Data, in theory, gives advertisers the ability to understand the markets they serve in more depth than ever.
Customers, for instance, can be segmented in a variety of ways – demographically, psychographically, behaviorally – and powerful techniques like cohort analysis enable marketers to compare how various segments behave over time.
So why is it with access to so much data and intelligence, so many brand marketers continue to develop strategies around overly broad segments, like “Baby Boomers” and “Millennials”?
The latter in particular, for instance, have been a hot topic for marketers in recent years, and for good reason: individuals aged 18 to 34 years old are the largest age group in the United States and are projected to represent more than $200 billion in purchasing power in the next few years.
But not surprisingly given its size, the so-called Millennial generation is hardly a homogenous group and there are significant differences among Millennials when they are evaluated according to attributes like geography, ethnicity, education and income.
Despite this fact, many marketers have Millennial strategies which are clearly based on broad assumptions about 18 to 34 year-olds, and which fail to account for the diversity present in this group.
Putting data to use
To be sure, there is some value in looking at broad segments. For instance, large mainstream brands in particular need to ensure that their positioning is sensible across multiple segments.
But developing effective marketing strategies to reach consumers will increasingly require more refined segmentation.
The good news is that marketers have the opportunity to go deeper.
Ad intelligence provider Exponential, for instance, analyzed data associated with four million Millennials and used it to identify twelve segments, including The Underemployed, Boss Babes and Travel Enthusiasts.
Many brands, thanks to the data they collect and increasingly sophisticated and affordable data analysis tools, have plenty of opportunities to perform similar research to identify their own segments.
As they seek to learn from missed opportunities from Millennials and prepare themselves for the next generation of consumers, they would be wise to pursue these opportunities.
William Higham, Consumer Futurist, Speaker, Author and CEO at Next Big Thing will be giving the afternoon keynote on Digital Marketing and the Next Generation at our Future of Digital Marketing event on June 11 in London.