Monday, November 12, 2012

Time to Ditch Demographic Profiling

Right now the marketing industry is being weighed down by a tool that has outlived its usefulness: demographic profiles - the idea that you can group people by age or income level and most people in those groups will be pretty similar.

Now, I know I'm not the first person to rail against the age-old use of demographics - a lot of people before me have said that they need to go(usually while promoting the rise of psychographics) - but the thing is, people are still using them!

You hear marketers talk all the time about how their campaign did really well among the 18-24 demographic, or how they're planning on targeting women age 30-49, and every time I hear that I roll my eyes a little.

Why are we still using this outdated tool?  I know why we started.

Once Upon a Time...

Demographic profiles used to be a pretty good way to figure out who your consumers were and how to target them.  When I say "used to be," I mean in the 50s and 60s, when people's roles in society were much stricter.  You could split society into groups, and those groups were pretty homogenized.

A white, middle-class man either went into the military or college(or maybe went straight to the work force), got a job, got married, had kids, and then worked until they retired.  If a woman wasn't the one that the man married and had kids with, she was either a secretary, nurse, or a teacher.  And if you weren't white, you probably went into the service industry.

Society didn't really like people who were different.  If you were different, you probably bought a lot of the same things anyway just to fit in.

But then society started to change.  Women started to get jobs - jobs that weren't teacher, nurse, or secretary.  White collars started to be worn by people who weren't white.  Some people began to put off going to college or starting their career.  People became more tolerant of those who were different.

Demographics persisted because, despite their growing inaccuracy, they were still the most efficient option.  Getting detailed information on a person's buying habits and cross-referencing that with other people's buying habits to form new groups was a daunting task.

Until the internet.

Now - thanks largely to Facebook and Google - marketers have easy access to all kinds of information about their consumers.  So much access, in fact, that an entire industry has risen up around gathering and organizing that data.

Marketers are left with no excuse.  There is no reason to target "males age 18-25" to sell kayaks to when they can target "people who go kayaking."

In this age of big data, old-school demographic profiles have reached a new height of obsolescence.  They are, at best, grossly ineffective.  At worst, they are downright harmful to society.

Useless and Dangerous

Think about it: what is the "average 25-year-old white female" like?  Did she just graduate from college and is focusing on her career, or did she settle down early and start a family?  Does she like to go out dancing, or stay in and watch sitcoms and reality TV?  Or would she rather play Call of Duty, or read Lord of the Rings?

Assuming that any of those activities are "normal" would be insulting to every woman who didn't enjoy them, and assuming they aren't "normal" would be insulting to every woman who did.

That's not to mention the danger of what Seth Godin recently called the "false proxy trap."

Let's say that a research group discovers that a certain subset of middle-class women in their early 30s have focused on getting a good education and having a successful career, but are now taking some time to relax, meet new people, and have fun.  So the research group determines that middle-class women in their early 30s would be a good group to target for a dance class.

An ad agency, using "middle-class women age 30-35" as a false proxy for that subset, decides to place an ad during The Price Is Right, because a lot of women in that demographic watch that show.

Except the women watching The Price Is Right are stay-at-home moms who don't have time to go out dancing.  The entire ad budget is wasted.

Demographic profiling may have been the best tool of its time, but that time has passed.  Now, like any other tool that's past its prime, it is ineffective when it does work, and dangerous when it doesn't.  Marketers have so many shiny new tools at their disposal, it's time to put those to work and leave the old rusted demographics behind.

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