Everything you need to know about marketing to Gen-Z on Microsoft Advertsing
As a generation, Generation Z (Gen-Z) possess a unique set of characteristics that make them a particularly valuable audience to advertisers. This group, born between roughly 1997 and 2012, has two billion members worldwide and valuable spending habits.
Contrary to popular belief, Gen-Z is actually very active across the Microsoft Advertising ecosystem, both through traditional browsing and Microsoft owned and operated properties, like Xbox, Candy Crush, and premium streaming. With CPCs averaging 20-30% lower than that of competitors, Microsoft Advertising is a powerful way to diversify ad spend to reach this emerging demographic. Read on to discover what Gen-Z spends their money on, how they shop, and what to do to capture their attention.
Why Gen-Z matters now more than ever
Gen-Z is an incredibly valuable audience that advertisers from all verticals and industries need to get their brands in front of. Experts predict that Gen-Z will have the greatest lifetime value, with projections estimating that they will spend $12 trillion annually by 2030.
Gen-Z shoppers consistently outperform the average consumer in spending. During the 2024-2025 holiday season, they spent 20% more per order than the average marketplace order, with an average order value of $191, and they continue to lead participation in major shopping moments like Black Friday and Cyber Monday.
What is Gen-Z buying?
There are a few clear trends in Gen-Z spending habits that marketers should be aware of. First, their spending is shifting toward a few key categories. Specifically, their spending on food and groceries is 17% higher than the average order value in the marketplace. Beauty and personal care spending is 15% higher and, computers and electronics spending is 14% higher than the average order value. As a generation, they prioritize self-care and will, therefore, spend more on personal care products.
However, they’re also cutting back in some areas. For example, their spending on news, media and publications is 14% lower than the average order value in the marketplace. Travel and tourism is down 18%, and dining and nightlife is down a whopping 50%.
When and where does Gen-Z shop?
Gen-Z’s engagement patterns differ significantly from older demographics. They are most active during the workweek, with mid‑week conversions peaking, and they show heightened engagement late in the evening and late at night. This means that if your campaigns are targeting Gen-Z specifically, be sure to prioritize these timeframes.
Gen-Z also spend more time on apps overall, making mobile‑optimized experiences critical. Be sure that all of your assets are mobile-friendly and look good across devices. In terms of different campaign types, search ads drive strong traffic, but audience‑targeted ads deliver deeper engagement and longer time‑on‑page among Gen-Z users, reinforcing the importance of a balanced media mix.
How Gen-Z discovers and converts
Gen-Z’s shopping journey is shorter and more brand dependent than older generations. Though the median time from first ad exposure to conversion has grown overall across the marketplace – from 46.9 in 2023 to 51.4 days in 2024 – Gen-Z generally convert in fewer days than their 35 to 65+ counterparts.
Gen-Z more often begins their journey with nonbrand queries, but they are the most likely age group to switch and convert on brand terms. They also require fewer searches than older users, at just 39 searches per journey, though they engage more deeply with content along the way. This makes impression remarketing, brand term coverage, and audience targeting essential for capturing conversions at the right moment.
How is Gen-Z using AI?
This generation is more likely to be using Copilot than any other age group by 17%. In addition, Copilot users overall are more likely to be higher earners, as they are 26% more likely to earn over $115k than non-users, so targeting Copilot queries is a solid marketing strategy for any campaign, but especially those aimed at Gen-Z.
One of the most compelling trends among younger consumers is the shift toward conversational search and AI assisted shopping. Copilot users are 17% more likely to purchase directly within conversational search compared to users of other AI tools.
This obviously suggests that discovery through LLMs must be a core part of overall Gen-Z marketing strategy. PMAX campaigns are most effective for placing relevant ads on Copilot, so consider this campaign type when targeting this age group.
The Xbox opportunity
If there’s one part of the Microsoft ecosystem where Gen-Z shows unmistakable dominance, it’s Xbox. Across every major device category, from PC to iOS and Android, Xbox consistently attracts one of the highest concentrations of Gen-Z users, outperforming nearly all other Microsoft surfaces. On mobile, Xbox captures an impressive 40% of Gen Z users, and on PC, where competition is much fiercer, it still draws 28% of this demographic.
What makes Xbox so valuable for marketers is the blend of entertainment, community, and commerce that defines the platform. Xbox serves several functions for its users, so whether Gen-Z is streaming, chatting, or playing, they are deeply engaged and highly receptive to immersive brand experiences. But your brand doesn’t need a full immersive campaign to get traction through Xbox. Gen-Z spends more time on apps than any other generation, and gaming remains one of their most consistent digital habits, so building awareness on this channel is key.
When paired with Microsoft Advertising’s full offering, marketers can reach Gen-Z on Xbox before continuing that conversation across Bing, Edge, Windows, and even Copilot, creating a full‑funnel journey that guides them from play to purchase.
Conclusion
Gen-Z represents one of the most influential and high-value audiences for advertisers today. Their unique shopping behaviours and their deep engagement across Microsoft’s ecosystem, particularly thorough AI and gaming, make them a very valuable audience to brands. But those brands need to play by Gen-Z’s rules, if they want to capture their attention.
Gen‑Z’s preference for mobile experiences, conversational AI, and brand-driven conversions underscores the need for a strategic, data-informed approach to advertising. Microsoft Advertising provides a cost-effective and powerful way to reach this audience, with CPCs significantly lower than competitors and access to premium surfaces where Gen‑Z is most active. For digital marketing agencies looking to future-proof their campaigns and maximize ROI, now is the time to act.
Ready to capture Gen‑Z’s attention and drive measurable results? Contact Diginius today to get started with Microsoft Advertising and unlock the full potential of this emerging generation. If you’re looking to diversify your advertising even more explore how TikTok Search Campaigns are the new Google for Gen Z.
