Using Enhanced Geodemographic Clusters Versus Simple Demographics

in Targeting and Media Planning – Case Studies of an Automobile, a Prosthetic Device and a

University

Tony Lea, Ph.D. , Environics AnalyticsLocation Technology and Business Intelligence

ConferencePhiladelphiaMay 3, 2005

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Traditional Geodemographic Segmentation

▲ “Clusters”▲ Classification of neighbourhoods into lifestyle

types or geodemographic “clusters” based on their characteristics- Census: Demographic & Socio-Economic- Enhanced Income (proprietary)- Settlement Context (proprietary)- Automotive Ownership- Behaviour: how people spend their time and money

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Recent Innovations in Geodemography

in Canada▲ PRIZM CE

▲ Addition of Social Values- For the first time, attitudinal data (beliefs, values,

mindsets) helped define clusters- e.g. Primacy of the Family, Ethical Consumerism,

Ostentatious Consumption, Corporate Responsibility

▲ Special Link to PRIZMNE Cluster System for US- 16 of 66 clusters in PRIZMCE are the same based

on demographics, urbanity and behaviour (25% of Canadian households)

- Good starting point for cross-border targeting

Clusters Around TorontoSample Locations of Selected Clusters

©2004 Environics Analytics Group Ltd.

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Mapping Technology Enhances a Key Value of Clusters –

Projecting survey data to small areas

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Using Geodemographic Clusters▲ From the profile, select

target groups of clusters

“Professional Families” Target

“Struggling Newcomers” Target

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Using Geodemographic Clusters▲ Identify your targets’ behaviours:

- Cross-Promotion (via Purchase Behaviour & Leisure Activities)- Sponsorship (via Social Values, Leisure, Purchase Behaviour)- Co-branding (via Purchase Behaviour & Leisure Activities) - Content and Imagery in Communication (via Leisure Activity)- Telemarketing: design of target-specific scripts

Activity Index Activity Index

Art Galleries/Museums/Science Centres 169 Dancing/Night Clubs 135Sailing 197 Yoga/Pilates 127Theme Parks/Water Parks/Water Slides 134 Theme Parks/Water Parks/Water Slides 137Laptops 145 Fido 244Garage Door Openers 203 Camera in Past 2 Years 145Amazon.ca 169 Shop at Roots 168

Selected Leisure Activities & Purchase BehaviourProfessional Families Struggling Newcomers

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Using Geodemographic Clusters▲ Identify your targets’ values:

- Communication Strategy (via Social Values)- Sponsorship (via Social Values, Leisure, Purchase

Behaviour)

Environics Social Values Trend Index Environics Social Values Trend IndexImportance of Aesthetics 146 Fear of Violence 165Global Ecological Consciousness 136 Intuition 151Equal Relationship with Youth 134 Search for Roots 143Enthusiasm for Technology 133 Connectivity 138Pursuit of Orginality 131 Religiosity 134Vitality 128 Civil Disobedience 134Cultural Fusion 128 Confidence in Big Business 133Networking 127 Ethnic Intolerance 132Need for Escape 126 Anomie 129Control of Destiny 123 Adaptability to Complexity in Life 128Social Darwinism 122 Importance of National Superiority 127Adaptability to Complexity in Life 122 Saving on Principle 126

"Professional Families" "Struggling Newcomers"Selected Social Values

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Using Geodemographic Clusters

▲ Identify your targets’ media preferences:- Media Strategy (via Media Behaviour)

Activity Index Activity Index

Hot Adult Contemporary Radio 144 Hot Adult Contemporary Radio 143Urban Radio 208 Classical/Fine Arts Radio 132Traffic Reports on Radio 138 Sports (play-by-play) Programs on Radio 118Watch A&E 126 Heavy TV Viewership 83Watch Food TV 142 Watch Much More Music 141Watch Hockey on TV 3+ Hrs (Wk) 117 Watch Basketball on TV 151Read Globe & Mail 1+ Times (Wk) 149 Read Globe & Mail 1+ Times (Wk) 171Read Canadian Living 126 Heavy Community Paper Readership 84Read Men's Magazines 113 Read Men's Magazines 121

Selected Media PreferencesProfessional Families Struggling Newcomers

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Why Use Clusters?▲ Multi-dimensional: a more complete picture

- A cluster or lifestyle is the realistic interaction of hundreds of variables: socioeconomics, demographics, behaviour, attitudes

▲ Simple traditional demographics can fail to reveal secondary targets that clusters capture- Handles market fragmentation, and media

fragmentation▲ Uncover target consumers’ attitudes to

improve communication with them- Direct measures of attitudes for each cluster makes

optimal design possible

▲ All in straightforward, fully consistent manner across all media , automatically in software

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Using Clusters to Improve Targeting:

Acura

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Acura Demographics

▲ From BBM Canada, Acura drivers’ demographics:

Canada

% %

IndexAge 12-17 9.30 2.03 22Age 18-24 10.21 20.96 205Age 25-34 16.90 20.13 119Age 35-44 18.58 16.94 91Age 45-49 10.17 9.38 92Age 50-54 8.16 8.40 103Age 55-64 12.22 9.48 78Age 65+ 14.45 12.69 88Under $20,000 - Household Income 8.24 3.64 44$20,000 - 29,999 - Household Income 8.66 11.44 132$30,000 - 39,999 - Household Income 10.67 10.61 99$40,000 - 49,999 - Household Income 10.08 8.85 88$50,000 - 59,999 - Household Income 10.83 6.55 60$60,000 - 99,999 - Household Income 24.32 27.77 114$100,000 or more - Household Income 12.61 17.07 135

Acura-Drive Most Often

Young

Bi-modal income(either low or high)

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Acura Demographics

▲ From BBM Canada, Acura drivers’ demographics:

Skew Francophone

Strong Ethnic

Canada

% %

IndexEnglish - Most Often Spoken At Home 72.98 62.09 85French - Most Often Spoken At Home 21.65 27.94 129Chinese - Spoken Conversationally 2.11 7.07 336Greek - Spoken Conversationally 0.37 1.13 302Italian - Spoken Conversationally 2.13 3.82 179Portuguese - Spoken Conversationally 0.80 0.55 69Spanish - Spoken Conversationally 2.40 1.87 78Japanese - Spoken Conversationally 0.43 0.63 148Vietnamese - Spoken Conversationally 0.15 0.34 232Punjabi - Spoken Conversationally 0.50 1.04 206Hindi - Spoken Conversationally 0.71 1.81 256

Acura-Drive Most Often

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Acura Demographics

▲ From BBM Canada, Acura drivers’ demographics:

Skews to families

Well-educated

Canada

% %

Index1 person - Household Size 9.35 8.08 862 persons - Household Size 33.10 30.99 943 persons - Household Size 20.02 24.83 1244 persons - Household Size 23.55 27.84 1185 persons - Household Size 9.49 5.17 556 persons - Household Size 3.02 1.30 43Public or grade school - Education level 7.73 1.72 22Some high school - Education level 16.28 4.82 30Completed high school - Education level 19.71 19.55 99Some comm/tech - Education level 9.38 10.31 110Compl comm/ tech - Education level 14.96 19.44 130Some university - Education level 9.36 12.68 135Compl university - Education level 19.04 29.26 154

Acura-Drive Most Often

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Acura Target Demographics

▲ In summary:- Young (18-34)- Well-educated- Low or High income (bi-modal)- Skews to families- Disproportionately Francophone &

Ethnic

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Which PRIZMCE cluster has the highest index for “Acura – Drive Most Often”?

Downscale seniors in

small towns

Very affluent middle-aged and older city

dwellers

Young and comfortable immigrant families in suburbia

More information on the choices…

Town and villageOlder and matureSingles and couplesGrade 9 and high

schoolBlue collar and serviceOwn older SD housing

Urban exclusive areasVery wealthyMiddle aged and olderFamilies - kids 13 -24University educated (and PLUS)White collar, executive and

prof.Own older SD housing

SuburbanYounger (25-35)Families, kids < 16College and universityService and white collarOwn and rents SD and

town houses - newer

CampersFishingDenturesOutdoor Life NetworkPie FillingsCar Maintenance by SelfSaving on Principle

SailingDrink scotch$2500+ on Women’s ClothingCanadian House and HomePrivate Banking ServicesBMWNeed for Personal Achievement

Bridal ShowsLenscraftersForeign VideosPotato ChipsSubaruImportance of National

Superiority

Demographics

Preferences

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Which PRIZMCE cluster has the highest index for “Acura – Drive Most Often”?

Downscale seniors in

small towns

Very affluent middle-aged and older city

dwellers

Young and comfortable immigrant families in suburbiaIndex 315 421 63

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▲How does the PRIZMCE profile reflect the demographic profile discussed earlier?

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Many high-indexing clusters are “bang-on” the simple

demographics…

Index 355 248 223 216 207 202

Index 187 185 182 175 173 161

▲ These 12 “core” clusters all drive Acura at high rates▲ 32.0% of Acura drivers (15% of hhds; 15.7% of population)

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Other high-indexing clusters don’t match the Acura pure demographic

profile above:Index

432

309

301

Very affluent middle-aged and older city dwellers

Wealthy middle-aged urban sophisticates

Sophisticated urban Quebec couples and singles

▲ 7.7% of Acura drivers (4.4% of population)

Upscale, Older Couples & Families

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Other high-indexing clusters don’t match the Acura demographic profile

above:Index

315

184

157

Downscale seniors in small towns

Older working-class town couples and retirees

Older downscale Francophones in remote towns

▲11.3% of Acura drivers (5.2% of population)

Older, Down-scale, Small-Town Couples

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Others fit the demographics but index low

Index

63

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Young and comfortable immigrant families in suburbia

Young and active Quebec students and singles in cities, mainly renters

▲ 3.2% of Acura drivers (4.7% of population)

THIS THEME OF “FIT… BUT INDEX LOW” IS NOT FOLLOWED UP HERE

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Target consumers differ in their values

▲ The “core” target consumers that match the demographic profile have different values from the consumers that don’t:- Upscale, Older Couples & Families- Older, Downscale Small-Town Couples

Autonomy &Well-Being

Social Success, Materialism & Pride

INDIVIDUALISM AND IDEALISM

CONFORMITY AND EXCLUSION

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Openness &Experience

Security, Stability &Exclusion

Social Values Map

CANADIAN IDENTITY

ECOLOGICAL ALARMISM

BELONGING TO THE "GLOBAL VILLAGE"

ATTRACTION TO NATURE

NEED FOR AUTONOMY

NEED FOR ESCAPE

GOVERNMENT INVOLVEMENT

AWARENESS OF MORTALITY

ECOLOGICAL CONSUMPTION

ETHICAL CONSUMERISM

STRATEGIC CONSUMPTION

SOCIAL DARWINISM

DECONSUMPTION

EQUALITY OF THE SEXES

ENTHUSIASM FOR CONSUMPTION

SAVING ON PRINCIPLE

PENCHANT FOR RISK-TAKING

HETERARCHY

IMPORTANCE OF BRAND

IMPORTANCE OF AESTHETICS

IMPORTANCE OF PRICE

PURSUIT OF INTENSITY ANDEMOTIONAL EXPERIENCES

INTEREST IN THE MYSTERIOUS

REPRIORITIZING OF MONEY

FLEXIBLE DEFINITION OF FAMILY

OPENNESS TOWARD OTHERS

SEXUAL PERMISSIVENESS

FEAR OF VIOLENCE

INTUITIVE POTENTIAL

PRIMACY OF THE FAMILY

SPIRITUAL QUEST

PURSUIT OF HAPPINESS TO THE DETRIMENT OF DUTY

RELIGIOSITY

DISCRIMINATING CONSUMERISM

FLEXIBILITY OF PERSONALITY

FLEXIBILITY OF GENDER IDENTITY

MEANING OF LIFE

RITUAL

INTUITION

CONTROL OF PRIVACY

INDIVIDUALISM AND IDEALISM

CONFORMITY AND EXCLUSION

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CYNICISM

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Core Target

Older, DownscaleSmall-Town Couples

Upscale, OlderCouples & Families

Social Values Map

Key Social Values & StrategyCore Target

▲ Importance of Aesthetics

▲Pursuit of Originality▲Enthusiasm for

Technology▲Networking▲New Social

Responsibility

Focus▲Leading edge design▲Advanced technology▲Corporate

responsibility ▲Part of an exclusive

group of drivers

Upscale, Older Couples & Families

▲New Social Responsibility

▲Rejection of Authority▲Flexibility of Personality▲Spontaneity in Daily Life

Focus▲Give incentive to try

and empower them with info to make decision

▲Corporate responsibility▲“Express the inner you”▲“Just jump in for a bit of

fun”

Older, Downscale Small-Town

Couples▲Meaning of Life

Through Material Possessions

▲Utilitarian Consumerism▲Risk Aversion▲Saving on Principle

Focus▲ Impress others▲Practical▲Tried & true…

dependable▲Value

Different Media Habits

▲ Fashion▲ Ethnic▲ Sports▲ Modern music

▲ Arts▲ News▲ Print media

▲ Community media▲ TV▲ Auto magazines

Activity Index Activity Index Activity Index

Modern/ Alternative Rock Radio – Wkly 130 Classical/ Fine Arts Radio 270 Country Radio 156Urban Radio – Wkly 232 News/ Talk Radio 155 Community Information on Radio 165Heavy Radio Quintile 99 Heavy Radio Quintile 108 Heavy Radio Quintile 120Basketball on TV 145 Bravo 129 Miniseries on TV 129Showcase 124 NFL Football on TV 128 Game Shows on TV 120Heavy TV Quintile 83 Heavy TV Quintile 78 Heavy TV Quintile 125Read Newspaper Automotive Section 103 Newspaper Automotive Section 135 Read Community Newspapers Frequently 131Heavy Newspaper Quintile 98 Heavy Newspaper Quintile 147 Heavy Newspaper Quintile 59Read Flare 138 Read Business/ Finance Magazines 190 Read Automotive/ Motorcycle Magazines 146

Older, Downscale, Small-Town Couples

Selected Media Preferences

Core Target Upscale, Older Families & Couples

Media and Themes to Leverage

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Using Clusters to Improve Targeting:

Hearing Aids

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Hearing Aids: Demographics

▲Older (55+)▲ Income skews low (<$40K per

household)▲ 1 or 2 person households▲ Low education▲ Tends not to be ethnic; Hispanic is

the exception

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Many high-indexing clusters are “bang-on” the simple

demographics…

Index 233 229 214 200 188

Index 186 153 136 135

▲ These “core” clusters all have hearing aids at high rates

▲ 22.0% of hearing aid users (12.1% of population)

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Other high-index clusters don’t match the hearing aid demographic profile

above:Index

214

193

147

Upscale, educated professionals and their families

Well-off, middle-aged suburban families

Upper-middle-class multigenerational families

▲ 9.1% of hearing aid users (4.8% of population)

Upscale, Middle-Aged & Older Families

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Other high-index clusters don’t match the hearing aid demographic profile

above:Index

269

145

131

Rural midscale households in blue-collar and service jobs

Young middle-class homeowners in exurbia

Large midscale Quebec families and couples

▲ 9.8% of hearing aid users (5.8% of population)

Middle-Income, Middle-Aged Families

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Others fit the demographics but index low

▲ 2.2% of hearing aid users (5.6% of population)

Index

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32

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Working-class old and young in industrial towns and cities

Older downscale Francophones in remote towns

Mature middle-income suburban homeowners

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Using Geodemographics with Social Values to Enhance Message Creation

for a University Fundraising Campaign

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Case: The Alumni Development Department of a Major Canadian

University▲Approach:

- Profile high value donors using PRIZM CE

- Select target group for direct mail campaign for fundraising

- Analyze social values for the clusters within the target group

- Tailor different messages for the clusters based on values

- Mail prospects with different messages to different groups

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Profile of Past High Value Donors

Target High Potential Clusters

The wealthiest two clusters

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Similar Demographics, Different Values

▲ Both groups are- Wealthy - Middle-Aged- Homeowners- University

Educated- White Collar

▲ But they have different values

Autonomy &Well-Being

Social Success,

Materialism & Pride

INDIVIDUALISM AND IDEALISM

CONFORMITY AND EXCLUSION

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TER

-DIR

EC

TED

INN

ER

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EC

TED

Openness &Experience

Security, Stability &Exclusion

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Different Values

Residents of Cosmopolitan Elite are strongest on the values that so often define the most successful members of society: Rejection of Authority and Need for Autonomy. These Canadians owe their success in part to their insistence on making their own decisions, not automatically deferring to the dictates of religious or political leaders or their employers. They register a strong Need for Personal Achievement and wish to exercise their Personal Creativity. These Canadians see themselves as citizens not only of their local communities (they are strong on Community Involvement), but of the world: they have a sense of Belonging to the Global Village and Global Ecological Consciousness, no doubt bolstered by their travel experiences. They use technology to keep in touch both with professional contacts and with family and friends. Some of their more fearful values, including their Aversion to Complexity in Life arise primarily from their age: change is relentless and these Canadians are slowing down. But on the whole, members of this cluster are embracing the lives they have chosen and the rewards that have accrued to them. Cosmopolitan Elite residents will appreciate marketing efforts that appeal to their open-minded, sophisticated outlook on the world.

Cluster 1: Cosmopolitan Elite

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Different Values

Urbane Villagers is an affluent but not insular cluster. Residents are most distinguished by their commitment to Community Involvement; they are attached to their local environments as well as the people in their neighbourhoods. However, recognition for their contribution is important to them. This feeling of connectedness to place and people gives rise to a number of progressive values, including Global Ecological Consciousness, Ethical Consumerism, a belief in the Primacy of Environmental Protection and a sense of Belonging to the Global Village. Urbane Villagers residents believe that diversity gives life richness: they strongly reject Ethnic Intolerance, and their belief in the Importance of Spontaneity in Daily Life and Sensualism suggests that they are seeking rich new experiences. The threads of diversity, spontaneity and community connectedness weave together strongly; Urbane Villagers residents love the idea of vibrant street life championed by urban theorist Jane Jacobs. These Canadians will be attracted to green products and local business.

Cluster 2: Urbane Villagers

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Different Messages▲ To Cluster 1 Households

- “your money is going to a good cause”- “the university is giving back to the

community”▲ To Cluster 2 Households

- “you will be recognized for your contribution”

- “there will be an event for all donors” - “we serve a diverse, urban community

– your community”

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Response Rates Increased Significantly for Both Groups with Customized Messages

versus a Generic One

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Summary▲ Geodemographic clusters with values built-in

capture the fragmented & multi-dimensional nature of target markets where simple use of demographics often fail

▲ Clusters are very easy to grasp and use▲ Totally measurable across products and media

in terms of both profiles and relationships between them

▲ Allocate media more effectively to different target markets- Emphasize different parts of the offer based on

different values/attitudes across target groups- Find which media are preferred by each target

and allocate dollars based on importance