Here's a paradox of the modern media marketplace: The more irrelevant demographics seem to be, the more powerful they're getting.
Long the province of TV, many signs point to the inevitable death of the demo. Purchase-based and other behavioral targeting rules faster-growing digital media, particularly given the rise of real-time buying based on behavioral data. Meanwhile, a growing pile of studies combining purchase data with TV-viewership data make clear that demographics often have little to do with who buys what.
But don't write the obituary yet—at least when it comes to video. Nielsen and ComScore are finding a growing market in applying TV-style gross ratings points, based on demographics, to digital audiences. Disney's TV networks are now writing deals using Nielsen's demo-driven Online Campaign Ratings as the currency for TV and digital properties. And the Making Measurement Make Sense (3MS) coalition, backed by the advertising industry's leading trade groups, is pushing to standardize cross-platform measurements based on demographics.
Long among the biggest critics of demographics has been CBS Chief Research Officer David Poltrack, who notes that the prized 18-to-49 demo is well on its way to becoming a minority of the TV audience.
"Marketers can't say, "I'm going to continue to focus on a smaller and smaller percentage of my total market, especially when the people moving out of that demographic are at the peak of their earning power,'" Mr. Poltrack said.
In recent years he's commissioned studies by Nielsen Catalina Solutions, which matches shopper-card purchase data to Nielsen's TV-ratings panel, and the Nielsen Buyer Insights service that uses bank-, credit- and debit-card data to track just about everything else by the ratings panel buys. Those studies show age-sex demos are relatively poor ways of finding dog-food buyers or casual-dining customers.
Yet even he is far from predicting the demo will die.
"Most advertisers now are using much more complete analytics in their media buying and planning than age and sex," he said. But "for the transactional mechanics of the marketplace, you can't negotiate on 200 different criteria with 200 different advertisers. At some point you have to have a common currency."
Demographics may always be that currency for TV, he said. But he believes the purchase characteristics of TV audiences will increasingly drive pricing, regardless of the demographic guarantees in the deals.
At the same time, however, demographics increasingly drive pricing in online video—especially when they're the 18-to-34 "light TV viewership" demo, said Lauren Wiener, global president of sales and marketing at Tremor Video.
That's because marketers and agencies increasingly are using Nielsen's Online Campaign Ratings to buy online video to round out their TV buys, she said.
The rise of digital demo-buying comes despite recent Tremor Video research across more than a million users showing demographics have less impact on the engagement or purchase intent driven by online video than any other factor measured. Demos meant far less even than such factors as operating systems or browser type used.
For its part, Unilever has invested the past year in its own data-management platform and real-time bidding system in conjunction with WPP's MindShare. Yet it's also an avid user of Nielsen's OCR to use TV-style GRPs to buy online video.
"We're looking at all of it," said Rob Master, VP-North American and European Media for Unilever. "That's the beauty of the visibility we now have."
Nielsen, which has a monopoly on TV ratings and sells online campaign ratings, also sells research through its joint venture with Catalina that shows how demos are less predictive than shopper data of who will respond to ads.
"I imagine a future in which both metrics will co-exist," said John Burbank, president-strategic initiatives at Nielsen. "For many categories they are still quite predictive."