Bridging the gap

The idea of targeting campaigns by psychographics rather than demographics has been around for a while now, but so has the perennial stumbling block: media that's almost always sold on the basis of audiences measured by age and gender.
The launch of about 40 new digital channels this fall may begin to change that though, as channel owners such as Corus and Alliance Atlantis Broadcasting realize that the key selling point for such channels is their ability to target audiences by interest and outlook rather than age and gender.

The idea of targeting campaigns by psychographics rather than demographics has been around for a while now, but so has the perennial stumbling block: media that’s almost always sold on the basis of audiences measured by age and gender.

The launch of about 40 new digital channels this fall may begin to change that though, as channel owners such as Corus and Alliance Atlantis Broadcasting realize that the key selling point for such channels is their ability to target audiences by interest and outlook rather than age and gender.

Such a change in measurement philosophy would finally help narrow the gap between sellers and media management companies, which have been placing more and more weight on psychographics, lifestyle and lifestage data over the last few years.

Right now, demographics are still the common currency on which media is valued, priced and sold and – because level playing fields and common measurements are crucial for assessing the value of media choices – that’s not going to change overnight, says David Cairns, president of communications and media consultancy Asylum Thinkgroup in Toronto.

‘How can you put a cost on the NHL playoffs if 10 different buyers value it 10 different ways and want to buy it on 10 different values?’ says Cairns. ‘There’s one value and ultimately there’s one price. And that price is going to be settled on the broad demographic.’

But Richard Jean, president of Toronto-based media research consultancy Richard Jean & Associates, says with media outlets such as specialty TV channels increasingly going after audiences defined by their interest in cooking, gardening or independent film, traditional media planning concepts – reach and frequency against a defined demographic – are becoming less relevant. This makes tools for buying by psychographic crucial, he says.

‘Currently the only way to make the association between a psychographic audience and a media outlet is through survey research. PMB does offer some data related to specialty TV, so we could define an audience as ‘those individuals who love to garden.’ This audience transcends age and gender barriers.’

Jean says that audience matching could be used to supplement simple audience count data. The idea is to build up a target profile based on the probability that individuals within that target use a particular medium, product or service, then derive a statistic that measures whether a medium’s audience matches the profile.

This idea of measuring a medium by how well it matches a given profile has actually been put into practice by a U.S. company called Media Plan, which offers a system that rates media by Volume Rating Points, rather than Gross Rating Points. A VRP is something like a ‘product-weighted’ rating for any medium, where the regular points are adjusted according to how well the audience profile matches a product’s target profile.

‘For example, we could say that TSN had a target audience rating of 5% of males 18 to 34 for a particular sports event,’ says Jean. ‘But we could also say that the same event posted an 8% volume rating against beer drinkers.’

Jean adds that once media are selected, buyers still need to buy based on cost-per-thousand. But smart media sellers will recognize that buyers need to express that cost-per-thousand in terms of their psychographic audience definition.

This is complicated stuff, demanding not only number crunching, but also a deep understanding of human behaviour. In terms of the skill set needed by media planners and buyers in this type of environment, should media management firms be recruiting more people with psychology and sociology backgrounds?

David Shiffman, research director with the Toronto office of Chicago-based Starcom Worldwide, says there really isn’t a definitive answer as yet.

‘Media buying now requires a better understanding of how people interact with media and with different brands,’ he says. ‘They need to be able to extrapolate from whatever data services are available and be a lot more analytical, strategic thinkers.

‘We like to believe we’re hiring and populating the industry with people like that, but it’s not fully there yet. I think it’s a matter of developing those skills, of being able to mine the data that’s there, working from different sources.’

Shiffman says that developing such analytical skills will save money for clients down the road, as buyers take more factors into account than just audience size when executing buys.

‘It’s a matter of picking out the media contact points that will reach the people you really want, but still negotiating by audience size. The behind-the-scenes strategic thinking has to be more than this show does a 10 rating, this one does five – 10 is better than five. If you have rich data on psychographics, then maybe there’s more value for a particular client in the five than the 10.’

Given that such targeted buys would mean spending less money on media, it’s easy to see why some media vendors might be reluctant to provide too much information about the audiences they reach.

In fact Hugh Dow, president of M2 Universal in Toronto, says the media selling industry is purposely dragging its feet when it comes to providing buyers with certain types of more in-depth data.

‘The TV and newspaper industries do not particularly want us to have some information – for example television attention levels or sections of newspapers read – because they believe we would then use that to price programs or sections of the newspaper differently.’

Thus, says Dow, there will always be a need for a media operation to fund its own proprietary research. ‘It is costly but on the other hand it can provide a very important competitive edge and, certainly in our experience, can produce significant increases in media efficiency and effectiveness.’

But while Dow maintains that sellers will never provide all the research that media companies need, Sherland Forde, president of Toronto’s MediaVest Worldwide, says he still holds out hope that the research gap will narrow.

‘Those industries need to catch up to what the needs of marketers have been and will continue to be over the next several years,’ says Forde. ‘Most agencies are working with what exists and they’re also still bringing some other elements to it. They are making what I consider to be much more sophisticated decisions and much more effective decisions.’

The arrival of the 40 new specialties may help to accelerate the closing of the gap between buyer and seller. Most specialty channels do provide psychographic and lifestage information about their properties as a rule, mainly because they don’t have the boxcar audience numbers of conventional broadcasters, so their selling point is quality of audience.

Alliance Atlantis Broadcasting was one of the first to enhance its proposition with deeper data, and Doug Davis, director of research, says such information helps the company’s specialties stand out in a sea of options.

Davis says Alliance, like many specialty channel owners, subscribes to PMB. That data is combined with audience numbers by age and gender from people meters plus the broadcaster’s own proprietary information to provide buyers with a better picture of viewers of specific channels or programs.

‘If we didn’t have information like this, every channel would just be measured on relative size of audience rather than propensity to buy. A big audience like TSN might always be seen to be the best station, when really it depends on the product.’

For instance, he says, HGTV, while not generally having big audiences, is the perfect place for someone to advertise hardware products or paint, while the Food Network has natural retail affinity and is obviously a great place for food advertisers.

‘It goes beyond the size of the audience,’ says Davis. ‘It’s who those viewers are and what propensity they have to buy certain products.’

Brad Alles, senior VP of sales and promotions at Alliance Atlantis Broadcasting, says providing this kind of information is now an accepted standard and most specialty reps have followed suit.

The result? Alles says it has helped make the whole medium more respected among buyers.

‘A few years ago conventional stations were always purchased first. We’re more accepted now and purchased at the same time. We’re definitely priced to compete and now we’re not difficult for the buyers to justify.’

Alliance Atlantis Broadcasting has even divided its networks into three sales groups according to lifestyle and interest under the ‘specialty made simple’ banner.

The Lifestyle Networks include BBC Kids, Home & Garden Television, Life Network, Food Network, Discovery Health and One – the Body, Mind & Spirit Channel. The Fact & Fiction Networks are BBC Canada, The Independent Film Channel, National Geographic, History, Showcase, Showcase Action and Showcase Diva. The third group is the French Networks: Canal D, Canal Vie, Historia and Series +.

Some programs have also been packaged across the various networks to appeal to various lifestyle and psychographic segments.

And with even more channels on the horizon, you can expect to see an even greater emphasis on psychographics and other factors beyond audience size.

‘As the audience numbers get smaller in the digital universe,’ says Alles, ‘we’re going to have to figure out why those viewers are important, find different ways to measure who they are.’

As a result, he says, other factors will have an impact on the ‘quality’ of specialty channel viewers. For instance, like the increased value media buyers place on paid subscribers when it comes to magazine and newspaper readers, viewers of ‘premium-priced’ specialty television can be weighted the same way.

‘There’s got to be something to the fact that these new digital stations cost more each month. These viewers can afford to pay for these extra programming choices, and we think that’s very desirable for advertisers to reach those with higher disposable incomes.’

On the client side of the business, companies such as Kraft Foods in the U.S. and Kellogg Canada have also moved toward structuring their marketing departments according to lifestage or psychographics.

The result of Kellogg Canada’s new structure has been evident over the past few years, especially in the children’s, women’s and ‘health conscious’ markets. Many of Kellogg’s more successful initiatives, such as the launch of Vector (‘a meal replacement in a flaked format’) in 1999, and an advisory kid marketing panel called the Jacks Pack can be ultimately traced back to Kellogg’s more lifestyle-centric outlook.

In the U.S., media management companies such as Starcom Worldwide have also structured along these lines – particularly for the kid and youth segments – to form groups specializing in a particular demographic or lifestage.

But the Canadian industry doesn’t believe this is a very practical way to structure firms here, primarily because of the relative size of the Canadian marketplace compared to the U.S.

‘Most media management companies or departments are divided into groups that either service an individual client or a group of clients,’ says M2 Universal’s Dow. ‘They tend to align themselves to the particular lifestage that particular client is interested in. So specializing in lifestage happens anyway, but it tends to be client-driven.’

Starcom’s Shiffman says flat out that structuring media operations by lifestage or psychographic group wouldn’t work.

‘How limiting is that in terms of their use within the company?’ he says. ‘If you only have one client that’s in that zone and it’s only one of their brands at that, it gets really tricky to have someone who specializes in one lifestage or psychographic cluster.’

As far as he’s concerned, media planners who specialize in a particular medium, such as print or broadcast, have a better understanding of how a particular psychographic group interacts with that medium anyway.