Demographic targeting by age has been a mainstay of TV media buyers for decades. But in the era of big data, advertisers are taking a second look at their ad-buying parameters. This is especially true for large CPG (consumer packaged goods) marketers.
A new study by Catalina Marketing, titled Deconstructing Demographics, should cause CPG marketers to rethink the way they buy TV ads. Catalina looked at several major CPG food brands and the related $415 million spent on TV ads. The idea behind the current advertising practice is that all consumers are targeted equally, based on how large their group is as a part of the entire population. The strategy misses the mark because consumers who spend a lot more on specific product categories are receiving, on average, only 3% more ad exposure than other buyers. Looked at another way, the consumers who account for 98% of a brand’s sales are receiving only 30% of ad exposures.
While CPG food producers may believe they need to target broadly women between the ages of 25 and 54, researchers point out that this group only accounts for 47% of sales. Sales that fall outside the target female audience include frozen dinners (60%), cereal (58%), mayonnaise (60%) and packaged cheese (53%). As a result of current buying practices, TV ads are not connecting with key purchasers of several CPG categories.
In the Catalina Marketing study, consumers ranged from non-category buyers to heavy brand buyers to pivotal consumers. Data analysis allowed researchers to categorize consumers based on what they bought and their level of brand loyalty. In this way, they identified variations and determined that up to 30% of brand advertising targets consumers who do not buy a specific category. Overall, only 15% of the media exposure was directed to consumers who generated 80% of brand sales.
It’s certainly true that TV gives media buyers a broad reach. Catalina Marketing analysts point out that media buyers can significantly improve their ROI by identifying, by category, exactly who is buying their products and target those consumers with promotions. In a nutshell, they need to move past targeting simply by age and gender.[Source: Deconstructing Demographics. Catalina Marketing Corporation. 12 Jul. 2012. Web. 19 Jul. 2012]