(By Bob McCurdy) When it comes to advertising, sometimes counterintuitive thinking might be the best thinking. Stations with high indices in Scarborough or other qualitative sources are usually preferred versus those with low indices.
This “low index is bad” mindset can result in advertisers leaving dollars on the table as the demographic, gender, or ethnic group with the lower index might be the more lucrative target, or at the very least be worthy of purchase consideration for several reasons:
First, those stations with the high index have listeners who are already disproportionately disposed to purchase the product or service, and as such might have a limited capacity to be able to purchase more, whereas those with the low index might be able to be enticed to purchase if “invited” to do so.
Second, an index not tied to an actual audience figure is relatively meaningless, as a station with an index of 85 and an audience of 200,000 would reach many thousands more potential customers than a station with an index of 110 and an audience of 100,000.
Third, when evaluating the revenue potential of non-users or light users, it is important to note the “time frame” in question. For instance, someone may not have patronized a sit-down restaurant in the past “month” but that doesn’t mean they never patronized a sit-down restaurant or, more importantly, won’t.
Let’s look at a couple of examples where counterintuitive thinking might actually make sense.
Check out the chart below. Conventional wisdom would dictate that the AutoNation dealership allocate considerably fewer marketing dollars toward reaching the Hispanic consumer due to such a low index (58).
While 14,706 Hispanic consumers would consider doing business with AutoNation — a meaningful figure according to Scarborough — they are 42% less likely to do so. It would thus be easy to conclude that the Hispanic consumer provides little upside to AutoNation in Tampa. Exercise some caution with that conclusion, however, as Scarborough also found that over 61,000 Hispanic consumers in Tampa are looking to purchase a new or used car in the next 12 months. Some additional marketing focus on Hispanic car buyers might actually go a long way toward increasing sales by effectively exposing this consumer segment to the AutoNation message.
Is it possible that those adults who have patronized a sit-down restaurant 0-2x in the past month are better prospects than those that patronized a sit-down restaurant 10+x? It is. There are 985,023 Adults (4x as many) who have eaten (or not) at a sit-down restaurant 0-2x in the past month, versus only 264,994 who’ve eaten at a sit-down restaurant 10+x. Here is where it is important to focus on the definition of the qualitative category in question. “None” means only “in the past month,” not “never,” so the 462,639 “none” adults are still solid prospects.
Where does the most upside sales potential lie, as shown in the chart below, getting the heaviest wine drinkers to drink more or encouraging the light or infrequent wine drinker to increase their intake and maybe even to get the non-wine drinker to consider it to give it a shot? Note, the “nevers” also have sales potential, as they don’t need to buy for themselves but could for a dinner party, as a gift, or purchase for a wine drinking spouse.
The heavy wine drinker accounts for only 7.6% of the population, with those imbibing less than once per month or once per month accounting for 26.7% of all wine drinkers. Factor in the “nevers” and it increases to 70.2% of the population.
I’ll go with the long tail in terms of upside sales potential versus simply focusing on the heavy wine drinkers.
A big part of continued growth for any business is identifying and communicating reasons to consumers who might not be familiar with a product or service (low indexing) versus continually preaching to the converted (high indexing). Those low-indexing stations, gender, or ethnicities could be a key to continued growth and prosperity. For those advertisers who think they already know “who” their customers are, the question should then become, “who else?”
The bottom line is that there are times when counterintuitive thinking can work to an advertiser’s advantage. There is more to identifying a target than simply index, the same goes for the heavy, light, or non-user. Effective marketing is a more nuanced practice with increased revenue going to the nuanced. No matter how thin the pancake there are always two sides to it, the same is true of qualitative data.
