In 2012, the youngest members of the next generational cohort—Millennials—turned 18. Similar to preceding emerging young cohorts, they live in the present: For the majority, the present is economically constrained. For example, other than smartphone manufacturers and smartphone and internet-plan providers, few business categories are aggressively pursuing Millennials. Financial institutions are tepid about wooing Millennials, because the majority have few financial needs beyond basic products, and the auto industry is struggling to determine if—and if so, when—Millennials might fall in love with cars.

Born between 1977 and 1994—as defined by global-research-firm GfK—Millennials represent roughly one-third of all US adults: 73 million. As a group, Millennials are more ethnically diverse and better educated than previous generations, and they are optimistic, technology enabled, and social-media addicted. However, Millennials are a psychologically diverse group. Forty-two percent are motivated by achievement; they are aspirational and seek peer approval. Forty-two percent are motivated by self-expression—they desire social or physical activity. Nine percent are on the road to self-actualization, 2% are motivated by ideals—they are guided by knowledge and principles, and 1% are constrained by education and economic factors, as well as a lack of interest in living a rich life. High-resource Millennials (they have education, economic resources, and self-confidence, for example) are a marginally smaller group than low-resource Millennials. The number of Millennials makes them roughly equal in size to Baby Boomers. Similar to Boomers, Millennials split into two waves. Older Millennials (those between the ages of 25 and 35) are somewhat larger in number (57%) than are Younger Millennials (those between the ages of 18 and 24). The "haves" (those earning an income of $50 000 or more annually) are about one-quarter of Older Millennials but fewer than 5% of Younger Millennials. The "have-nots" are struggling on all fronts.

Older Millennials grew up in the era of Michael Jackson's Bad, benefits concerts, the fall of the Berlin Wall, and the Challenger disaster. Younger Millennials lived through the OJ Simpson trials, the Oklahoma City bombing, and the introduction of Netscape, Google, and the iMac. Other comparisons and contrasts between Baby Boomers and Millennials are useful. For example, Millennials are the first generation to be weaned on technology; Boomers are the TV generation. Boomers are the product of Depression-era parents toughened by WWII; Millennials are the creation of a society in which parents are friends who promote self-confidence and self-expression (often) over the reality of the possible. Most Boomers were anxious to establish their independence; Millennials are not. Boomers parents are less likely than their own parents were to cut financial ties with their offspring.

The number of Millennials-headed households has grown significantly, from about 5 million households in 2002 to almost 30 million households in 2012. Nevertheless, Millennials household formation lags behind that of Boomers or Gen X when those cohorts were the youngest: Almost one-third of Millennials have returned to their parents' home (Boomerang Kids), according to GfK MRI spring 2012; fewer than half of Millennials are household heads. Women Millennials are establishing their independence at a somewhat faster rate than are their male counterparts. Of Millennials-headed households, one-third struggle to make ends meet, and about one in ten require financial assistance, reports SBI's MacroMonitor, a biennial macroeconomic survey of US financial households. In 2011, more than two in five Millennials households had an annual income of less than that of all US households. All Millennials have experienced the effects of the 2008 Great Recession. If the comparison between older and younger Millennials holds true as it has for Boomers, older Millennials will reap greater gains than will the younger wave.

Financial constraints, such as the sluggish economy and student-loan debt result in slow Millennials-household formation. The increased percent of college-educated Millennials women contributes significantly to delayed marriage and lower fertility rates; fewer than half of Older Millennials are married, but over half of all Millennials are parents. Several global studies report that fertility rates decrease as women attain higher levels of education. A September 2012 Time Magazine review of Hanna Rosin's book The End of Men suggests that some Millennials women, in fact, seem content with a hook-up culture—"friends with benefits"—as they pursue a postgraduate degree and establish a career. These women aren't yet willing to carve out time for a relationship. Increasingly, educated Millennials women have difficulty in finding a mate with a corresponding level of education, a responsible job, and a respectable credit score. Overall, online dating is not of interest to Millennials because most have large social networks from which to identify potential mates. The percentage of Millennials who participate in online dating is in the single digits; almost three times as many watch a movie online, and more than four times as many download music.

The majority of Millennials are at the forefront of social change. For example, many believe strongly that equality is important in both gender and sexual orientation and that pay inequality is discriminatory. Many don't understand why the debate about birth control and abortion still rages. "Face time" is now acceptable as a "connection"; engagement in actual face-to-face time is not necessary; 24/7 online connectivity replaces some physical interaction. Many are not shy about defriending on Facebook, and some portion think it's perfectly OK to break off a relationship via an email or text message. The majority of Millennials are highly social and, similar to previous young generational cohorts, continue to participate in a wide variety of activities such as playing sports, dancing, or going to bars and nightclubs. The economy has curtailed the frequency with which many participate in pricey behaviors such as theater or movie attendance and concertgoing.

Almost two-thirds of Millennials seek variety, novelty, and speed; about one-third can possibly afford to be active as consumers. Overall, Millennials are irreverent and appreciate a constant feed of new sound bites—not too heavy on real information, just enough to peak their interest. For example, public-radio station WBEZ in Chicago, Illinois, is launching a "We Want Listeners Tomorrow. Go Make Babies Today" campaign that aims squarely at Millennials. Most Millennials get it. But not all Millennials fit this description. Some are quite mature for their age, responsible, focused, and hard working. Not surprisingly, these Millennials are the most likely to have money to spend.

Marketing to Millennials can be a bit tricky. Numerous indications suggest that culturally they differ from previous age cohorts. Fast-paced, humorous advertising may not play well to Millennials who can afford to buy. Online-advertising channels may be more efficient, but placement choices are practically limitless. Mobil apps are quite attractive to Millennials, but few companies have figured out how to make money. Big data abound, but few big ideas currently exist about how to harness its power and put it on the ground to good business-model effect. Millennials' future consumer needs are in flux until issues such as jobs, housing (rent versus own, urban versus suburban), and transportation (vehicle ownership versus mass-transit use) find resolution. Millennials warrant a close watch.