Classic demographics like age and gender – despite being tried and tested for years – appear to be losing their popularity among marketers as the most common form of segmentation. The shift in use of audience insights over more generic targeting options such as demographic information is happening as a result of the wealth of customer data now available.
During this article, I’ll cover the rise of audience data, why brands are ditching demographics, how they’re leveraging audience insights, and the results they’re reaping by doing so.
Demographics is the study of a population based on factors such as age, race, and sex, it also refers to socio-economic information such as employment, education, income, marriage rates, birth and death rates.
The challenge with classic demographics is they use broad characteristics to group people and such assumptions make them superficial.
Segmenting your audience based on their real (and not theoretical) behaviour is a much more precise way of targeting. Traditionally, tracking intent was difficult to do, which is why we’re used to leveraging demographics for lack of a better alternative. However, thanks to technology advancements such as the internet, social media, big data, predictive analytics and artificial intelligence, marketers can now equip themselves with the tools needed to track such behaviours.
When we consider the fact that the average person shares around 9 pieces of content online each day, the digital breadcrumbs left behind are vast.
Savvy brands are looking towards social media to piece the breadcrumbs together and build more reliable profiles of their target market, better predict their next move and optimise the customer journey and targeting capabilities.
2019 saw a number of large companies’ holt solely using demographics in a bid to move from “wasteful” mass marketing to mass one-to-one brand building by targeting people with similar characteristics. That’s not to say demographics are dead or that psychographics will eliminate them, rather, they complement one another to create a more robust picture of consumer types and behaviour intent.
I’ve included some of the leading brands championing audience insights below, as well as the results they’ve seen by doing so.
As part of a drive to modernise its marketing spend, this year P&G announced a shift in priority: moving away from traditional mass marketing methods towards smarter audience segmentation.
CEO, David Taylor, explained how the company is using the +1 billion consumer IDs they’ve amassed globally to build audience segments and serve messages to people who have similar characteristics such as behaviours, mindsets and P&G products. P&G’s data management platform contains anonymous audience data on 90% of the population. In an analytics learning lab, the company combines the audience data with purchase data to generate granular views of consumer habits. The database also enables advanced programmatic media buying that finds people with the highest propensity to buy.
Taylor comments: We are going from generic demographic targeting, like women aged 18 to 35, to more than 350 precise smart audiences, like first-time mums, millennial professionals or first-time washing machine owners… we will get more accomplished at performance marketing to serve people messages that meet their needs.
It has been reported that P&G owned skincare brand, Olay, used smart audiences to reach 65 million high potential users, more than the generic audience of “women ages 25-54,” and spent 10% less with 20% higher sales growth by doing so.
Taylor’s aim is to create campaigns that “clear the highest bar for creative brilliance, sparking conversations, changing behaviour and sometimes defining popular culture.” He believes understanding consumers is the key to making the smart audience approach, stating, “We start with understanding consumers then creating ads that make people think, talk, laugh, cry, smile, share and, of course, buy.”
In a bid to connect more meaningfully with their audience, we also saw Danone outline a plan to park demographics in favour of social data, analytics and technology to more sharply target marketing activities.
Instead of demographics, Chief Strategy and Insights Officer, Elaine Rodrigo, explains how Danone now starts with a data-driven approach to understand people segments, or ‘tribes’ as they refer to them, which are identified and defined by their ‘passion points’, ie behaviours and interests. “These are people with meaningful similarities” explains Rodrigo. “You identify, you create content, you measure. It’s an iterative learning process which feeds back, and then you realise that some worked, and some didn't, so then we know which of the tribes actually means something to your brand and you keep them, keep learning and going deeper.”
Danone’s water brand, Volvic, saw great success from segmenting their audience into 16 different tribes. They used data to identify important micro-moments for each tribe and then created personalised messages that resonated with their intent.
Broadband and telecommunications provider, Telefónica, previously struggled to engage a relevant audience in the Spanish and Latin American market. To overcome this challenge, they built segments of relevant social media users and then divided them by location, level of activity, keywords and how they’re likely to respond to promoted Tweets.
As a result of the strategic insights found from segmenting, they successfully served them with paid personalised messages, helping to optimise the quality of followers, as well as reduce the cost per follower. In fact, they saw an increase of 30,000 new followers, who are more active, followed, and relevant than organically reached ones.
It’s refreshing to see that Fortune 500 brands are acknowledging that the generic, unsophisticated targeting practices of yesteryear are no longer fit for purpose in an age of big data. Interested in learning more about your tribes and the moments that matter to them? Meltwater has the data and insights. FIll out the form below and we'll show you!