Wharton's Keith Niedermeier and Barbara Kahn discuss the characteristics that set millennials apart from previous generations.

Members of the millennial generation are far less trusting than baby boomers or Generation X. Also, unlike their older counterparts, millennials are far more likely to rely on technology to make informed decisions. As director of the undergraduate marketing program at Wharton, adjunct professor Keith Niedermeier has specific insight into this group: He’s been teaching a core marketing course to millennials since they started college about 18 years ago.

Recently, Niedermeier spoke to Wharton marketing professor Barbara Kahn about the unique characteristics of millennials and the profound changes taking place in mass marketing, advertising and messaging. The interview took place on Wharton’s Marketing Matters radio show, which airs on SiriusXM channel 111. (Listen to the full podcast using the player above.)

The following are key insights from the conversation:

Millennials are defined by digital.

Generational studies point to common factors that create and define a cohort. For millennials, the top definer is digital. Millennial lives are built around the information revolution, which includes the internet, texting, email, social media and online shopping.

“[Millennials] use technology in a much more native fashion and integrate with it in ways that I just don’t think people in previous generations quite comprehend.”

“Marketing has changed so dramatically,” Niedermeier told Kahn during the interview. “There’s a much bigger emphasis on digital and digital economy. The promotional aspect of it has changed dramatically. When I started teaching the class, even before I was here at Wharton, there was no such thing as internet advertising. That’s about 40% of media spend now, so that’s a big change.”

Niedermeier and Kahn are part of Generation X. While they both consider themselves to be tech savvy, their skills don’t rival those of millennials.

“You like wearables, you use all the devices,” Niedermeier said to Kahn. “But no matter how comfortable you and I are with those, no matter how we use them, we are not digital natives like they are. They grew up swiping and on the internet. That’s where they have their experience. They’re not in the library looking at books.

“We will always be digital immigrants, and they will always be digital natives. I think they use technology in a much more native fashion and integrate with it in ways that I just don’t think people in previous generations quite comprehend. I think that’s really changing the way they consume music, the way they consume media, the way they react to marketing.”

Millennials are defined by the financial crisis.

Millennials currently make up the largest generation by comparison. They account for about 92 million people in the United States, while Gen X stands at 61 million and baby boomers are 77 million.

But most millennials are not enjoying the same economic prosperity or security as their elders.

“Mirroring some of the things that are going on in our broader economy, there’s kind of a bifurcation of their buying power,” Niedermeier said. “They graduated with huge, huge debt — an average of about $22,000 each of college debt. Their salaries have less buying power compared to previous generations at the same age. A lot of them are facing economic strife. On the other end of the continuum, millennials make up about 13% of high-net-worth households. That’s a huge percentage of what we call HENRYs — high earners, not rich yet.”

This paradox can be explained by looking at the wealth distribution, he said. A recent study by Bank of America showed $40 trillion in assets will move from baby boomers to their millennial heirs in the next 20 years.

“There’s a huge influx of wealth coming through inheritance as well as entrepreneurial pursuits,” Niedermeier said. “When you look at the 13% of high-net-worth households that are millennials, that’s where most of that’s coming from.”

Millennials also approach investing differently than previous generations because of the financial crisis.

“The kind of psychological impact of the recession was that a lot of people graduated, got jobs or were a few years into their first job, starting to stock that 401k, and then boom, that value’s lost, layoffs, lost their job. The job market dried up. You have this touching-the-stove phenomenon where they were really burned with the economy,” he said. “What we initially started to see is millennial investors and millennial consumers became very, very conservative. Most identified themselves as conservative investors, which is kind of backwards to what you expect.”

“You have this touching-the-stove phenomenon where they were really burned with the economy.”

It’s not that millennials are risk-averse, he said. Their risk tolerances have shifted.

“Millennial investors were much less believing in the stock market, very conservative about stocks, about institutions, about traditional avenues, but much more accepting of entrepreneurial investment, venture capital, which are inherently much more risky,” Niedermeier said. “Investing in your own business or your friend’s business, or buying investment property even though they don’t own their own homes — those things are inherently more risky.”

Millennials are defined by a fragmented culture.

Every generation has cultural icons along the path that help mark the journey and give shape to shared experiences. Those touchstones can be music, art, movies, television or trends in clothing. There’s the disco era of the 1970s, with spread collars, bell bottoms and platform boots. The 1980s was the era of conspicuous consumption, so bold makeup, bright colors, fast cars and loud music were in order.

But millennials don’t have a cohesive culture, thanks to the internet.

“Technology has affected music and affected media consumption,” Niedermeier said. “When you look at those different generations, there’s shared cultural experiences of movies, television, music. But that’s becoming less and less true because those industries are so much more fragmented. It would be hard to name one band or one movie or one television show that’s defining of our students right now.”

“Your brand and decision-making have to have this consistency across all these points. It has never been more important than with this generation.”

Shows like “Friends” or “Seinfeld” defined 1990s television and “were like the town squares of our generation,” he said. “I could tell you 10 albums that everyone my age had. That’s absolutely not true, even electronically, of this generation. From a marketing perspective, that becomes a huge challenge because there’s not one band or one pop star or one television show that everyone connects with.”

It’s increasingly difficult for marketers to target millennials as an audience because of this fragmentation. Millennials are using multiple platforms and gathering information from multiple sources.

“When you look at the things that influence their decisions, value and price is No. 1. But that’s mainly because they have the savvy and the ability to get all this information very quickly,” Niedermeier said. “Recommendations are No. 2. The decision-making is multifaceted. It’s a cliché at this point, but it’s much more of a journey than just capturing that one sale and closing that one sale, one time. Your brand and decision-making have to have this consistency across all these points. It has never been more important than with this generation.”

Millennials are defined by their skepticism.

A recent Pew study showed that millennials hold a lower degree of trust in institutions compared with previous generations.

“I think a lot of it has to do with the recession,” Niedermeier said. “When you think about things like big business, 6% of millennials have a great deal of trust, 12% have quite a lot of trust in big business. At the top of their trust list is small business. Thirty percent have a great deal of trust, and an additional 38% have quite a lot of trust in small business.”

The same study showed 19% of millennials trust each other, compared with 40% of baby boomers. But an overwhelming 93% of millennials said they use online reviews in their purchase decisions. Of that number, 97% trust those reviews.

“I think there’s a certain authenticity that is craved by this generation that’s hard to fake. And I think that’s difficult to capture when you don’t have native millennials [on staff].”

“That’s such a weird paradox. I think it’s because there are so many more sources of data that they’re comfortable with,” Niedermeier said. “I just don’t have to ask my neighbor or believe an advertisement anymore. I can go to hundreds of Yelp reviews for a restaurant. For Amazon, thousands of reviews. We have a discussion in my advertising class and my consumer behavior class every year about this. I say, ‘Are you aware that many of the reviews are fake? That these things might be planted? They might not be real?’ Of course. But after you sift through them, you see the summary data, all of these things. It’s really this combination of the anecdote, their own research data, multiple sources. It’s connecting the data and their experiences together.”

Their skepticism translates into a need for authenticity. Millennials demand it, and marketers have trouble delivering it.

“It’s not enough to put a hashtag in front of a tagline. It’s not enough to change your menu to have avocado toasts,” he said. “I think there’s a certain authenticity that is craved by this generation that’s hard to fake. And I think that’s difficult to capture when you don’t have native millennials [on staff].”

It’s clear that what millennials trust most is data.

“I think you see millennials charting their own paths,” Niedermeier said. “When you look at the number of startups, technology, technology investments, people creating their own social platforms, when you look at almost every social media, these are things that have been created by the millennial generation. I see millennials turning to each other and turning to creating these solutions, and also relying on technology as a solution.”