Demographics Definition
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 with college degrees, work full time, and have 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.
