7 minutes

Demographic Targeting is Irrelevant and Netflix Agrees

Marketers are overwhelmed with data.

A marketer’s biggest challenge has become sifting through the noise to find those actionable nuggets within a heap of rubbish. As Netflix’s VP of Product Innovation, Todd Yellin, said “There’s a mountain of data that we have at our disposal. That mountain is composed of two things. Garbage is 99 percent of that mountain. Gold is one percent…”

Limiting your scope of data allows you to narrow your search to discover those insight nuggets. Cutting out the abundant, and arguably irrelevant, amount of demographic data will do just that. Yellin continued, “Geography, age, and gender? We put that in the garbage heap. Where you live is not that important.”

Demographics don’t matter, interests do.

Netflix is a personalized content delivery platform that serves you the content that you want to see, to the best of its ability. They are working to achieve world domination in content distribution and succeeding at it. Forcing traditional insights to perform in a data-driven world is doomed to underperform, Netflix does not base content recommendations on how old you are, your gender, or even where you live. They base it off of your interests.                                                   

Stereotyping and making broad assumptions about what demographic target markets are interested in are useless to Netflix. While they don’t reveal details about their algorithm for competitive reasons,  they revealed to Fortune that “viewers are grouped into “clusters” almost exclusively by common taste, and their Netflix homepages highlight the relatively small slice of content that matches their taste profile.” A user may only see 40 selections on their homepage out of the thousands available. Using interest profiling means that a girl who lives in Mobile, Alabama may have the same interest profile as a grown man in Manchester, UK.

This concept is not unique to Netflix’s viewership. The idea that two people who exist in very different demographic segments can exist in the same interest-based segment is by no means shocking.

Demographics don’t tell the full story.

A well-defined target market is the key to successful marketing. To make meaningful connections with consumers, Marketers need to identify and understand ideal audience segments. You have heard this a thousand times before and it is still very true. I would argue that it is more important today than ever before.

Today, consumers are more informed and complex. Another statement you have heard regularly as of late. Once, there were certain expectations and pre-determined paths that people followed (i.e. women stayed home while men worked), whereas today, people are taking their own, individual path. The journeys taken by people today are diverse and unique.

If we know that people are different, unique, diverse, etc., why do we still heavily rely on demographics to describe our consumers? Consumers want to feel a connection with the brands they purchase from, so why are marketers limiting themselves and potentially harming valuable relationships with consumers?

Demographic targeting is damaging your brand.

Demographic targeting is mass marketing. If you are marketing to women aged 25-45 who live in the UK, this is mass marketing. You are ignoring the sub-segments that exist within your audience and targeting mass appeal.  This can be detrimental to your brand in today’s world.

For consumers to feel a connection to a brand, the brand needs to understand and resonate with the consumer. Let’s say you are a 23-year-old male just graduating university. You are served two separate ads on Instagram from competing sporting goods stores. One is advertising the latest and greatest in hockey equipment. The other has chosen to show you a beautiful image of the great outdoors. You don’t play or watch hockey, this ad was an interruption. Your hobbies include dabbling in nature photography. The ‘great outdoors’ retailer gained your attention through resonating with your interests. You never want to see an ad for hockey in your feed. The ‘hockey’ retailer ticked you off.

If the ‘hockey’ sporting goods store was using interest-based profiling, you never would have been served that ad. Instead, they assumed that any male within your age bracket, living around you, was likely to have an interest in hockey. While perhaps this is a good assumption and this ad ‘performs’ (most ad performance is based on vanity metrics, which are also irrelevant), how many people did they lose valuable relationships with along the way?

Why Demographics are irrelevant.

Brands that are succeeding in building meaningful relationships with their ideal consumers are those that are adopting personalization and diversifying their data-driven target profiles.

Dayna Sargen, NewsCred’s Brand Marketing Director, said in a recent post “the strongest marketers are those who can recognize greater patterns beyond just age-behavior correlations and can recognize larger patterns across their audience. Truly understanding these behavioral differences will open up a world of opportunity about how to effectively reach your audience.”

To Sargen’s point, the goal is to identify patterns within an audience. It is possible that the patterns include aspects of demographics but are not founded on them. For instance, when analyzing the audience of ‘Justin Bieber’, you can assume that a large majority of the people within that audience are young women. The thing to keep in mind is that not all young women like Justin Bieber AND not all young women who are ‘Beliebers’ share the same interests, there are sub-cultures within this segment.

What Matters Most is Interests, Not Age + Location.

Marketers are overrun with data sources and demands to tie efforts to ROI. It’s easy to rely on accessible data to build target profiles, it’s comfortable to rely on sources that you have always used. It’s also overwhelming to think of the ‘how’ when it comes to understanding interest-based targeting. How do you identify and understand ideal target segments through their interests and identify the overarching patterns to execute upon?

At Affinio, we take a different approach to understanding audiences. We are the first platform to pull advanced audience insights from the interest graph as opposed to the mention graph. By segmenting an audience based on interests (what they choose to follow) and the content they engage with, we are able to understand the cultural fingerprint of the interest-based communities within an audience.

“Unbreakable Kimmy Schmidt” is a Netflix Original Series. It is a Comedy with a broadway appeal. Using Affinio to analyze their audience, we are able to identify the overarching patterns. As you can see below, the interest-based clusters range from ‘Broadway Musical Fans’ and ‘Comedy + Drag’ to ‘Gamers’ and ‘Sports Fan’.

Affinoi_Netflix_KimmySchmidt.png

As marketers, we need to do a better job leveraging the data that is available to use today. The end game is reaching our ideal consumers and building meaningful connections. Cutting through the noise has never been more challenging. We need to drop the traditional methods that we’ve been forcing into a digital world. We need to arm ourselves with the right audience insight nuggets to better reach, engage, and build relationships with our ideal consumer.