When you place an ad or send a newsletter, you want to make sure the right people see it. Geodemographic methods will tell you where your customers are.
If you sell exclusively online, you may not care where your consumers physically reside, as technologists say. However, it is still possible through targeted mailings, leaflet distribution, local newspaper ads or billboards to get the attention of people who know nothing about you or your products.
Optimizing these approaches is the use of “geodemographic” information, which allows you to classify the type of people who live in a particular area. Source data almost certainly includes data from the National Census, which collects information on occupation, home and car ownership, marital status, number of children, and many other issues. In addition, the Land Registry collects data on home prices and sales; the Post Office registers new buildings; Ofcom has information on broadband connectivity, and so on. Data like this can be put together and used to create a summary of who lives where.
Always keep in mind that, for privacy reasons, this data is unlikely to be available for individual premises. Notably, census data is aggregated into what are known as “exit districts,” which are usually 121 households. In urban areas, this covers one or two adjacent roads — small enough to be useful for marketing.
There are a number of classification systems. Well-proven systems include Acorn by CACI and Mosaic by Experian. This article uses examples from Arc en Ciel’s Spectrum system, which is integrated into a comprehensive addressing and location system called AddressList.
The following is an analysis of the Spectrum system for the city of Ely.
The six major categories, known as ‘supergroups,’ give a broad categorization. For example, the ‘Affluent‘ supergroup covers the most affluent people. The percentage of people in professional and higher management occupations in Ely is well above the national average. These areas have some of the highest prices for housing and car ownership.
Each supergroup can be divided into several subgroups. For example, the “City” supergroup includes “Skilled,” where people work in professional and technological occupations; “Workers,” which includes young graduates and immigrant professionals (but not workers, who are part of the “Modest” supergroup); and “Students.”
One can see that Ely is a thriving neighborhood, with a quarter of its residents living comfortably. The largest group, more than a third of the total population, is made up of people in leadership or professional positions. The secluded category makes up about a fifth of the population and is probably mostly retired. There is a relatively small group of those in hardship, and there is no significant multi-ethnic population.
This analysis can be used directly for flyers, mailings, advertising, and so on.
The Spectrum software package includes Royal Mail address data and house location data from the Ordnance Survey. Google Maps are used to determine areas of interest. The figure below shows how the user outlined the area of London around Notting Hill and Westbourne Green with the mouse and ran Spectrum’s extraction for “rich” properties.
The red dots represent spaces that fall into this category, and the analysis allows marketers to identify their potential customers with high accuracy. Using the export feature, a spreadsheet can be created for use directly in a direct mailing.
Further analysis can, for example, show that the area around Latimer Road station in the northwest is mostly populated by people in difficulty.
Arc en Ciel originally commissioned Spectrum from the team that organized the data analysis for the 2011 Census. Important census data on housing prices were modified using sales prices from the Land Registry. They were used to adjust relative costs so that they were comparable across the country. Other open source data sets were also brought in to make the classification as complete as possible.