What Is Demographics? Definition, Usage, Examples in Advertising

Collage of business people's faces in crystal ball
Collage of business people's faces in crystal ball. John M Lund Photography Inc./Getty Images

Demographics is the analysis of the characteristics of populations and subsets of populations, such as age, race, and gender. Now considered a necessity in the advertising industry, demographics helps businesses identify those consumers most likely to buy their products or services. For both businesses and consumers, it is important to understand the elements and application of demographics-based target advertising.

Key Takeaways: Demographics in Advertising

  • Demographics is the collection and analysis of general characteristics about groups of people and populations, such as age, gender, and income.
  • Demographic data is used by businesses to develop marketing strategies and advertising campaigns, and for responding to changes in consumer demand.
  • Demographic data is gathered from sources such as the government, private research firms, broadcast media, internet websites, and consumer surveys.
  • Today, businesses often combine demographic research with psychographic research to create more effective advertising strategies. 

Demographics Definition

In advertising, demographics are the key to creating targeted marketing campaigns that appeal to specific groups of consumers. For example, Southwest Airlines, which prides itself as being a basic low-fare carrier with frequent direct flights to many locations, targets its advertising toward middle-class families, small business owners, people who typically take short trips, and young adults. Conversely, United Airlines, which charges higher fares in return for more passenger “frills,” targets people with college degrees, work full time, and have household incomes of at least $50,000.

In most cases, businesses find demographics-based targeted advertising strategies more cost-effective than “shotgun-style” mass marketing efforts while resulting in increased sales and brand awareness.

Faced with the ever-increasing cost of consumer marketing, businesses increasingly rely on demographics to identify the best possible target audiences for their adverting campaigns. Since the size and preferences of different demographic groups change over time, it is also important for companies to identify demographic trends. For example, companies use demographics to anticipate the needs of the aging U.S. population. As people grow older, they tend to spend more on health care products and services, and the method and tone of advertising to these older customers is very different from that of younger consumers.

Demographic Factors

Traditionally, demographics provides consumer information based on factors that can include, but are not limited to:

  • Age and generation groups
  • Sex, gender or sexual orientation
  • Nationality Race Educational level
  • Occupation
  • Household income
  • Marital status
  • Number of children
  • Homeownership (own or rent)
  • Place of residence
  • Health and disability status
  • Political affiliation or preference
  • Religious affiliation or preference

In number and scope of the factors used in demography—the collection, analysis, and use of demographics—can vary widely depending on the type of research being done. Besides advertising and marketing, demographics are also used in politics, sociology, and cultural purposes.

Sources of Demographic Data

Advertisers get demographic information from a variety of sources, including the U.S. Census, private research “think tanks,” marketing firms, and the media. In today’s world of instantaneous information, demographics have become a valuable commercial commodity.

Television and radio stations pay research companies like the Nielsen Company and Arbitron to collect detailed and up-to-date demographic data about their viewers and listeners. Magazines and larger newspapers supply demographic data about their readers to potential advertising buyers. In social media—the internet—valuable consumer information is collected from individuals willing to accept “cookies” on the websites they visit. 

How Audience Demographics Work in Advertising

Demographic change as a large group of people as a changing diversity in a population.
Demographic change as a large group of people as a changing diversity in a population. iStock/Getty Images Plus

Virtually all advertising campaigns begin by identifying the ideal target audience. Once all of the demographic data about the consumers of a specific product or service have been compiled, it is used to formulate a “creative brief,” an essential document describing the target audience and how to best communicate with it. In identifying ideal target audiences, advertising firms tend to take one of three approaches.

The Specific Person

Considered the best approach, enough demographic data are collected to develop a very specific target audience character. For example, a high-end brand of wristwatch might appeal to a married 45-year-old man with a master’s degree, and a neatly-trimmed beard, who works as an investment banker, drives a Mercedes convertible, collects classical music, and takes golfing vacations in Europe in his spare time.

The More General Audience

Though considered acceptable, adverting campaigns targeting general audiences are less likely to succeed because of the difficulty in getting the message about the product across to a broader spectrum of the population. For instance, specifying all people ages 20 to 45, with jobs, own a car or truck, and like sports requires communicating with far too many people. As a result, advertising campaigns to general audiences often suffer from becoming too generic in their tone.

Everyone Is Our Customer

Advertising campaigns that try to reach a target audience of “everyone” are rare and doomed to fail. Still, advertising companies occasionally try to reach almost everyone by targeting primary and secondary audiences. For example, an actual ill-fated advertising campaign for a major frozen food chain targeted a primary audience of men and women ages 18 to 49 with low to middle incomes who buy groceries, along with a secondary audience of anyone ages 8 to 80 of any income level who shop in grocery stores.

The most successful campaigns are those that have identified every possible demographic detail about their potential customers. Trying to reach a too wide or generic audience is usually a fatal error.

Misinterpreting demographics can also lead to failure. For example, Proctor & Gamble initially failed to sell its Swifter line of floor mops in Italy because its advertising targeted women who wanted convenient cleaning products. When P&G figured out that Italians wanted cleaning power, it modified its advertising, thus making the Swifter a huge success. 

How to Determine a Target Demographic

With enough demographic data in hand, advertising firms employ several types of research methodologies in determining the ideal target audience. A few of these include:

Pre-campaign Research

Usually conducted through conventional or online surveys, pre-campaign research is used to uncover different, sometimes unexpected potential customer groups.

Now easily set up and conducted using internet services like Survey Monkey, online surveys have become one of the most commonly used tools of market research. By allowing advertisers to determine the preferences of potentially millions of consumers without the need for in-person contact, surveys are a very cost-effective method of market research.

Focus Groups

A key part of pre-market product appeal research, focus groups are small but demographically diverse groups of consumers assembled to discuss a particular product before it is launched. By allowing the participants to physically handle and use the new products and offer their feedback about them, focus groups are often combined with demographics in designing advertising campaigns.

However, while focus groups can help determine how products might be improved, they can also prove harmful to the advertising campaign. They may include too small a segment of the chosen demographic group to get an adequate response, and they may be swayed by the group’s moderator or by an overly aggressive group member. 

Psychographic Research

Despite its unchallenged power as an advertising tool, demographics alone has its limitations. While demographics expose who is likely to buy a product, it does not explain why certain consumers prefer one product over others. To understand what subtle internal, rather than obvious external factors, like age and gender, motivate consumers, advertisers often combine demographic research with psychographic research to produce sensory marketing campaigns. Psychographic research strives to reveal what beliefs, feelings, thoughts, biases, and other psychological factors motivate consumers.

For example, the Pepsi-Cola Company was experiencing slow sales of its newly acquired Mountain Dew brand soda because people viewed it as a product consumed mainly by low-income individuals living in the rural South. In simple terms, Mountain Dew was not considered “hip,” a psychological factor not considered by traditional demographics. In response, PepsiCo launched a new Mountain Dew advertising campaign targeting people ages 18 to 24 in urban areas. Ads featuring skateboarding star Paul Rodriguez and hip-hop artist Lil’ Wayne aired in major cities nationwide, implying that popular young athletes and musicians preferred Mountain Dew. With its new “rock star” image, sales of Mountain Dew soon increased. 

Sources and Further Reference

  • “Demographics.” AdAge, September 15, 2003, https://adage.com/article/adage-encyclopedia/demographics/98434.
  • “Demographic Targeting.” Know Online Advertising, http://www.knowonlineadvertising.com/targeting/demographic-targeting/.
  • Boykin, George. “Demographics in Advertising Strategies.” AZcentral, https://yourbusiness.azcentral.com/demographics-advertising-strategies-4309.html.
  • Meredith, Alisa. “How to Use Psychographics in Your Marketing: A Beginner's Guide.” HubSpot, https://blog.hubspot.com/insiders/marketing-psychographics.