Advertising Revolution: Psychographics Are The New DemographicsGender, location, job, income – demographics help advertisers and product marketers to segment their audience.However, when having a look advertising efficiency you get the idea something might be a little off: In online advertising the average conversion rate is as little as 2-3%.
Why Demographics suck as a filter
Demographics are used as cues indicating consumer behavior. Women are said to be more emotional and sensitive to aesthetics, hence rely more on feelings in decision-making and respond to beauty better. Men on the other hand are hypothesized to be fact-driven. Or take income for example, which is used as an indicator for willingness to pay. However, even with a little salary you may be willing to spend a drastically high portion of your disposable income on just one item because it matters to you. Generally, modern psychology has proven most claims like those above misleading.
We all listen to our hearts
You probably think you’re a conscious decision maker in control of what you do. Now, research by Eagleman has shown measurable brain activity of subconscious deliberation up to one second before being aware of having considered an action. Another psychologist called Damasio researched decision making of people lacking a functional connection between rational and emotional thinking. While those people were fully capable of assessing choice options, they could just not come up with a decision. Emotions may thus be regarded as a necessary ingredient to both trigger and conclude human decisions.
Emotions play a crucial role in decision-making. They are expressions of our personality and mirror our values and beliefs without consciously thinking about them. Hence the personality of consumers is a crucial piece of the puzzle helping us to determine what consumers want. Psychology acknowledges a concept called “Big 5” as an elegant way to holistically assess personality. With the help of the components agreeableness, extroversion, conscientiousness, neuroticism and openness, it is possible to describe a person easily. For instance: A rather neurotic person may want to stay safe and avoid risk, an extrovert will look for excitement rather than security. And so forth.
The Future of Advertising
Now, this is a very important insight for advertisers who can take advantage of such psychographics. Let’s say you’re selling smartphones. If you’d know you’re selling to a person with neurotic personality traits, you’ll emphasize long battery life and security aspects. However when selling to an extrovert, you would emphasize leadership in design and uniqueness. Turns out, surprise!, a team of researchers from Toronto did just that and found out ads matching personality traits were better perceived than others. In particular, they reckon personality as a stronger predictor for ad-likability than demographics (!!!).
“BUT WAIT!” you may want to call after your customers – handing them a personality assessment questionnaire. Rest assured – Psychology and Marketing can help you with that. A 2010 study managed to reliably predict personality traits from Twitter feeds of users. Other, not yet facilitated methods may include personal sellers to drop conversation protocols in a CRM system, which later runs personality analysis for you. Besides vast Marketing opportunities, major ethical challenges revolving transparency lie ahead. But one is for sure: The journey is an exciting one!
Photo Credits: Wallpapers-Place.com
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