There has been a lot of debate over the years over which is more important when it comes to creating custom/ideal audiences: psychographic or demographics. The simple answer is both are important tools in creating custom audiences, but they help you do different things.  

In this article, we are going to talk about how to leverage these two sets of data to make smart decisions about marketing.  

Let's start off with some basic definitions and then we'll get into how to use each.

Demographics

Demographic data is basically the physical or tangible data of a group of people.  Here at Brand Author, we call it the physical buying state of an ideal audience.  This can be location, behaviors, hobbies, whether or not your own a home, or have a pet, gender, your income level, or who you follow on FB.  

Psychographics

Psychographic data is basically the articulated belief groupings of people.  Here at Brand Author, we call it the emotional buying state of an ideal audience.  This can be attitudes about a topic or thought, it can be related to their aspirations, values, affinities, and hopes.  

Here's how they work together

Demographic data does a terrific job of qualifying someone for your brand.  For instance, if you sell dog food, you'd want to make sure the person you are spending marketing dollars to get in front of is actually a dog owner.  Similarly, if you own a restaurant, you'd want to make sure your marketing money is being weighted for a 5 to 7 mile radius from your physical location.

Demographic information can be very useful in narrowing the field from 8 billion humans to something more reasonable. But here's the thing, as the world changes, some demographic information is no longer useful and can actually harm society as a whole, so make sure you have a strong and clear DEI policy that is filtering for relevant markers only.

Another thing to point out is that demographic data alone is only half the story. Just because someone qualifies for your offer, doesn't mean they desire it.  That's where psychographic data comes in.  It puts context to demographic information and helps identify from a group who can buy your product to those who are likely to.  

The question you are probably asking right now is, "How do I know the desires, beliefs, and aspirations of people I've never met before?". The demographic information that tracks behavior is a great place to start. To that, you can add customer engagement records and market research (we'll have to dive deeper into these in another blog).

We use this psychographic insight to create expertly curated brand messaging that acts as a beacon to those who share our belief systems. By understanding where our ideal customers are, where they want to be, and why it matters so much to them to get there you can easily create marketing campaign creative and copy that speaks so directly to your audience it cuts through the noise of marketing.

Psychographic data is important because what we are all now learning through the study of neuroeconomics is that consumers break their "demographic boxes" all the time. In fact, it is the rule and not the exception that consumers will make purchases based on an alignment of values and ideals before logic and budget.  

As your brand grows, psychographic data will take a primary role and demographics will matter less and less. This is because when you are first starting out in business, you have a very small marketing budget and only one or two locations where you are selling. Demographic data helps you saturate smaller markets more efficiently and find your low hanging fruit. However, as you grow and say now have 50 franchise locations around the country and your brand becomes more of a household name you kinda blow the demographic box wide open. As your brand value increases you will adopt more aspirational and outlier customers. In fact, I just attended a panel where the CMO for one of the three largest banks in the country said they don't even look at demographics anymore because they have so thoroughly saturated the market.