The Thrill of the Hunt: Beyond Demographic Targeting

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We see it all too often: a client wants to target Millennials in the market for a new car. So they want a campaign targeting people ages 25-40, in market for a new auto, who live in a handful of zip codes. And they want to serve them 50,000 impressions over a month.

What’s wrong with this approach? Although some of the target audience can be found using demographic data, this strategy often yields a small audience size.

In the case above, the target audience identified using the provided demographics resulted in just 21,000 monthly impressions, far short of the 50,000 needed.

“How can this be?” the client frequently asks. We know that they there are a lot of people in that age range who live in those zip codes. And it’s hard to believe that a larger percentage of them aren’t in the market for a new car, they maintain.

To understand why relying on demographic data limits your audience, it would first be helpful to understand the difference between demographic and psychographic data. And then to know how those characteristics are identified online

What is the Difference Between Demographics and Psychographics?

Demographics are the facts about a particular group of people such as age, gender, household income, location, ethnicity, and family size. They describe who your audience is. Psychographics are the data that describe what your audience does and why they do it. How they think, how they behave, where they spend their time, and the habits they share are all psychographic attributes that can define a certain audience.

How much can you increase your target audience by using psychographics?

Let’s go back to the example of Millennials in-market for a new car and look at some real numbers we got in our forecast for the target audience. Remember, we needed 50,000 impressions.

  • Ages 25-40 in 5 zip codes: 21,000 impressions
  • Expanded the range to include 25-45 year olds: the number increased slightly to 22,500 
  • Expanded it to ages 25-50: impressions climbed to an underwhelming 23,000 

And from a demographic standpoint, that’s all we could do. We couldn’t expand the age range any more without deviating from the true target audience.

So… we turned to looking for Millennials using their psychographic behaviors. What did we know about Millennials, their lifestyle, and how they spend their time? We know that they are tech enthusiasts for Apple products. We know they spend time on music sites, and that they download a lot of mobile apps.

Using these psychographics, with the same 5 zip codes, our audience grew exponentially to over 450,000 impressions in that same month. Amazing, right? Why was this number so much higher? It’s because of the way that audience data is collected.

How is Online Data Collected?

The Internet has made it easy to gather all kinds of data. People leave traces of information, or breadcrumbs, about themselves wherever they go. Information such as the sites they have visited, what information they searched for, the social accounts they’ve signed up for, and how long they spent on a particular site is all readily available.

Using this data, audience segments are created, defined by location, marital status, job, shopping habits, travel plans, interests, lifestyle, and a bunch of other factors. These segments are then available to marketers to select audiences for whom their ads will be relevant.

How does psychographic data collection differ from demographic?

Demographic data is generally gathered through means of self-identification. Someone fills out a form on a site or registers for an event, and volunteers their gender, their age, marital status, address, or even their household income. (Any personally identifiable information is always anonymized).

On the other hand, people do not have to disclose anything about themselves in order for their psychographic data to be captured. Shopping behaviors, past purchases, sites where they spend time, products or services they look for, content they consume, are all tracked (again, anonymously).

Of course, people spend more time browsing, researching, and shopping online than they do filling out surveys or questionnaires, so there will always be much more psychographic data than demographic data. 

What does this mean for planning online campaigns?

This doesn’t mean that you shouldn’t use demographic data to find your audience. But it does mean that you should think beyond demographics to increase the scale and the reach of your message, and to get even closer to your true audience.

Demographic information can provide important facts about your customer, but can be limiting. Psychographic information provides insight into what is important to your customer. It also helps you understand what motivates them to buy and how they respond to marketing messages.

By combining demographic and psychographic data, you’ll deepen your understanding of your target audience, enabling you to find them, message them, and resonate with them more effectively. Which is exactly what you want your advertising dollars to do.