American teenagers have been called the “golden egg” for marketers. No previous generations have been able to access the technology that allows today’s teens to purchase products from around the world at the click of a button. Advertising has diversified and grown to dominate every form of digital media, creating a new generation of consumerist teens eager to purchase whatever they can to fulfil demanding standards of beauty and cool. Most American teens may not be able to drive, buy a house, or even vote, but they represent a market worth billions of dollars.
Only 38% of teens report that they’re actively saving money, according to Marketingvox and The Rand Youth Poll that surveyed more than 8,000 teens. Only 22% report they’re saving more money than the previous year. Among the most important expenses like college tuition, 57% of teens who are saving are doing so for new clothes, and 36 % of teens are saving for a new car.
Research also indicated that today’s teens below the age of 18 prize the dollar value over life experiences. Despite what the fans think, 81% report they would accept $1,000 over meeting the pop star Justin Bieber. Even personal relationships can’t stand up against money for some – 27% of girls surveyed in Seventeen Magazine say they would break up with their boyfriends for $10,000.
According to Tina Wells, the author of Chasing Youth Culture and Getting It Right, a new generation of teens have become spending juggernauts. In an interview with CBS Money Watch, Wells stated that “tweens” – 8-12 year – have an income that is “truly more disposable” than any other age group. In other words, what little money they have — an average weekly allowance of $9 — is theirs to spend on whatever they desire. As the statistics and experts suggest, it seems the most important things for the ‘tween’ generation are social status and self-image in a world where they’re told they can buy exactly those things.
There are some further startling figures behind teen and tween spending in the United States. The following list presents and expands upon some staggering numbers in teen spending, which shed light on why marketers are clamouring to sell to American teens.
5. Annual Income for 12-14 year olds: $2,767
How much is there for 12-14 year olds to buy? Apparently there’s plenty: According to a study conducted by the Kaiser Foundation, two-thirds of kids between the ages of four and seven use an iPhone and American youths consume more than seven hours a day of digital media.
Unlike their parents, who pay bills and have mortgages to save for, tweens are free to spend whatever money they have (largely from their parents) whenever they want. For a kid whose financial independence is a long way in the future, there’s little intention of keeping piggy banks intact. The average annual income for tweens is less than $3,000, a large amount for a group of people who probably don’t know the true value of a dollar and are particularly susceptible to manipulative marketing tactics.
4. Annual Income for 15-17 Year Olds: $4,923
Teens aged 15-17 years have double the income of their younger brothers and sisters, as many are at the age where they’re able to take part-time jobs. These are the formative years when teens are discovering their identity and are highly susceptible to societal influences. Almost every teenager wants to fit in and be a part of the crowd and will succumb to certain trends to be accepted — everything from Air Jordan sneakers to the latest piece of must-have tech.
Teens are especially sensitive to depictions in the media that influence their body image. As Teen Health points out, the media regularly comments on how people (especially women) look and act, creating a “perceived level of importance of physical attractiveness” for teens. These depictions create unrealistic standards of how both male and females should look and behave. To live up to the media’s ideals of normality, teens have no problem spending whatever it takes to “positively” alter their appearance and behaviour. To do that, teens buy clothes, make-up and other products that reinforce their personalities.
3. Annual Teen Income: $91.1 Billion
The total income for tweens and teens in America adds up to a massive number – and almost all of this is disposable income. These are billions of dollars which, as the statistics suggest, are spent rather than saved and don’t go towards bills or mortgages. For the younger generation, yet to secure full-time careers, the majority of their income comes from one or two places: part-time employment and generous parents.
According to the Bureau of Labor Statistics and the Census Bureau, the majority of part-time workers in America are the young. “Relatively few of them live below the poverty line,” says James Sherk from The Heritage Foundation. “Their average family income is over $53,000 a year.” These numbers indicate that American teens are not struggling to make ends meet. Teens’ income will probably increase with President Barack Obama’s plan to raise the minimum wage to $9.00.
2. Money Spent on Teens: $157.6 Billion
More staggering than the amount of teens’ disposable income is the money spent on them. Parents spend more than $150 billion on care for their teenage kids, including clothes, food, shelter, entertainment and personal accessories. Marketers know that teens aren’t the only target. They also appeal to the good nature of parents by advertising products or services that claim to be either beneficial or essential for a teenager.
As any parent knows, teens can be extremely persuasive when a parent is the only thing standing between them and the new must-have. Sally Koslow discuses how teens are experts in taking advantage of their parents in her book Slouching Toward Adulthood: Observations from the Not-So-Empty Nest: “Our offspring have simply leveraged our braggadocio, good intentions, and overinvestment.”
1. Total Teen Spending: $258.7 Billion
So, we know that teens are making money and having plenty of money spent on them: It’s no surprise, then, that marketers are competing to get a piece of the pie, especially when the total pie is worth almost $300 billion.
According to a report on teen spending by Piper Jaffray, the top 3 industries in which teenagers spend their “hard-earned” money are clothing, entertainment and food. The other leading industries are personal care (appearance), cars, concerts and video games. Depressingly, second to last on the list is books.