Category Archives: demographics

The long road to personalization

Our friends Bill Green and Alan Whitley at digital shop BFG sent us a Mashable article declaring demographics are dead. The column’s author, Jamie Beckland, raises excellent points that new forms of personal data are more effective for marketing … but stretches too far.

We jotted this email back.

Conceptually I agree that marketers continue to improve targeting, and that psychographics are better than demographics. But, as with any provocative article, this writer takes the case too far, because the theory can’t be implemented usually and demographics, while a broad categorization, are still an effective form of targeting. If you are a mom in your 40s, yes, I’ll run a morning news spot promoting a local hospital, because your demo makes sense, and no amount of psychographic profiling in the world can predict that yikes, you just found a lump in your breast.

Yes, there is waste in such approaches, but advertising is a game of what you catch, not what you spill.

I spent an early part of my career working with Don Peppers, the father of 1to1 marketing, who wrote a book in 1993 titled “The One to One Future” (and spawned the CRM craze of the 1990s which eventually became a term for software after marketers had difficulty implementing it). Don’s idea was that eventually marketing targeting would get so perfect, it would become 1to1 personalized relationships, a feedback loop with every customer. Brilliant idea, but very difficult to implement. When I read people like Joseph Jaffe now claim “the 30 second spot is dead,” I laugh a little, because it’s the same vision 20 years later. It is coming, but slowly, and we’re not there yet.

One of Don’s great thoughts was that “1to1 marketing” – or hypertargeting – works best in certain industries which have
a. Variance in what customers need or
b. Variance in the customer lifetime value to the business

This is why personalization has been implemented best by and Netflix (where Bill Green and I likely have very different “needs” in books and movies), and why differential treatment strategies are implemented by airlines and hotels (where a business frequent flier has 100x the value of a typical vacation traveler). In such industries, investment in customer data systems and corresponding hyper media targeting make sense.

But in other industries with mass appeal, demographic targeting is fine. Insurance is a classic example – State Farm and Geico spend millions on billboards, which is smart, because their products appeal to almost everyone and it is almost impossible to tell when any individual is going into play after a bad experience with their old insurance company.

Psychographics cannot predict customer modality, which is why Netflix personalization is still problematic. I don’t know what movie I want to watch next week, and I’m me.

In terms of the quote that a 1% response rate is bad so traditional advertising doesn’t work, that is ridiculous. As I said, advertising is a game of what you catch, not what you spill. If the math works out on a tiny response rate, at an acceptable cost per acquisition, marketers will throw money at the channel every day of the week. There are 3.5 billion women in the world and I married one – was my personal marketing effort for love and sex a bad campaign? No.

Finally, one major error in this type of prediction is it doesn’t look at how humans actually use media. Internet use is still less than 1 hour a day for most U.S. consumers. The typical U.S. consumer watches 5 hours and 9 minutes of television a day, which works out to exposure to 166 :30 second TV spots each day. People spend hours in their cars, looking at billboards. There are more marketers who want to push a message out than consumers who want to receive them; people still spend huge amounts of time letting mass media wash over them; and personalization just can’t work at that scale (who would possibly respond to half of those 166 TV offers even if they were exactly what you want?). It will be decades before media channels figure out how to implement personalization across such broad media touchpoints.

Personalization is coming and we’ll continue to improve our tools, but as with any idea, the theory is often better than the execution. Pinpoint targeting is a dream, but broad media hammer strokes still work, too. Our recommendation is to try to combine both tools, but certainly not to disregard either one.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Tom Cruise and lizards: Hollywood’s double demos

Yak about community all you want, most marketers still target people with one-way communications, and the bull’s-eye in that target is called a customer demo. Demographics are vital, you see, because humans have vastly different interests … yet commonalities among age, income, home location, and psychographic affinities abound. Look across the street at the neighbor and you’ll find he or she probably dresses similarly to you, has similar appliances in the house, about the same size TV, may go out to your favorite restaurant. By identifying target descriptions, marketers are more likely to achieve higher response.

Yet … targets can overlap, and some advertisers rarely consider this. Is it possible to hit a double demo?

Hollywood is hip to this. We’ve seen several examples recently of sharp marketers reaching out to more than one audience. The film “Knight and Day,” with Tom Cruise and Cameron Diaz, offers spies, romance, and cartoon action — something for mom, dad and the kids. The rush of Pixar animated films, with double entendres for grownups interspersed with digital graphics for tots, hits more than one button. “Transformers,” “G.I. Joe,” and of course the multi-billion-dollar-hit “Avatar” — the first film to top $2 billion in revenue — all appealed across demographic clusters. The film industry knows the only way to make it big is to hit more than one type of consumer. You could suspect the rehabilitation of Tom Cruise, post Oprah-couch-jumping Scientology-interviewing (we’re not judging, people, all religions deserve respect but oh people tuned out) required a severe multi-demo-pronged approach. And hey, we saw the movie with a 10-year-old, and yes, it rocked.

The Geico / Martin example

It’s not easy to hit more than one target with a single arrow, of course. Such marksmanship requires a product with multifaceted appeal, marketing that offers nuances to reach more than one demo type, and media buys that touch different genders, ages, and mindfulness of consumers in different channels. Orchestrating all of this may require Steve Jobsian manic control.

A few weeks ago we were privileged to speak at the DMA Echo Award judges panel, thanks to an invite from the uberpodcaster Bob Knorpp, who hates Tom Cruise, and met up with one of the principals of The Martin Agency, the fast-track group responsible for the brilliant cavemen and eyeball-dollars for Geico. After we asked the obvious question — “Does that lizard thing have a British or Aussie accent?” — we then dug in on the media plan. Geico, you see, is running several creative campaigns at once. “Of course we try to reach more than one demographic,” the Martin bloke told us, “because insurance has broad appeal, and we have to reach different consumers at different stages in their lives.” (We paraphrase wildly, but chill, this is just a damn blog.) So Geico launches several major creative prongs, tests individual creative elements in small markets, measures lift in response and awareness, and rolls forward like a giant board game. Geico, and its Martin gurus, have learned it is possible to target more than one type of human.

So here’s a mind game: Next meeting you’re in where everyone is drilling in on the one, single, perfect demographic target, ask: “Hey, what if we go for two or three types of people at once?”

Footnote: The man from Martin wouldn’t divulge the real lizard accent. But that’s OK, Wikipedia tells us there are an estimated 2,000 different species of geckos worldwide. Maybe, those clever lads at Martin are targeting more than one accent at once.

The manification of Toyota

It’s a shame Toyota is getting drawn and quartered over its stuck-pedals-or-sliding-brakes complaints because we’ve been admiring its new campaign for the revised Sienna minivan. Minivans, as you know, are the Great Compromise of automobile purchases, the harbinger of mid-life crises, the acknowledgement that a man has moved beyond the age of hot dating to P-whipped marriage to schlepping children with sippy cups to the local park and you better stop fighting in the back seat or no TV for a week! dialogue. You don’t have to put on the red dress tonight, Roxanne, because you won’t be caught dead with a guy in an egg-shaped hunk of sheet metal.

Toyota’s redrawn 2010 Sienna steps away from prior feminine-hygiene-packaging allusions. Sure, it is nowhere near as manly as Ford’s Flex — which hides its vanness with a Mini-on-steroids facade and a grill fresh off a Mach 3 razorblade — but from ads to brochures, Toyota is crowing this is a minivan that dads can drive. The Sienna’s top designer allegedly loves sports cars; the SE model option includes a dropped suspension and aggressive tuning; the dashboard has a Nike-inspired swoosh inlay either in wood or some fake form of carbon fiber (the swoop is actually a psychological device to give both front-seat passengers the illusion that they own 60% of the forward visual space). And banner ads online, which retarget you aggressively if you visit, proclaim “Daddy Likes.”

It’s a clever combination of product design and ad communications to appeal to two demos at the same time, men and women — and in a recession, both males and females in a household have to agree before shelling out $30k for a family bus. Toyota is obviously pushing the van because it is one of the few models not involved in its current massive recalls. If Toyota can put the brakes on consumers’ safety concerns, sales may suddenly accelerate.

Why we’ll miss Dos Equis’ dos demos

In summer 2007 Euro RSCG/New York launched the most original beer spots we’ve seen in a decade: “The Most Interesting Man in the World” for Dos Equis. Now the spots are likely nearing the end of their flight, which would be sad, since they brilliantly resonate among two very different demos.

The protagonist is a Hemingwayesque man of all men, shown in flashbacks as a thirtysomething with black beard benchpressing women in short skirts or waking up a party simply by walking into it. The spots flash-forward to present, with the older, wiser, silvered father figure saying he doesn’t always drink beer, “but when I do, I prefer Dos Equis.”

We admit, the commercials stir something in us, which shows how easy it is for any guy to slip into the target demos. Thirty- and forty-something men aspiring for something more exotic or senior men in retirement longing for a bit of adventure can all see something uplifting here. Sure, it’s just a beer. But who doesn’t want to be questioned by the police just because they find you interesting?

Based on tooth decay trends, it’s gonna be a close election

If you’re into data, and we know you are, StateMaster offers a fun, free dive into U.S. consumer behavior. The site compiles data from the U.S. Census, the FBI, the National Center for Educational Statistics and other sources for MRI-type charts and graphs on demographics, housing, energy use, entertainment, crime and transportation.

There are big holes — not much in tying consumer demos to product usage and media — but it’s always cool to play with correlations between variables. Such as dental health and blue vs. red states. We’re just saying.

Ride, baby boomers, ride

Is it time for your ad campaign to stop ignoring old people?

Patrick Baldwin, VP at Retirement Living TV (who may have a vested interest in promoting marketing to seniors) shares some interesting facts in Mediaweek. While the 18-49 demo has long been the focus of marketers, the average age for U.S. head of household is now 49.5 — and the 50+ population will grow by 22.5 million over the next 10 years. Baldwin’s most intriguing angle is that an AARP survey of Americans over age 45 found they are no more brand loyal than younger demos.

We see more ads with Dennis Hopper in the future.

4 marketing lessons from death on stage

Live theater is dying. The sweet blue-haired ladies who once filled theater seats are moving on to the big stage in the sky, and as younger generations fill basements with big-screen TVs, the arts community is reeling. Pay attention, because shifts in demos and consumption are rocking industries from automotive to zoo attendance, and you too will need to respond.

Eric Smith, marketing director at Westport Country Playhouse, has launched a new blog that pinpoints the challenges of the entertainment industry as audiences shift and change.

“For many theatres the answer seems to fall on ‘we need to bring in younger audiences’, writes Eric. “… but here is the thing: younger audiences are merely a demographic that we have identified who are currently not attending theatre in large numbers. It would be like saying, ‘there are a billion people in China who don’t come to our theatre, how do we get them here?’ “

Eric suggests a deeper look at the marketing process is required, beyond just shifting the demo target. To build upon his post,

1. Reframe the goal.
First, your business target has to reflect the new reality. Has the recession or oil prices changed your customers’ behavior? Does your basic business goal reflect what new level of success is required? How would GM do next year if it maintained a goal to sell X number of trucks as the metric of success?

Theater marketers can do this by refocusing from subscription sales, the past ideal goal, to “multi-ticket buyers” — a nod that consumer behavior has changed, and that people now need more flexibility.

2. Map common pathways to sales.
This means analysis: reviewing customer account histories, looking for patterns among the best customers, and then defining the touchpoints and needs that can increase such behavior among future prospects.

3. Target diversity, not demos. It’s not enough to shift advertising to working female professionals age 35-44. Advertising media plans can target multiple audiences, say, professionals who commute, stay-at-home moms, long-time loyalists, and new movers into the market.

4. Test, refine, redeploy. Advertising plans almost always have unexpected results. Tracking performance by media channel is critical (say, the cost per inquiry from Newspaper A vs. Insert B). As lower-cost lead generators emerge, shifting funds can yield 30% to 40% more customers from the same advertising budget.

Footnote: Eric is a client of Mediassociates. We usually avoid promoting our clients on this news blog, but the thought process he presents is worth watching.

Will you still need me, will you still read me, when I’m 64?

A new PWC report shows a growing generational divide in how consumers use media. Digital and mobile distribution of “Entertainment and Media,” or E&M, is expected to double from 5% of all communications in 2007 to 11% in 2012. However, this growth is driven mainly by young people. Consumers over age 50 are expected to sustain traditional media formats such as TV and radio.

A few other intriguing findings:

– Young people under age 25 account for 31% of total global population.
– However, the “youth share” is highest in many emerging markets. The under 25 set accounts for 43% of the population in Brazil and 50% in India.
– Thus digital and mobile formats may accelerate most quickly in emerging markets.
– In the U.S., the population appears headed for a split: Aging boomers who prefer traditional media are growing at 13%, but rapid growth in the under 25 crowd, especially among Hispanics and other non-Caucasians, will accelerate digital growth.

All of which creates a little cognitive dissonance in media planning. The over 50 crowd has the highest net worth and incomes. The under 25 crowd makes the most impulse purchases. Digital gets all the news, but traditional media is the path to the most money.

Your future media plan will need to address this generational divide.

Photo: Lara Jade

Soda pop studies, or how to keep research on track

We’re knee-deep in research this week and constantly have to warn ourselves about chasing our own tail.

Let us explain. In research, as in particle physics, the act of observing a phenomenon can actually skew the results. Any data set is collected, and the process of collecting can pull you in the wrong direction. Say you launch a new campaign to sell a hydrogen fuel cell home energy system, and it costs $5,000, but you offer a very low subsidized price of $1,999 with aggressive financing … hoping to make money on fuel supplies in the future. Consumers respond.

1. Does this mean new consumers are your ideal audience, and you can extrapolate their profile to the entire population for long-term growth?
2. Or does it mean your aggressive ad campaign simply attracted a certain type of price-sensitive shopper, perhaps responding to a short-term spike in home heating and A/C costs?

The potential error, above, is the very offer and media plan itself may have attracted the wrong type of consumer, or a consumer group that in no way represents your ideal demographic and geographic targets. Like a dog chasing its tail, measuring the early results of a product launch can lead you in circles.

The solution is to validate early or internal data with outside data sets. What is the broader market doing? Is competitor media spending in line with your early findings? Are there lists of consumers who have purchased similar services that you can overlay on the U.S., to validate the assumptions from your earliest customers?

Information is powerful, but always watch how it is collected and always test it for accuracy … sort of like an industry soda study on little babies. (Tx Make the Logo Bigger)

RushmoreDrive: Now a search engine for blacks

About a year ago IAC human resources chief Johnny Taylor thought to form a web business for African Americans. Like any good planner, he began with research — and was surprised when focus groups showed the No. 1 activity of blacks online was searching for information, followed by job hunting and reading news.

His findings emerged last week in the form of, the first web search engine designed specifically for the black community. The site uses a unique search algorithm to combine top search results with black-specific information. Job listings and news are prominently featured, and the news section includes forums where readers can discuss events.

It’s an intriguing idea — that different demographic groups want different search results. Given the massive fragmentation of media content and niche publishing, it’s actually surprising that no one has thought of this before.