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Does your business serve Gen Y? If so, your #1 network should be Twitter, not Facebook.

Historically, moms, teens, and college students have been the most sought after (and most difficult to understand) marketing demographics. Get these groups on your side and your product will be a success, especially when you are a small business looking for brand awareness and lead generation.

The good news is that all three of these groups now fit under one larger group – Generation Y. According to The Parents Network, 68% of all births are to millennial moms (not Gen X). College students round out the middle of this generation, while teens are at the tail end.

It’s a no-brainer: most companies need to pay more attention to Gen Y marketing because this is the ultimate target demographic right now.

Gen Y is headed to Twitter

While Facebook’s average age has risen from 26 to 33 in the last year, Twitter’s average age is steady at 31 – and it’s dropping. Twitter is now the second youngest network of the big 4 (MySpace, Facebook, Twitter, and LinkedIn). Furthermore, Gen Y now accounts for around 50% of Twitter’s network (if you assume Gen Y starts with people born in 1978 or later, making the demographic 31 years or younger).

This is good news for companies, especially those frustrated with low traction on Facebook fan pages. Compared to Facebook, Twitter is a more open platform that people use to get information from an extended network, rather than a tight knit network of friends. Twitter also works well for providing the information Gen Y values from companies and plays into the way Gen Y discovers products naturally.

From a company’s perspective, Twitter is far better for connecting with Gen Y than Facebook. Here’s some more evidence:

Gen Y wants honesty and optimism

According to research from Hill & Knowlton, there is a direct correlation between a company’s reputation and willingness of consumers to act (in most cases, purchase products or services). The research found that right now, early post-recession, consumers care most about companies that demonstrate honesty and optimism. Obama leveraged this emotional need to win the election, and other smart companies are also using this insight to their advantage.

Ford, for example, has seen success in the market recently due to better quality products (Consumer Reports rates them next to Honda in a recent issue) and its bailout rejection earlier this year. The company has been honest and optimistic over the past 6 years, but this wasn’t clear to consumers until recently. Social media, especially Twitter, has played a powerful role in Ford changing its reputation, and the 3rd quarter earnings prove it. (The company’s next target? Gen Y.)

Consumers want honesty and optimism, and to Gen Y this comes down to being transparent and authentic. Twitter is a fantastic way for companies to demonstrate these traits. Facebook? Not so much.

Gen Y looks to communities to deal with major life events

Gen Y as a demographic is going through huge life changes right now: graduation from high school or college, moving out of the house, getting married, starting new jobs, and starting families. According to a study done by Mr. Youth, the way Gen Y deals with life changes is by turning to online communities for support.

Facebook is an online community, but most of Gen Y still operates with a closed network. For Gen Y, Facebook is not a place to network with new people or to share information. The foundation of a community consists of new contacts and new information, making Facebook a horrible place to build new communities (but a great place to nourish old ones). Twitter, on the other hand, is all about experimenting with your community.

Companies that help Gen Y build communities around life events win, and Twitter is the perfect place to find and engage individuals to form a community.

Gen Y wants to connect on a personal level

Gen Y is obsessed with customization, from their music lists to their sneakers to their vampire novels. The demographic has also been bombarded with advertising during their lives, so they can smell BS through their iPhones.

Gen Y wants you to connect with them personally. There is no shortcut. Email automation doesn’t work, and Facebook makes it almost impossible to connect on a personal level unless you actually know someone personally. But on Twitter, “personal” is built-in – it’s first and foremost a conversation tool.

Gen Y gets annoyed with product campaigns

Gen Y, more than any other generation, learns about products through their peers rather than advertising. This means that one-and-done campaigns don’t work nearly as well as building long-term relationships with this demographic, because you want brand advocates and good reviews instead of immediate action.

Campaigns that use incentives are effective, but only if you are looking for very short-term results. In the long run, you can’t force Gen Y to talk about you, and this demographic will run from anything that asks them to do anything that even remotely seems like spamming their friends. Instead, you should build a platform of useful content that builds trust, establishes credibility, and keeps Gen Y coming back. Eventually, a portion will come back as customers.

You can build a platform on Facebook, but it’s not easy if you don’t have a loyal fan base already. (That’s why they’re called “fan” pages.) If you are looking to build brand awareness on Facebook and you don’t want to spend money on ads, you’re stuck. But Twitter is one of the easiest places to build a platform because people are open to connections, your content can be short (the opposite of blogs), your profile is easy to maintain, and viral ideas spread in real-time.

The stars are aligned.

Gen Y is getting on Twitter, which just so happens to be the best place for companies to reach them. According to Marketing Profs, SMBs also plan to step up their Twitter game in 2010, especially younger companies which are presumably focused on building brand awareness and finding customers.

To me, the Gen Y marketing trends are pointing to Twitter, not Facebook.

What do you think? Have you seen more success on Twitter or Facebook?

I also want to hear from Gen Y – do you connect with companies on Twitter or Facebook?