Journal recently ran an interesting story on how General Motors ceased paid advertising on Facebook, citing that the ads don’t translate to consumer car purchases. This story piqued my interest not because of all the hoopla surrounding Facebook’s IPO.
It caught my eye because of a quite different story recently run in The Atlantic entitled "Why Don’t Young Americans Buy Cars?" Accordingly, the answer to that question is not that Facebook as an ad channel doesn’t necessarily make sense:
Unfortunately for car companies, today’s teens and twenty-somethings don’t seem all that interested in buying a set of wheels. They’re not even particularly keen on driving.
The [New York Times] notes that less than half of potential drivers age 19 or younger had a license in 2008, down from nearly two-thirds in 1998. The fraction of 20-to-24-year-olds with a license has also dropped. And according to CNW research, adults between the ages of 21 and 34 buy just 27 percent of all new vehicles sold in America, a far cry from the peak of 38 percent in 1985.
You can read the referenced Times article in its entirety here.
The reason for the aforementioned drop, according to the Atlantic story, is that “youth today” (I can’t believe I just wrote that) “have become notorious for delaying, or entirely skipping, the traditional markers of adulthood.” And don’t forget the recession’s effects on major purchases.
Here’s another possibility to consider: Gen Y is also geared toward a more sustainable lifestyle which appears to make car ownership less tenable for folks born after 1979. Carshare programs like Zipcar have buttered their bread in large part on that notion.
Add the position that Millennials, when “forced to settle down in a suburb, they prefer communities like Bethesda, Maryland, or Arlington, Virginia, which feature plenty of walking distance restaurants, retail, and public transportation to nearby Washington, D.C.” Communities like this are inherent to sustainable living: efficient use of land, alternative modes of transportation, and walkability, among other features.
Is this just a short-term trend that will turn once the economy picks up? California’s SB 375 is the regulatory attempt to expand this leaning. And communities, regardless of enforcement, are realizing the positive impacts (PDF*) of sustainable living. Time will tell, but I am optimistic.
As for GM, I cannot imagine they are wholly unaware of Gen Y’s proclivity for sustainability. It’s really just a matter of turning the steering wheel in a different direction.
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