The Death of Demos?

A lot of interesting stories are coming out of this year’s Advertising Research Foundation Re:Think conference. One that particularly struck me involves research presented by David Poltrack of CBS, who partnered with Nielsen to produce a study demonstrating that the traditional age and gender demographics that have long served as the fundamental currency in the audience marketplace have literally no relationship to the product purchasing behaviors for which they have long been presumed to serve as an effective proxy.

Poltrack has actually been involved in this line of research questioning the value of younger audiences for a number of years. I conducted a pretty thorough review of his published research in this area in my 2003 book Audience Economics. Of course, given that Poltrack is the Chief Research Officer for perhaps the oldest (in terms of average viewer age) network on television, one is fair to question whether he is a credible source of research undermining the logic of targeting younger audiences.

But certainly, demos are a fairly blunt instrument when it comes to getting at what it is that advertisers presumably really care about — consumers’ product purchasing behaviors. And what is interesting about Poltrack’s latest research is that it uses product purchasing behavior data to illustrate how much more effective and efficient they are as tools for targeting and placing advertisements. The bottom line: advertisements are most effective when they reach “heavy users” of a particular product category. 

This certainly isn’t surprising.  What is perhaps surprising, though, is how unsuccessful efforts to establish commercial measurement systems that link media consumption with product purchasing behaviors have been up to this point in time.  The media landscape is littered with failed “single source” measurement systems, such as the Nielsen-Arbitron partnership Project Apollo, which went belly up in 2008 .  Poltrack’s effort draws from data from the latest incarnation — Nielsen Catalina Solutions.

Of course, there are a lot more product categories to be measured and analyzed than there are demographic categories to be measured and analyzed, which may explain why the transition from a demo-based audience marketplace to a purchasing behavior-based audience marketplace has been slow to materialize. Between the possible information overload problems from a media buying standpoint and the collapse of traditional targeting strategies from a programming standpoint (e.g., what kind of show attracts people looking for auto insurance?), the magnitude of such a transition probably couldn’t be exaggerated.

But if there was ever a time when such a shift in currency could take place, now is the time. Discontent with the status quo is widespread. And the technologies for gathering and analyzing the relevant data in ways that are cost-effective, as well as sufficiently accurate and reliable, may finally be at hand.

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