The Boundries of Demography
Defining Target Groups

Brands tell stories. And stories need heroes. Read on to find out how to find them, and what this has to do with King Charles and Ozzy Osbourne. We look at two models, the audience segmentation of economist and marketing pioneer Philip Kotler and the persona concept of US software developer Alan Cooper.

The Boundries of Demography

Dr. Peter Gentsch is the founder of the Business Intelligence Group (B.I.G.) in Berlin. At SMICS in Amsterdam in 2012, he presented a sensational set of slides to illustrate the power of predictive analytics. It shows two nearly identical profiles of an individual. Kotler’s classic definition of a target audience provides the semantic foundation:

• Male
• 60 – 70 years old
• 2 adult children
• very wealthy
• married multiple times
• loves dogs
• spends winter vacations in the Alps

His conclusion made some people laugh, others think: King Charles and Ozzy Osbourne are indistinguishable by their demographic profiles, they have exactly the same socio-economic characteristics. However, common sense suggests that the two people act and make decisions very differently.

Kotler’s audience segmentation is downright blind to a person’s attitude, motivation, or behavior. That is not even surprising: it is simply not its purpose. But this also means that the audience is missing the crucial part of our identity that drives our actions. If we want to understand or even predict how or why a person acts, we need more information. And that information, according to Gentsch, can be found on social media.

As early as 2012, it was possible to infer a person’s gender, sexual orientation or even IQ from an average social media profile. Four years later, Valerie Tischbein’s article “98 pieces of data that Facebook knows about you” underlined a rapid and frightening development that only Mark Zuckerberg knows where it really stands at the moment.

Gentsch’s talk is worth mentioning because even a decade later, some agencies still rely almost exclusively on demographic models. At one point, I even had to defend “my” point of view against Kotler’s target group segmentation at a university where I was recently allowed to teach. After all, I was contradicting what one lector had been teaching her students for years. And that is a clear no-no.

That irritated me. As the reason for this attitude that is rapidly gaining ground in the industry, is obvious: There is simply no way around digital media any more: print media is losing relevance and reach, information is available faster and more up-to-date online, and advertising can be tailored to the user individually and cost-effectively. We may or may not like that, but it doesn’t change anything about the facts.

For a better understanding, it may help to go back in time a little bit and recognize the economic environment in which Kotler’s model was developed:

So when a manufacturer built a family van in the U.S., it targeted the average U.S. family – and made sure to place the product as close as possible to the customer in terms of price and location. Product, price, placement. Kotler’s model was ideal for this.

The World is getting smaller

Today’s world is both smaller and more complex. Globalization – fueled by growing prosperity and worldwide connectivity – allows us to compare products from Austria with those from Spain, the U.S. or even China and have them delivered in a similar time.

It is not enough to communicate with everyone for whom my product would be useful. The question is, why should a consumer choose my product and not my competitor’s?

So you need differentiators where there are hardly any.

This is irrational.

Because if I were to think through the purchase objectively, I might realize how contradictory Apple’s core message really is: Individuality contradicts the basic principle of a mass-produced product. In other words: My neighbor has an Apple product. Think differently?

But we do not formulate this need for individuality consciously; it is more of a “feeling”, something that attracts us, vague and indefinable. A rational thought is much more concrete. I often find myself using reason to justify to myself (and others) a gut decision. So is it really our feelings that determine our decision-making behavior?

Demographic models are of little help here. To paraphrase Simon Sinek, the “what” is always comparable; there are products or services that perform the same function – and they are probably good ones. The demographic target of a family van is always similar-not only to its own product, but also to those of the competition. So, at best, the models are good for narrowing down the target market to individual segments, but not for developing effective communication.

And this is where Alan Cooper’s persona comes into play.