ST. PETERSBURG, Fla. — Simple demographic targeting does not weight advertising exposures toward households that have greater purchasing value, according to a study by Catalina Marketing released Monday. The study shows that, for a cross-section of major consumer brands, an average of just 15% of television ad exposures reach the households that account for 80% of sales. Meanwhile, brand advertisers deliver 64% of exposures to households that account for just 2% of sales.
"We undertook this study at the request of customers who wanted to better understand how demographic targeting improved delivery against their most valuable buyer segments," stated Todd Morris, EVP for Catalina. "Our findings show that demo-based targeting significantly under delivers against the most valuable buyer groups. Across $415 million in TV media spending by 10 mega-brands, ad exposures were delivered to every buyer audience in proportion to its size of population, not its value to the brand or the category."
Among important study highlights:
Demo-based TV media plans treat all buyer groups equally, no matter what their value to a brand. As a result, heavy category buyers, who spent almost five times more than the average household, received just 3% more exposures;
The average brand in the study delivered 30% of exposures to households that were inactive in their category, meaning they never bought the category or bought just one time throughout the 12-month study period; and
A majority of sales volume falls outside of common demographic targets. More than half (53%) of sales for the average brand fell outside of the demographic target (households headed by women between ages 25 years and 54 years).
According to the report, advertisers have relevant and actionable insights than demographics by which to target consumers on a mass scale. Among these new models is purchase-based audience buying, in which actual shopper data is used to determine the consumers and buyer audiences that receive advertising from brands.