Silverpop - The Death of Demographic Targeting
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The Death of Demographic Targeting

Bill Nussey, Silverpop
by: Bill Nussey (@bnussey)
29 August 2006

Did I get your attention? Okay, so demographic targeting will never die any more than the Web will kill TV or RSS will kill email. But a recent article in Fortune magazine did get me thinking about this.

In its August 21, 2006 issue, Fortune editor Geoffrey Colvin interviewed the CMO of Best Buy, Michael Linton. It's a great interview and I recommend reading it all the way through if you can:

The part that really got me thinking is Linton's quote, "... trying to market to demographics is less important than trying to market to purchase patterns or behavior." He goes on to explain that consumers don't necessarily want to be grouped in by their age or income levels any more. He says that marketers are far better off marketing to people based on what they do rather than who they are.

For decades, marketers have had little, if any, real behavioral data to work with. Marketing was brand driven. Purchase information was lost in the downstream retailers and distributors. Pre-purchase behavior was all but impossible to track. For all these reasons and more, marketers have developed a great deal of expertise around grouping their buyers by the only information they had available -- their demographics like age, gender, income and ZIP code. This approach led to the movement of the data companies like Axciom, Experian and Equifax into the marketing world. By matching customers' names with the demographics these companies gleaned through their credit businesses, marketers were able to get new insights into segmenting and analyzing their customers.

The Internet is changing all this.

For the first time in the history of marketing, not only is it possible to easily link purchase information to marketing databases, but the even more elusive behavioral data is now readily available. I think Mr. Linton's quote will be seen as visionary as we look back in the years to come.

Ask yourself, if you want to find the 10,000 people most likely to respond to zero-percent financing on a new car, would you rather know their age and ZIP code, or which people recently clicked on your newsletter looking for more information on financing options? For the new generation of marketers, the answer is easy.

I don't think demographic targeting is ever going away. But mark my words, the rise of behavioral targeting is now officially underway.




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