Why marketing demos must die

Advanced targeting techniques are making demographics insufficient

Demographics were a useful shortcut

If you wanted to advertise a fancy new watch brand before the internet, how would you do it? Your watch is nice, but you know it’s not for everyone.

First, you’d need to figure out some characteristics of an average buyer. Combining data from a few focus groups and some gut intuition, you would settle on a target customer. Let’s say your prototypical watch buyer is male and is 20–44 years old.

If your selling in the U.S., just these two broad demographic characterizations narrow the population quite a bit. According to the 2012 census, 49% of the population is male and 34% of males are between 20–44 years old. We’ve narrowed our pool of potential buyers from everyone, to just 16% of the U.S. population. That’s powerful.

Now that we’ve defined our buyers, we need to get the word out about our watch. Since we’re launching a watch before the internet, we can’t target people directly. Our paid media channels (TV, newspapers, magazines, radio, etc.) are all mass in nature. If we paid for an ad placement in a channel at random, we’d be wasting 84% of our media spend reaching consumers unlikely to be moved by our message.

Luckily, our media partners have surveyed their audiences and can give us a breakdown of the people we’re likely to reach across various programs. We can improve our odds by advertising in media whose audience match our demographics. It’s still a guess, but our chances of reaching potential buyers of our watch in Golf Digest are likely higher than average. Before the internet, improving our odds by playing with media mix was the best advertisers could do.

Two reasons why advertisers must do better than demos in digital

1. Advertisers can know more about their customers than ever. Gone are the days of extrapolating data from a few focus groups. The average customer is dead. Marketers can build multifaceted profiles of their entire customer base. Everything from where they live, what they care about, where they hang out and what they’re saying. They can measure every interaction a customer has with their brand — on paid media, digital properties, in stores or interacting with partners. Building one message for an average consumer is inadequate. Brands have lots of customers they need to speak to. Customer segments are shrinking.
2. The boundaries of targetablity are expanding. The fastest growing media channels allow marketers to transcend demographics. Search allows marketers to target purchase intent. Retargeting and Custom Audiences allows marketers to reach people they know. Facebook can combine a wealth of demographic, interest and activity signals to create lookalike segments based on millions of data points. The ability to reach users in even the smallest segments is increasing.

The post-demo future

In the digital age, we can define customers segments right down to the individual. And we can target segments of users on virtually any criteria. The best marketers will stop trying to apply old heuristics to modern marketing problems. They will retire “demos” as a marketing criteria. This change wont come without its challenges. While people struggle to market to segments of individuals, modern tools will make this the new standard in marketing.