What Is Demographic Targeting and Why Should You Be Using It?

January 19, 2021

demographic pie

Alright, let’s talk statistics. Time and time again, research has found that 20% of new businesses fail in the first year, 45% are toast after five years, and 65% are out of the game after ten years. Why does this happen?

We all know that in order to thrive, you need to make money, which means that you need to spend money wisely. For either of these things to happen, you need to know when and where to spend your money and who to spend it on.

All of that can be solved with some good old fashioned demographic targeting.

At PunchDrunk Digital, the goal of our services is to make sure that your marketing budget is maximized with good ads, good placement, and solid research. Demographic targeting is one of the first steps towards creating a successful, lucrative marketing campaign. Read on to learn everything you need to know about demographic targeting and why you should be using it.

What Is Demographic Targeting?

First, let’s talk about what we mean when we’re talking about demographics. Demographics refer to the categorization of groups of people based on a shared trait. Yes, that means that you could consider, say, Star Wars fans a demographic that is separate from Star Trek fans, but in the beginning, we tend to go a little broader.

The major demographic groups we look at in marketing are:

  • Age
  • Gender
  • Race and/or nationality
  • Geographical location (which can be as broad as a country or as narrow as a neighborhood)
  • Income
  • Marital status
  • Parental status

If demographics are groups of people with a shared trait, then demographic targeting is selecting one of those groups of people and marketing directly to them. The reality is that very few businesses are selling products or services that appeal to every demographic! By taking the time to understand who your business appeals to, you can learn how to reach them in more efficient and innovative ways.

How Can You Narrow Down Your Target Demographics?

How do you figure out who your business or brand appeals to? Sometimes, it’s hard to objectively assess our own businesses from within. With the help of professional marketers (like us!), you can take a step back and look at your business in a new light.

To get you started on the right foot, let’s brainstorm some questions you should be asking about your business.

Who Do I Want to Appeal To?

Start with your own desires and the image you have in mind for your business. Maybe you’re selling fitness gear that you feel would work wonders for moms or businesswomen with busy schedules. Maybe you’re selling clothing that you’re hoping will appeal to young folks who love a good trend.

This is what we sometimes refer to as your “ideal” customer. It’s who you want to appeal to and, with some effort, research, and marketing, it can happen. However, you also have to think critically about whether or not your products really meet the needs of your ideal customer.

What Needs Can My Business Meet?

This is where you can start to get a little bit more objective in your thinking. What product or service does your business offer and what needs can they fulfill?

For example, let’s say that you’re running a high-end specialty grocery store. Your products meet the needs of individuals who are looking to cook more at home, add a little more excitement to their kitchen, and have a disposable income. However, that means that some people are left out of your target demographics because your products aren’t going to meet their needs.

Who Am I Not Trying to Appeal To?

You know who you want to appeal to and you’re starting to understand a little bit more about who you do appeal to. That means that it’s time to think about who’s left out of this market and whether or not you want to make the changes necessary to meet their needs.

Let’s go back to that example of a high-end specialty grocery store. Remember that we’re looking at a target demographic who enjoys cooking, which means that people who rely more on pre-made or restaurant-made meals–perhaps college-aged people–are probably not your best bet. Your products are also a bit pricier because they are unique and high-end, which means that lower-income families may not frequent your store.

Changing your business model to meet the needs of a wider market is a possible option, but it isn’t always the most realistic option. Instead, it may be more practical to recognize who your business doesn’t appeal to when narrowing down your target demographics.

What Other Types of Market Segmentation Should You Consider?

There are other ways that you can start to understand your target market beyond the traits we’ve already discussed. After all, some people may share more on paper (like age or gender) than they do in real life. By looking at a few different types of market segmentation, you can start to think more specifically about how people operate and who you should be reaching out to.

Psychographic Segmentation

Psychographic segmentation relates to our subjective traits including our personality, values, actual or desired lifestyle, and motivations. Many of us actually rely on our consumer habits to try to bridge the gap between our actual self and our ideal self. In other words, you can look at who your business appeals to based on how it fulfills certain value-based or lifestyle-based needs.

Behavioral Segmentation

Behavioral analytics constitutes an entire field of study in the business world. The goal is to examine consumer behaviors, in particular, to understand how people tick specifically as consumers.

This is where you might ask questions like, “What kind of content makes this person more likely to follow the call to action? What types of products have they purchased in the past that they are likely to purchase again? Are they more responsive to one-time sales or ongoing membership perks?”

How Is All Of This Demographic Targeting Going to Help You?

You’re getting an idea of how all of this demographic targeting stuff works. However, you may still be wondering, “How is this going to help me?”

Demographic targeting can sound like a lot of work and, in the beginning, it does take some serious research. That being said, it’s always worth it in the long term and we’ll explain why.

Customize Your Ad Campaign

Remember how you asked yourself who your ideal customer is but also thought about who else your products might appeal to? Now, you can generate different marketing materials for each of these different demographics and decide how much to invest in them. You can experiment with focusing more heavily on the marketing geared toward your ideal customer than your other target demographics and see if it produces the desired effect.

Stop Wasting Your Budget

Remember how you also came to terms with the demographics that aren’t quite part of your market? It’s time to stop wasting your budget accidentally marketing to those demographics.

For example, let’s say that your brand appeals primarily to people who are young and spend quite a bit of time online. If that’s the case, it’s going to make more sense to focus your energy on your digital marketing–ie social media–than your print marketing. It’s also going to make sense to stop sending print mailers to older demographics who are not going to take the bait.

Build Customer Trust and Brand Loyalty Faster

Ultimately, one of the biggest goals of any marketing campaign is to build up brand recognition, which leads to trust, which leads to loyalty. Right?

By narrowing down your target demographic and amping up your efforts in the areas where it matters most, you’re going to see an acceleration of that process. In the end, you’re reaching the individuals who have needs that you can fulfill, and that’s when you’ll see the real return on investment.

What Can PunchDrunk Digital Do For You?

Where does PunchDrunk Digital fit into all of this talk about demographic targeting? The answer is simple. We’re here to help you develop the marketing campaign you’ve always needed!

To get started, go ahead and take this compatibility test. If we’re not a match made in heaven, we’re not going to twist your arm! If we are a match made in heaven, well, we still won’t twist your arm, but we do think it’s a good idea if we start chatting about your business needs.

Once you’re ready, get in touch with us. We can’t wait to talk about why your business and our services are like peanut butter and jelly!