Millennials are the next Baby Boomers: a group of people so economically valuable that advertisers drop their pre-existing methods to cater to them. Today, Millennials only account for 25% of the total population but have already surpassed the Baby Boomers in numbers. With an estimated U.S. population of 320 million, that’s a lot of spending money.

Who are the Millennials?

Millennials are the group of people born from 1981 to 1996, dates recently crystallized by the Pew Research Center after years of vagueness that set them anywhere from 1980 to the early 2000s. The generation is also sometimes known as Generation Me, Trophy Kids or the Peter Pan Generation, nicknames that imply negative stereotypes, such as that the demographic is lazy, spoiled, and selfish. A recent survey found that while those adjectives are popularly used among non-Millennials, the typical Millennial would describe himself as tech-savvy, cool, and young (and, admittedly, lazy).

The laziness is easy to understand: Millennials grew up as digital natives and seem to command technology capable of doing anything they don’t feel like getting up to do. The TV remote is too far away? There’s an app for that. Don’t want to deal with a long commute every day? Work remotely half the week. To older generations, it seems like Millennials are doing a whole lot of nothing.

Why Do Millennials Matter?

Millennials are careful with their money. Having come of age in the aftermath of 9/11 and during the Great Recession, Millennials are facing futures with less overall wealth than the previous generations. A number of things have caused this problem. First off, Millennials bought into the American Dream of having post-secondary degrees and, as such, colleges are graduating an increasing numbers of students each year. These new grads however, are faced with debts that average almost $30,000.

Large debts coupled with an unemployment rate hovering around 6% and an underemployment rate of almost 50% for young college grads mean that Millennials are not able to live the same way their parents did. Meager salaries are going towards debt payments, credit cards and, unless they’ve moved back in with mom and dad, to living expenses. There simply isn’t a lot of money left over for non-essentials.

While online shopping is a great convenience that could, perhaps, contribute to the aforementioned lazy Millennial stereotype, brick-and-mortar shops aren’t going away. Remember, this is a generation that has either grown up or become accustomed to the instantaneous world of the internet. For them, waiting 7-9 business days for a product to ship is agony when the shop down the road has the same item ready for immediate use.

Why now?

Why should advertisers pay attention to this poor, low-spending demographic? For starters, Millennials are extremely loyal to the right companies. While Sears (SHLD) and Chevrolet (GM) may not be getting Millennial dollars, companies with an efficient social media presence and those that customize the shopping experience find that young adults will return.

In addition, companies are finding that traditional advertisements are becoming less effective as a means to entice Millennial shoppers. Millennials choose to spend their scarce cash on products that they know will be worth their money: they research online, test the products in stores, and then seek out honest reviews by their peers before making a purchase.

By capturing the Millennials now via cheap techniques, companies will find their advertising dollars stretch further as this demographic gets richer.

The Bottom Line

These digital natives are a relatively poor but growing group of consumers. This demographic is underemployed and heavily indebted but, although guarded with their money, Millennials will spend when they think it counts: on services, heavily researched quality goods, and purchases that their peer group has made. The group is loyal to companies that treat them like people, not numbers, and that interact with them (and solve problems) on their favorite social media sites.