Quantifying the target market for advertisers

Abstract

Abstract Marketers who want to protect their brand's share or grow it need to know who to reach and nudge with advertising. This paper uses continuous household panel data for 55 leading, advertised brands in 12 CPG categories to quantify their target market over different time frames and conditions (market type, brand size and dynamism). Results demonstrate that the customer base (brand penetration) must swell dramatically over time to maintain, let alone grow, market share. For stable brands, penetration typically doubles from its level in one quarter to a year, then again from 1 to 5 years as brands continue to attract lighter buyers who underpin long run sales. Over 5 years, over a third of brand buyers are so light that they buy the brand just once, but such buyers are vital to sales and critical to growth. As well as quantifying the 5‐year target audience for brands across these conditions, we test the predictive accuracy of the NBD‐Dirichlet as a benchmark. The implications for advertising and media strategy are detailed. The long‐term lessons for targeting become clear—unless brands “target the market”, they have adopted a counter growth strategy.

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