User:Rachel Clemens/Demographic targeting

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Demographic targeting

Is a type of behavioral advertising in which businesses and brands can target their online marketing to customers based on their demographic information. This is done by combining data from sources such as users' browser history and previous searches with data that users have provided online, such as age, gender, profession, income, and so on, to create deep, fully built profiles for them. Demographic targeting looks to segment based on shared characteristics and then targeting them with a campaign tailored to their needs. When a product has customers with precisely defined personal characteristics, demographic targeting works to it's full nature.

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Online retailers

Communicators are able to present targeted advertisements based on demography using both their own compiled data as well as through the use of different databases. With the increase in online retailers, demographic targeted advertisements have become more popular in the recent years. Online Retailers will often require customers for information based off their demographic such as location, age and gender. This information can be gathered through reviews and location based services. This information is then used to tailor the individual's shopping experience and determine the target groups.

Ethnicity/nationality[edit]

While the disclosure of location is necessary on websites for deliveries and adjusting currency, advertisers can also use this information to alter the shopping experience based on demographic factors such as ethnicity, culture and, international trends. Studies have shown that there is a difference between websites layout and consumer responses. This is as different cultures place value on different aspects of culture, some lean more individualistic and some more collective. Online retailers are able to present advertisements displaying what is expected to be more popular amongst some nationalities and cultures than others. For example, Amazon.co.jp (Amazon in Japan) will advertise the sale of Japanese produced TV shows, films and books on the homepage. Consumers would not expect such advertisements to be presented on the Amazon websites of other nations.

Gender[edit]

Though both males and females can be part of a company's target market for a given product, it is possible that one gender's share of the target market will outnumber the other. Markets can be segregated by enterprises in order to meet the demands of both genders. Gender has emerged as one of the most important demographics to consider. Gender is a common variable in marketing and advertising strategy development, with electronic commerce research revealing that gender is a major feature and predictor of buy intent.

Additional market segmentation factors

See also: Market segmentation

Demographic targeting is not the only way of segmenting a market to communicate with consumers. There is also geographic, psychographic and behavioral segmentation. These different ways of targeting the market work in conjunction with demographic targeting in order for advertisers to find their ideal target market and communicate with them.

Age:

As age is a continuous spectrum, age is an important factor in demographic targeting. Almost every marketing campaign caters to a specific age group.

This variable can be considered in terms of distinct age groups or life phases, such as babies, children, adolescents, adults, middle-aged people, and seniors. Many well-known fashion designers, for example, create separate collections for different age groups. They target various clothing lines at specific age groups, such as a trendy fashion line for women in their twenties.

Race:

With the rise of international trade and advertising, there has been an increase in segmentation based on ethnicity, race, nationality, and religion. Individual cultures exist inside these communities, each with its own set of competing interests, preferences, attitudes, and beliefs. This could have an impact on their marketing responses as well as their purchasing patterns.

Geographic segmentation

Geographic segmentation divides the market into different geographic locations as consumers in different geographic locations may have different preferences. Different geographic locations have different environments and climates which does affect the market for each location level.

Psychographic segmentation

Main article: Psychographic segmentation

Psychographic segmentation uses a consumers psychological attributes to divide the market based on the consumer's social class, personality characteristics and lifestyle. Psychographic segmentation looks at characteristics such as one’s values or personality. Psychographic segmentation also views an individual’s lifestyle, whose analysis can include viewing one’s cultural affiliation, value system, social status, and their familial background. A consumer's lifestyle reflects their daily activities, interests, opinions, and is significantly related to the demographic characteristics. Past experiences can also cause consumers to react more positivity or more negatively to communications from an advertiser.

Research has found that the predictive power of viewing psychographic variables and demographic is quite low, though they can still be used towards predicting purchasing behaviours. However, psychographic or demographic variables can still be used to predict particular groups of people that more likely to make a purchasing decision. For example, parental restriction was overall more easily predicted through the views of demographic variables. Predicting specific parental restrictions, like TV watching, benefited more from viewing the personality of said parents. Personality factors are more predictive for generalized or aggregated behaviour, and has shown to help the predictability of consumer behaviour involving watching TV and whether one plays lottery or not.

Behavioural segmentation

Behavioural segmentation divides consumers into different groups depending on their personal knowledge on a product, their attitude towards it, and their response to the product.

Advertisers typically install tracking software onto consumers’ computers, with the most common being ‘cookies’, text files that are installed to record a user’s browsing history. Through behavioural targeting, advertisers are able to easily target consumers more likely to purchase their product.

Behavioural targeting can cause relaxed competition, which either causes a competitive effect or a propensity effect. The competitive effect occurs when the large amount of targeted advertisements have a low click-through. Because of the low amount of traffic, both the advertisement spaces’ costs and revenues decrease. The propensity effect is when there is a high click-through of targeted advertisements, both increasing the value of the ad space, and the revenue from it.

The sections that behavioural segmentation focuses on are purchase occasions, benefits sought, user status, usage rate, loyalty status, buyer readiness stage, attitude towards the product and online behaviour. This type of segmentation is used to target consumers who are more inclined to hear and accept the communications from the advertiser and be interested in the product being offered. Behavioral segmentation is important because it examines how the consumer's past buying experiences will affect their future purchases. This means that advertisers should consider their past feedback and responses from consumers when planning any new means of communication.