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ADVERTISING - July 1998

The New Targeting
Today’s advertisers are discovering the advantages of going directly to the source

copyklatsch.jpg (8241 bytes)Just a few years ago, three TV networks were so firmly in control of audiences that they could just stand there and wait for them. NBC, CBS and ABC were the only game in town.

Ad agencies actually had a media stratagem called "road-blocking," where they bought a spot on the big three at the same moment and merely by being there, snared 80 percent of households. It was a great buy.

But one day, the spit hit the fan. America’s TV audiences were suddenly splattered over a hundred different frequencies. It started with HBO and CNN and before you could blink, there were enough new special interest outlets to span the gamut from hangnail prevention to high school ping pong.

 

From broadcasting to narrowcasting

The game was forever changed. Now, instead of waiting with a net for all the usual suspects, marketers had to track them down. And instead of simple demographics such as age, income and gender, marketers had to search via the target’s interests, quirks, delights, ambitions, obligations, tastes, desires and even their chronic conditions.

As the search for particular prospects got more intense and much more expensive, marketers began to rely more and more on direct means of communication. Today, direct is the fastest growing segment of the advertising industry.

Direct offers the advertiser a pipeline to particular prospects, without the waste of dealing with those who don’t make the cut.

 

Drivers wanted, but not you, sir

Last year, when Lexus planned to offer expensive golf clubs for test drives in their new GS 300, they were able to keep unqualified prospects down to zero. They first targeted by zip code, then refined the list to incomes over $150,000, then to golf enthusiasts, which they purged to get Mercedes and BMW owners, which they refined to only those who had bought or leased their cars, new. At that point, they were pretty sure that the very expensive mailing, backed by personal phone calls, wouldn’t contain a single prospect who might be incapable of saying "yes."

And this was just a direct, snail-mail exercise. Imagine the precision possible at the next junction, when telephone, TV and computer are joined.

 

Tracking purchasing patterns

Things will be different even when you shop at your favorite supermarket. Once the scanner links your purchase with your credit or debit card, your pattern will be in the data bank. From then on, if you’ve been, say, a dog food buyer, your home TV will stop receiving cat food commercials.

This precision in targeting is also forging new tools for marketers to make brand-switching appeals. Take a customer who’s just bought a new Ford pick-up. This person has a three- to five-year period until he buys again. This gives GM, Toyota, and Daimler-Chrysler a wooing window in which to establish a conquest relationship. They’ll want to zero in on him, personally. Interactive, direct methods will be the way.

 

The 80/20 rule rules

In most product or service categories, the 80/20 rule applies and defines most marketing efforts. (This is where 80 percent of a brand’s business comes from a heavy-user cadre made up of 20 percent of its total customers.) And since it costs far less to keep an existing customer than to get a new one, an advertiser who ignores relationship marketing is probably wasting a large part of his budget. That’s probably a good reason for you (wherever you are) to become more adept and attuned to the ways and means of the new targeting.

 

Dennis Altman is an advertising consultant and UK professor of advertising and public relations.


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