What Is Demographics? Definition, Usage, Examples in Advertising

Demographics is the analysis of the characteristics of populations and subsets of populations, such as age, race, and gender. Now considered a necessity in the advertising industry, demographics helps businesses identify those consumers most likely to buy their products or services.

Demographics Definition and Use

In advertising, demographics are key to creating targeted marketing campaigns that appeal to specific groups of consumers. For example, Southwest Airlines, which prides itself on being a basic low-fare carrier with frequent direct flights to many locations, targets its advertising toward middle-class families, small business owners, people who typically take short trips, and young adults. Conversely, United Airlines, which charges higher fares in return for more passenger “frills,” targets people who have college degrees, full-time jobs, and household incomes of at least $50,000.

In most cases, businesses find demographics-based targeted advertising strategies more cost-effective than “shotgun-style” mass marketing efforts. This approach leads to increased sales and brand awareness.

Faced with the growing costs of consumer marketing, businesses increasingly rely on demographics to identify the best possible target audiences for their advertising campaigns. Since the size and preferences of different demographic groups change over time, it is also important for companies to identify demographic trends. For example, companies use demographics to anticipate the needs of the aging U.S. population. As people grow older, they tend to spend more on health care products and services, and the method and tone of advertising to these older customers is very different from that of younger consumers.

Demographic Factors

Traditionally, demographics provides consumer information based on factors that can include, but are not limited to:

• Age and generation groups
• Sex, gender, or sexual orientation
• Nationality
• Race
• Educational level
• Occupation
• Household income
• Marital status
• Number of children
• Homeownership (own or rent)
• Place of residence
• Health and disability status
• Political affiliation or preference
• Religious affiliation or preference

In number and scope, the factors used in demography—the collection, analysis, and use of demographics—can vary widely depending on the type of research being done. Besides advertising and marketing, demographics are also used in politics, sociology, and for cultural purposes.

Sources of Demographic Data

Advertisers get demographic information from a variety of sources, including the U.S. Census, private research think tanks, marketing firms, and the media. In today’s world of instantaneous information, demographics have become a valuable commercial commodity.

Television and radio stations pay research firms like the Nielsen Company and Arbitron to collect detailed and up-to-date demographic data about their viewers and listeners. Magazines and larger newspapers supply demographic data about their readers to potential advertising buyers. In social media—the internet—valuable consumer information is collected from individuals willing to accept “cookies” on the websites they visit. 

Audience Demographics in Advertising

Virtually all advertising campaigns begin by identifying the ideal target audience. Once all of the demographic data about the consumers of a specific product or service has been compiled, it is used to formulate a “creative brief,” an essential document describing the target audience and how to best communicate with it. In identifying ideal target audiences, advertising firms tend to take one of three approaches.

Target Audience Character

Considered the best approach, enough demographic data is collected to develop a very specific target audience character. For example, a high-end brand of wristwatches might appeal to a married 45-year-old man with a master’s degree and a neatly-trimmed beard who works as an investment banker, drives a Mercedes convertible, collects classical music, and takes golfing vacations in Europe in his spare time.

General Audience

Though considered acceptable, advertising campaigns targeting general audiences are less likely to succeed because of the difficulty in getting the message about the product across to a broader spectrum of the population. For instance, specifying all people ages 20 to 45 who have jobs, own a car or truck, and like sports requires communicating with far too many people. As a result, advertising campaigns to general audiences often suffer from becoming too generic in their tone.

Everyone

Advertising campaigns that try to reach a target audience of “everyone” are rare and doomed to fail. Still, companies occasionally try to reach almost everyone by targeting primary and secondary audiences. For example, an actual ill-fated advertising campaign for a major frozen food chain targeted a primary audience of men and women ages 18 to 49 with low to middle incomes who buy groceries, along with a secondary audience of anyone ages 8 to 80 of any income level who shop in grocery stores.

The most successful campaigns are those that have identified every possible demographic detail about their potential customers. Trying to reach a too wide or generic audience is usually a fatal error.

Misinterpreting Demographics

Misinterpreting demographics can also lead to failure. For example, Procter & Gamble initially failed to sell its Swiffer line of floor mops in Italy because its advertising targeted women who wanted convenient cleaning products. When P&G figured out that Italians wanted cleaning power, it modified its advertising, thus making the Swifter a huge success. 

How to Determine a Target Demographic

With enough demographic data in hand, advertising firms employ several types of research methodologies in determining the ideal target audience. Here are a few.

Pre-Campaign Research

Usually conducted through conventional or online surveys, pre-campaign research is used to uncover different—sometimes unexpected—potential customer groups.

Now easily set up and conducted using internet services like Survey Monkey, online surveys have become one of the most commonly used tools of market research. By allowing advertisers to determine the preferences of potentially millions of consumers without the need for in-person contact, surveys are a very cost-effective method of market research.

Focus Groups

A key part of pre-market product appeal research, focus groups are small but demographically diverse groups of consumers assembled to discuss a particular product before it is launched. By allowing the participants to physically handle and use the new products and offer their feedback about them, focus groups are often combined with demographics in designing advertising campaigns.

However, while focus groups can help determine how products might be improved, they can also be harmful to the advertising campaign. They may include too small a segment of the chosen demographic group to get an adequate response, and they may be swayed by the group’s moderator or by an overly aggressive group member. 

Psychographic Research

Despite its unchallenged power as an advertising tool, demographics alone has its limitations. While demographics expose who is likely to buy a product, it does not explain why certain consumers prefer one product over others. To understand what subtle internal, rather than obvious external factors like age and gender, motivate consumers, advertisers often combine demographic research with psychographic research to produce sensory marketing campaigns. Psychographic research strives to reveal what beliefs, feelings, thoughts, biases, and other psychological factors motivate consumers.

For example, the Pepsi-Cola Company was experiencing slow sales of its newly acquired Mountain Dew brand soda because people viewed it as a product consumed mainly by low-income individuals living in the rural South. In simple terms, Mountain Dew was not considered “hip,” a psychological factor not taken into account by traditional demographics. In response, PepsiCo launched a new Mountain Dew advertising campaign targeting people ages 18 to 24 in urban areas. Ads featuring skateboarding star Paul Rodriguez and hip-hop artist Lil’ Wayne aired in major cities nationwide, implying that popular young athletes and musicians preferred Mountain Dew. With its new “rock star” image, sales of Mountain Dew soon increased. 

Sources

• “Demographics.” AdAge, September 15, 2003, https://adage.com/article/adage-encyclopedia/demographics/98434.
• “Demographic Targeting.” Know Online Advertising, http://www.knowonlineadvertising.com/targeting/demographic-targeting/.
• Boykin, George. “Demographics in Advertising Strategies.” AZcentral, https://yourbusiness.azcentral.com/demographics-advertising-strategies-4309.html.
• Meredith, Alisa. “How to Use Psychographics in Your Marketing: A Beginner's Guide.” HubSpot, https://blog.hubspot.com/insiders/marketing-psychographics.