Geodemographics ‘useless’ as contextual data rules OK

olde shoppers 2Bad news for father of geodemographics Professor Richard Webber – and the data companies which base their products on his 40-year-old classification system – contextual data and insights have consigned his techniques to the dustbin when it comes to defining campaign strategies and optimising performance.
That is according to a new report entitled ‘Digital Re-imagined: Context and Predictability’ from ExchangeWire Research, in association with xAd.
Only  eight weeks ago, Webber was still banging the drum for geodemographics, as he argued that by not targeting campaigns by ethnicity, marketers were missing out on potential audiences.
But while demographic data is still used by marketers, shortcomings are becoming more apparent, the study claims. The research reveals that over half of media buyers (51%) believe demographic segments are ‘of no use’ or ‘of limited use’ when it comes to their ability to help segment and deliver personalised ads to consumers. Within this, nearly a third (30%) see no use for demographic data in achieving these goals.
In contrast, four in every ten marketers believe contextual targeting (including location) will boost the relevance of their ads (43%); improve perception of their brand (42%); and to drive footfall to physical locations (41%).
Furthermore, nearly half (47%) of respondents say using location and contextual targeting makes campaign planning more efficient internally and one third (34%) highlight real-time campaign activation as a benefit.
xAd head of programmatic and strategic partnerships Imran Khan said: “Although consumer behaviour is getting harder to predict, new technology is making it easier than ever before for brands to obtain a wider understanding of their audience. People have never fallen into straightforward demographics, and now we can build campaigns based on real behaviours and audience context.
“Location highlights intent as a visit to a store or specific place is often a larger commitment to purchasing compared to an online search or social share. This opens prime opportunities for brands to target audiences in the right moment based on where they are.”
One third (33%) of respondents say that they implement location and contextual targeting to deliver performance uplift against brand metrics compared to 27% who look for uplift against direct response metrics.
Khan continued: “Contextual and location targeting is offering brands the chance to understand the correlation between their online marketing activity and offline sales for the first time. Mobile means that brands can use digital to drive footfall in the real world. Until now this has been a blind spot for marketers, despite consumer behaviour moving towards the multichannel landscape.”
Skills are cited as the main barrier to implementation of contextual targeting (40%). Marketers indicate however, that measurement (13%) and the technology itself (21%) is not an obstacle to implementation.
ExchangeWire Research head of research and analysis Rebecca Muir added: “Our findings reveal the industry is at a tipping point between the use of demographic data, and location and contextual data to define their campaign targeting. Today’s media buyers are embracing these new targeting parameters, and using these alongside traditional demographic segments to boost the relevancy of their advertising. However, the skills gap needs to be addressed in order to benefit fully from the new technologies available.”
The report is available to download free from here >

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