When it comes to advertising your products and services, we all like to think that everyone will be interested in what we are offering. The harsh reality is that certain demographics of the population won’t like or need your goods. However, there are many people out there who will indeed share your passion for your brand. All you have to do is find them.
Demographic targeting allows for you to target the most profitable proportion of your audience, according to the statistics. Keep reading to find out how to guarantee more lead generation from targeted advertising.
What is Demographic Targeting?
Demographic targeting is an effective behavioural advertising method that utilises demographic information as a means to tailor online ads. By using existing data and information from external sources, browser histories, and demographic details collated by consumer profiles, advertisers are able to build a detailed image of their target consumer.
Using this picture, marketers can segment their audience demographically, making valuable decisions about their advertisements to ensure it is seen by the largest proportion of their targeted demographic.
The Importance of Demographics Targeting: Why is it needed?
As with most business decisions, the benefits of utilising demographic targeting is economical. Consumer needs often have direct correlations to certain demographic variables; therefore, businesses can easily access this information to ensure their marketing content achieves the maximum Return on Investment (ROI) on their advertising budget.
It is good practice for both small and large businesses alike to ensure they are getting the most out of their money. For every pound you spend advertising and promoting your products and services, you want to ensure the best possible chance of converting site visits into sales. That way, your advertising campaign proves to be worth its while. However, to tailor your advertisements to the right people, you need to know and understand the different methods of segmenting the population.
What is the difference between audience targeting and demographic targeting?
Demographic targeting differs from audience targeting by including an aged or gendered-focused angle that is impersonal. Whereas, audience targeting puts real people at the heart of its approach using sites, apps and videos they have actively browsed.
Demographically targeted approaches allow for your products and services to be evaluated in line with your wider audience. Considering your audience as a whole and the multiple niches it spans, allows your adverts to be designed more effectively. Improving their ROI and giving them a multi-angled approach, allowing them to have a higher success rate.
Different Types of Demographic Segmentation
Successful demographic targeting considers the four main options of demographic segmentation, including age, income, race and gender.
A common demographic segmentation is utilising age to group your potential customers. Different generations will respond to advertisements in different ways, with each grouping favouring certain mediums over others. For example, younger people are more computer literate and technology savvy; therefore, pay-per-click and social media ads are popular choices to get their attention. In addition, video marketing and video platforms such as TikTok and Instagram see high engagement with many scrolling throughout the day.
Older people, however, tend to shy away from advanced technology, favouring old-school TV, radio and paper advertisements over digital forms. But, with more people needing mobiles and email accounts for communication, new marketing trends are developing all the time – 58.4% of people around the globe use social media, for example. Furthermore, our interaction with these different technologies changes as we mature and our circumstances change. In order to retain customers, businesses will need to consider these factors to help support customer retention.
Using income to target consumers is a respectable way to ensure your advertisements are promoting achievable products and services to new consumers. Showcasing your premium goods to low-income earners is unlikely to convert into sales; however, click-through rates are likely to increase in targeting these ads and showing people new products in their economic reach.
It is worth noting, though, not all high earners will want to spend lots of money on luxury, branded items or services. There will also be other factors influencing how much they are willing to spend. When targeting ads, it is worth combining income with other methods of demographic segmentation.
Racial differences can also help advertisers to refine their advertising methods. Race is often inclusive of cultural and religious needs that advertisers should take into consideration. By respecting other races and offering culturally sensitive adverts, prospective consumers are likely to recognise the diversity of your brand. For example, some nations come hand-in-hand with particular religious beliefs; Arab countries are predominantly Muslim, meaning certain food products would be unsuccessful.
Similarly, to age demographics, different genders will also have specific needs. For example, beauty products are no longer a female-centred industry; the male facial skincare market was estimated at £69.8 million in December 2020, with global projections expecting a 3.8% growth annually between 2020 and 2027.
Gendered demographic targeting must be approached with caution, however. Advertisers must identify and respect society’s changing norms. Too much emphasis on gendered groups could be detrimental to your brand. With more people moving away from gender roles and identifying more with non-binary representations, your brand could end up excluding another group of potential consumers.
Multivariate Demographic Segmentation: Why is it useful?
Demographic targeting has many benefits when a business is attempting to filter through the population in an attempt to identify its potential consumers. However, multivariate demographic segmentation increases the possibility of reaching the right people with your digital marketing. The issues that have been identified when segregating only by gender, for example, can be removed when including another demographic. You are less likely to miss those who do not identify as either male or female, by considering another grouping. All in all, further segmentation of your audience helps to filter out a higher proportion of people who do not fit in with your brand’s target audience.
How does Demographic Segmentation relate to other forms of targeting?
In addition to demographic segmentation, brands and businesses can also look to other forms of categorisation to help reach their ideal audience. Demographic segmentation enables a marketeer to build an in-depth picture of their intended customer, designing a multitude of advertisements to focus on each characteristic that builds them as a whole.
There are limitations of demographic segmentation, however. This form of targeting is only able to answer the questions surrounding ‘who’ their customers are and not where they are based, how they operate/think, or why they may need your product/service.
To incorporate these questions within your marketing materials, alternative segmentation strategies will need to be considered, such as:
- Geographical Segmentation – location-based categorising can include anything from countries and regions to specifics such as neighbourhoods and towns. Geographical considerations can also include environmental and climate differences too.
- Psychographic Segmentation – this grouping takes into account social class, personality and lifestyle. It attempts to cover the fact that out of two individuals in the same multivariate demographic segregations, one may buy your goods and one may not.
- Behavioural Segmentation – behavioural considerations include a potential customer’s knowledge, attitude and response to the product/service, by focusing on purchase occasions, benefits, usage, customer loyalty and buyer readiness.
How to best reach your intended audience?
If your brand is new to demographic targeting there are a few things to remember to reach your intended audience.
An easy way to ensure your adverts are reaching your ideal population groups is by combining your demographic segregation with other grouping strategies. The more you can target and tailor your advertisements, the more chances you have of getting your adverts in front of the right people.
When using Google Ads, it is also possible to do the opposite and include certain demographic categories of areas of the population you would like to exclude. This filtering process helps to remove time-wasters; hiding your advert from demographic groups that you consider are not appropriate for your goods/services. Adding in this extra detail avoids wasting your money showing your pay-by-click adverts to the wrong audience. Instead, you want to be dedicating time to analysing your intended audience in more detail, allowing you to fine-tune this process.
Another method you can utilise is customising your bids. This Google Ads feature allows you to show your ad to everyone; however, you can choose to place higher or lower bids on particular demographic groupings.