Traditional demographics have been falling out of favor for a few years in the industry offline and online, with CBS Chief Research Officer David Poltrack dramatically announcing last March that the company, in partnership with Nielsen, would no longer employ traditional demographics to analyze its audience, describing the practice as “hazardous” to media and marketers.
This debate isn’t a new one, as marketers and technology vendors have attempted in myriad ways to replace the old system, which looks primarily at factors such as age and gender to create audience segments. Now, as large companies begin to move away from demographics towards more in-depth insights based on “mental models” of the consumer rather than labels such as “connected consumers” or “baby boomers”, technology and the digital agencies are ready for a paradigm shift.
“Traditionally, the challenge with psychographics is that they have not been able to scale to large enough audiences,” said Beckland. That is changing, according to Jamie Beckland, digital and social media strategist at Janrain, a social media tech company. Companies like Amazon look at the mental model of a consumer relative to the customer life cycle, with tools that match buyers at a certain point in the sales funnel with recommended products and deals. Those offers and recommended products are most often based on social profile data and behavioral data that when employed in real-time, connect brands with consumers at the right time, with the right offer, said Beckland.
“Ad targeting will start to be based more on the mental model of an individual consumer in the moment when they are most receptive,” stated Beckland. “Right now, receptivity is relatively easy to predict for products that have a natural fit with a holiday or other rallying point, like ties for Father’s Day. But for most products, the moment of purchase consideration is not informed by an overall cultural moment, but instead by a single person’s decision cycle.” This means that brands need better data and more advanced targeting methods that look at multiple influences on conversion, based on a psychographic profile of the customer while taking into account the consumers present point in the sales cycle.
“The right moment to ask me to buy the latest Glee CD is in the afterglow of watching the show,” said Beckland. “But, with DVRs and Hulu causing time shifted viewing patterns, advertisers must be ready to target individuals on their own schedules.”
Psychographic-based marketing is spendy, but Beckland believes, it can reap greater rewards for advertisers.
“Psychographic targeting makes both campaign planning and tracking more difficult, but the return is worth the effort,” Beckland stated. “Leveraging psychographic data might ad 30 percent to a campaign cost, but results are likely to be 10 times over traditional digital campaign metrics.”
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