This is part two in a multi-part series on audience targeting – read Part 1 and subscribe to Run of Network’s RSS feed so you don’t miss the next parts!
Demographics Explain Who, but Psychographics Explain Why
In the first piece in this series, we looked at demographic information, and how marketers use information like age, gender, and income to tailor their advertising strategies for greater effect. But even the most sophisticated demographic target is still broad, so how do marketers take the next step and start to zero in on the right customers to drive sales? The answer is usually found in the complex world of psychographics, where advertising and psychology merge to produce the granular, qualitative information to understand what really makes a customer buy.
What are Psychographics?
At their core, demographics describe who people are, and psychographics describe what they care about. From a marketing perspective however, psychographics are usually used to explain why people buy a product, and the attitudes, opinions, and personality traits that drive them toward a product. Psychographics are inherently more abstract than demographics because they are multi-dimensional by nature, and cover subtle elements of what makes a person tick.
Today, thanks to an explosion in communications technology, consumers are more fragmented than ever before, so understanding and marketing based on psychographic qualities couldn’t be more important. From a consumer point of view, the internet has made it easier than ever to discover subcultures, connect with distinctive communities that share the same unique interests, and curate their world. You can see marketers respond to this reality by adopting wider identities, and narrower marketing strategies.
As an example, consider athletic shoes – from a demographic point of view, a broad range of people are in the market for the product, from young to old, both men and women, for all kinds of reasons. From a psychographic perspective though, some customers might care most about performance, while others concern themselves with the fashion appeal of the product, while still others just want a particular brand as a status symbol. For a shoe company to maximize sales, it needs to understand these trends to design the right products, and talk about them the right way.
You need only look at major shoe retailers to see the model in action – endorsements from celebrity athletes for the performance crowd, options to customize the colors and materials for the fashion crowd, and rare, limited editions for the status conscious crowd. From an advertising perspective, the brand talks to one crowd very different than another, so the ads on ESPN are very different than on SneakerNews.com. There’s no doubt that shoe companies fully understand the demographic qualities of each customer base, but in many ways, the psychographic elements are what really drive the products, positioning, and sales.
Targeting Media by Psychographics
Unfortunately for advertisers, psychographics aren’t nearly as easy to deploy in targeting strategies as demographics. For one, psychographics aren’t easy to standardize on a taxonomy – brands won’t necessarily agree what qualifies someone as a ‘sneakerhead’ the way they will ‘Age 18 – 24’. It’s also far more difficult to collect the information from people in the first place – while demographic elements are widely available from a variety of public and private sources where someone might fill out a form or register, but the same can’t be said for psychographic data. In most cases, there isn’t a pure data-driven signal, but rather a combination of data and context that works as the best proxy.
Going back to our example of sneakerheads, aside from a passion for collecting rare sneakers, marketers might learn that these customers also have a strong affinity for hip hop music, are more likely to watch professional basketball more than any other sport, and buy a new pair of shoes once a month. Having gathered this information, marketers can now combine various behavioral elements in context to reach their psychographic target. Instead of just advertising on whatever sites attract their demographic, or focus exclusively on sneakerhead content, the marketers might start to look at sites that focus on hip hop music, or professional basketball content sites. They might target people who they’ve tracked on both basketball and hip hop music sites with ads, perhaps email every user who last purchased three weeks ago with a special offer to capture their next purchase, or start to integrate those cultural topics and elements into their social media strategies.
Over time, marketers can start to build a truly sophisticated profile and targeting strategy as they get more and more efficient at driving sales that might understand what specific basketball teams, what specific hip hop artists draw the most interest from the customer base, and even start to segment the different trends between heavy buyers versus light buyers, and what makes someone move from the latter group to the former. While far more complex in nature to first understand and then execute in the marketplace, adding psychographic elements to a targeting strategy offers a greater payoff when deployed effectively.