Why Demographic Media Plans Are Inefficient for CPG Brands

For many years, CPG brands planned their media campaigns against demographic segments derived from research about the age and gender of their core customers.  Today, with the emergence of precision marketing and big data, it’s apparent that a demographic-based approach is wasteful at best.

In a study powered by Nielsen Catalina Solutions (NCS), Catalina Marketing has published an analysis of the purchase behavior of 3,800 Nielsen People Meter (NPM) households, regarding 10 leading CPG food brands that combined to spend a total of over $415 million on measured TV media in 2011.

Linking media exposures to purchase behavior, the results of the study are telling: Demographics are a poor indicator of purchase behavior.

  • Demo-based media plans over-deliver to low-value consumers
    • The average brand in the study delivered 64 percent of television media exposures to households accounting for 2 percent of sales
  • Demo-based media plans under-deliver to brands’ best consumers
    • A mere 36% of exposures reached the households that accounted for 98% of brand sales
  • Common demo targets miss a majority of sales volume
    • Households headed by women aged 25-54 provided just 47 percent of sales for the average brand

Fortunately, CPG marketers have an alternative to the inefficient demographic-based approach to media planning. Purchase-based targeting – the ability to segment audiences based on their actual in-store purchase behavior – offers a dramatic improvement to the demographic-based approach.

To learn more about how demographic targeting misses the mark for CPG advertisers, read Catalina Marketing’s Deconstructing Demographics” case study in its entirety. For more information on how NCS can power purchase-based media planning for your next campaign, please get in touch.