Monthly Archives: March 2012

What’s Your Method?

I frequently use segmentation approaches to help my clients make better decisions about where to invest their media dollars. I developed a knack for this about 20 years ago when we replicated an attitudinally driven segmentation that a client had conducted and found that we could align factors from our database with theirs and recreate, with good confidence, the segments they uncovered. What resulted was a clearer picture of who our prospective customer was with a direct linkage to their media habits. Media planning and buying has never been the same for me.

You see, we’re brought up in this business using demographics as target audiences. As soon as a client briefs you on a project you run off and look at generic media usage of a demographic grouping. But ever since this experience I’ve become jaded about using demographic targets exclusively. Don’t get me wrong, I know when it comes to negotiating broadcast buys the currency is a demographic target because that’s what Nielsen measures. But we can plan and select vehicles that align with the mindset/attitudes/behaviors of our segments. And if we select media this way we’re doing a better job for our clients in investing their marketing dollars instead of simply spending them.

Demographics alone are a poor indicator of whether or not someone will buy your product—with rare exception; point-of-entry for denture and the feminine hygiene product categories? You can say that most people who buy life insurance are over 35, but do they wake up on their 35th birthday and say “I must buy life insurance today”? Of course not. There’s another trigger. Maybe someone their age passed on and left a family without financial independence. Maybe they had a new child or a child enter a new lifestage. The fact that these people are over 35 has less to do with the decision to buy life insurance than the emotional factor. Their demography is happenstance. Planning and buying media on their demographics alone will lead to poor decision making—it’s a blunt instrument.

There are multiple methods and statistical techniques you can use to create a segmentation. Many organizations offer ‘off-the-shelf’ values based segmentations that predefine groups based on prevailing personal values and characteristics. VALS and PRIZM are great examples of this type of segmentation. PRIZM uses socioeconomic factors more than psychographic ones so it doesn’t fall into the same space as VALS. However these approaches fall short in some areas. That’s why I prefer to use a behavioral approach that is custom built based on the way people interact within a specific category. I don’t think people are as one-dimensional as the values based segments suggest and they act differently in different categories because of that. The chart below shows you the main difference in method here:

Both are markedly better approaches to developing media plans but will yield different outcomes. For example, using a behaviorally based approach may result in a segment of the population who are non-users of your category. It doesn’t matter what these people’s values are if they will not buy your product. The behavioral approach also gives you an opportunity to identify size of business value (dollars and cents) of different groups.

What’s your method?

What’s Your Return Policy?

No, not a 14 day purchase return on that “As Seen On TV Hat”, but return path data, RPD for short. RPD is the data going back to the TV provider about your TV set’s habits. This data can back from your satellite, optical fiber, or cable line. Your TV provider–assuming you have digital and approximately 50 million HH’s do–is tracking your every viewing move. They know second by second what is being ‘displayed’ on the sets in your household and whether you’re switching when commercials appear. They’re also using your viewing habits to build look-alike models on similar households to send you/them specific tune-in messages.

I’m sure you’ve seen banners/buttons asking you to press “A” for more information or to request a sample. Your TV monitor and remote now become an interactive mechanism just like your PC/mobile device or tablet. Ordering up a pizza (extra anchovies for me, please) when the Papa John’s commercial airs is easy and has just truncated the purchase funnel. That pizza can be at your door without you calling, getting online or walking/driving to the restaurant. OK, so maybe ordering pizza is not the killer app for RPD, but as someone who manages a lot of pharma and financial services marketing I can see value in trying to capture names to remarket to, names and email addresses to add to my database and online communication streams.

With the new technology and data capture there is so much more we can do with TV to make it more than just a medium to push messages out to demographic groups. Some smart CPG companies are marrying the hundred of thousands of HHs available with retailer loyalty card data to better understand the cadence of purchasing behaviors and whether ads are driving new buyers or just reminding those with an empty box to buy again. Why would anyone only ever use Nielsen ratings alone anymore? Welcome to the 21st Century when aggregating audiences of low common denominator demographic populations isn’t enough—if it ever really was. We can finally shift from an audience metric and the awareness stage of the old purchase funnel to tracking business metrics, transactions and engagements.

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