There are two methods to determine where you should advertise. There is the traditional 'demographic matching method' and there is the more recent 'direct matching method'. Direct matching takes a little more work, at least the first time, but it results in dramatic improvement in efficiency and effectiveness of your advertising effort.
Direct Matching:
Direct Matching works as follows: present surveys with lists of TV programs, radio stations and programs, and/or magazines to samples of current and/or potential customers, and ask them to check off programs and publications they listen to or read frequently. In this manner you can identify precisely the marketing communication channels that most efficiently reach your current customers, competitors' customers, or non-users who may be potential future buyers.
You can save a lot of money by using direct matching. I did a direct matching project for a U.S. franchising company, Dial One, in 1993. Homeowners in need of home repair services, security systems, swimming pools and such were the target audience. I found that in New Orleans 1% of homeowners could be reached weekly for an average cost of $24.73 across the 27 different TV programs the company had advertised on the year before; but the cost of reaching 1% of homeowners ranged from $6.94 on Channel 8 news programs between 6 and 7 am to $42.37 on the television program COPS at 6:30 pm. Obviously huge savings are possible by investigating media consumption specifically for your target market.
"Direct Matching" is what we call the above described media selection technique where you ask current and potential customers about their media consumption. The traditional approach is referred to as "Demographic Matching".
Demographic Matching
Demographic matching involves two steps. First you identify your customers' gender, age, income, and education. You come up with a description of your market target as "men between the ages of 30 and 45" because your research shows you that 80% of your customers are indeed men between the ages of 30 and 45.
Second, with the help of your advertising agency, using television program ratings in the case of TV advertising, you identify say ten programs that most economically show your advertisement to "men between the ages of 30 and 45". On these ten programs you then decide you will advertise. Now suppose each of these programs is watched by about 10% of men between the ages of 30 and 45. If you buy 10 advertisements on each program, each man will have seen your ad ten times, provided there is no overlap of audiences between the ten programs.
But there is always overlap. How much overlap? How often are you advertising on different programs, but always to the same small group of men? In the study for Dial One I found that about 10% of the target audience had watched about 50% of all advertising the company had run during the previous year, and another 20% had watched another 40% of all advertisements: 70% of the audience had hardly been reached at all. Overlap was very high and this may well be why the TV industry has no desire to tell you about it. Overlap causes waste when we advertise to the same man (probably a man without a job and without money) over and over again. Avoiding such waste is an important benefit of Direct Matching, especially for companies with high market share who advertise in many different places.
But there is another important benefit, especially for small companies. In a Direct Matching study for a pharmaceutical products company in China I encountered an example of this second important benefit of direct matching over demographic matching. While purchasers of the product we studied were mostly women between ages 25 and 35, that did not mean that all women between 25 and 35 used the product. Only about 4% of women used the product we studied (and even fewer used the brand of the company I worked for).
We did a survey of women asking about their purchases of different products and about magazines they read such as "Modern Family", etc. We found that for some magazines 10% of the readers used the product, for other magazines it was around 1%. Obviously, this was very important information to decide where to advertise and what message to put in the advertisement. It is not exaggerated to say in this case, of such a small product, that direct matching could improve the efficiency of the advertising by a factor 10.
We all know that even people in the same age group, even with the same education, even with the same income, will still be very different from one another and will still use very different products and read different magazines. If we know this simple truth we should act upon it and measure who uses our products and brands, and who does not, and ask those who use or not use about what they read, watch, and listen to. Then we can capture the second major benefit of Direct Matching: putting the right message in the right place in front of the right people.
