Yahoo Finance Meta bets big on Gen Z gold rush with new AI features
Celebrity-inspired AI personalities and generative AI stickers could pave the way for Meta's long-term growth — if the tech giant does it right.
Meta (META) is embroiled in a fight with TikTok and other social media companies for Gen Z's attention and dollars.
That was made clear on Wednesday, when the tech giant unveiled a wide range of artificial intelligence features, from chatbots with personality to AI-generated stickers. In addition to Meta's conversation assistant, Meta AI, users will be able to interact with AI personalities based on celebrities such as Tom Brady, Naomi Osaka, Snoop Dogg, and Kendall Jenner, and generate customized stickers.
Meta has made plays directed at Gen Z before. Reels, for instance, are played 200 billion times daily, according to Insider Intelligence. But this would be Meta's first AI-forward outreach to the demographic, and experts are divided about the extent to which the play will work.
Kobie Fuller, a partner at Upfront Ventures and AI investor, thinks the idea "has legs with the proper execution" but that it still has a ways to go, especially when it comes to Meta's new celebrity-referencing chatbots.
"From the way it was initially marketed — or lack thereof — it just seems cringe," Fuller told Yahoo Finance in a phone interview. "It's this random alter ego of a celebrity that you can talk to. The profile says 'managed by Meta'... If Naomi Osaka is going to have an alter ego, and it's not really her account, that doesn't seem like it's primed to feel authentic."
The stakes are high since Gen Z is a coveted demographic among retailers and tech giants alike. Meta's AI chatbots will compete with a growing field of others online and on social media apps, including OpenAI's ChatGPT and Snapchat's My AI.
McKinsey research suggests that Gen Z are willing consumers, even in times of economic volatility. Additionally, Aisera CEO and founder Dr. Muddu Sudhakar estimates that "Gen Z represents more than 40% of global consumers." About 20% of the US population is currently considered to be Gen Z.
Younger demographics are especially compelling when it comes to AI. According to University of Pennsylvania professor Chris Callison-Burch, as digital natives, "Gen Z is likely to be the biggest adopter of generative AI."
On one hand, Gen Z is more likely to engage with the AI features that Meta is building out than baby boomers or even millennials. On the other, they're also skeptical, according to EY data aggregated in the company's "2023 Gen Z Segmentation Study."
It's vital that companies get the rollout of a new AI product right. Otherwise, Gen Z will just move on.
"There's so much stuff out there that works badly," Marcie Merriman, EY Americas cultural insights and customer strategy leader, said in a phone interview. "Throwing something out there when it's not ready for prime time can backfire and create mistrust. ... If technologies come out, and they're not working well, you can lose a generation of users."
Still, for Meta — and any company looking to get a foothold with Gen Z — this isn't just about whether the younger generation massively adopts new AI features immediately.
"This revolution will take 10 years, 20 years," Sudhakar added. "Gen Z will grow up with it, and it's a long-term investment."
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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