February 24, 2009

Getting more bang for the brand's buck: Household or Individual?

Family influence on purchase decisions

Media planning has conventionally looked at target groups based on individuals; characteristics such as age, gender and SEC being used to segment the TV viewing individuals. Plans differentiated on these segments are expected to deliver campaigns aimed at catering to the needs of their respective brands. In line with this need, television audience panels are designed so that viewing differences between individuals across segments are captured as reliably as possible.

However,

While intuitively always recognized, social psychology is now delivering increasing scientific evidence that family and family members have a strong influence on an individual's purchase decisions. If this be the case, a brand's message on the TV screen must have something for others in the household too.

"The role that children play in making decisions concerning the entire family unit has prompted researchers to direct attention to the study of influence of children. The amount of influence exerted by children varies….For some products, they are active initiators, information seekers, and buyers; whereas for other product categories, they influence purchases made by the parents."1

"Academics need to adjust their existing beliefs about family decisions, given the impact technology is having on knowledge patterns. Marketers [ ] must be cognizant of the increasing power of youth in family purchase decisions as technology changes knowledge structures…Most observers accept that the youth market is large and growing in its own right. It also seems possible, though, that many young consumers will have even more importance than previously considered because of their increasing influence within their family group."2

"The impetus for this research emanates from the fact that a number of family decision-making studies have recognized joint decision between husband and wife…. The results show that strong cohesive families make more joint decision on furniture and vacation… Similarly, modern families make more joint decision on furniture, and vacation than traditional families. These outcomes to a very large extent do not depend on joint usage of the product.."3

The above excerpts suggest that family members, whether they be children, youth or adults, do exert varied levels of influence in purchase decisions. The child may fancy a particular color for a new car, the teen may bring in more information on the latest technologies and the spouse may bring in the affordability perspective. All together, this is well how the new car will come home.

Need for re-looking the media plans

Against such evidence, for how long would it remain tenable to design media plans based on individuals alone? How effectively can a brand's message be carried if media plans do not also target the influencers around the actual buyer? Is there a need to influence others in the household as well?

These questions are also merited by other trends in the television and advertising space:

Using household level viewership data

The availability of Households – in addition to individuals - as an analysis criteria unique to aMap's TV audience measurement panel has the promise of addressing issues in the aforesaid discussion. While designing a media plan, households can be selected (just as for individuals) on the basis of geography or SEC. The aMap panel also uniquely makes available criteria such as language, durable ownership and occupation as additional criteria to select target households.

How does this change life for the stakeholders in the brand building process – the brand manager, copy writer and the media planner? Two examples illustrate the possibilities. The first demonstrates how bringing in life style indicators could change program selection in a media plan.

Top 10 programs for all audiences (CS4+) versus those for owners of certain durables

It is evident that bringing in lifestyle indicators does change the conclusions that we draw on the top program preferences of the audiences. For example, Saat Phere, makes it to the top amongst the more prosperous households owning a variety of appliances; its position is exactly the reverse when the entire universe of 4+ individuals is taken into consideration.

The second example takes a more direct look at the differences in program selection that arise when households, rather than individuals, are used as TGs.

In conjunction with characteristics such as durable ownership or occupation, Households can indeed be a powerful basis for designing media plans for many widely advertised product categories.

It may be argued that using household data might force choices based on a smaller sample size. This may actually not be the case. Given the dominant share of nuclear households amongst all, a sample size of, say, adult males, will mostly mirror the sample size based on households since nuclear households are most likely to have only one adult male only.

It may also be argued that plans based on households may lead to program selection where the actual user may not be a viewer at all. This, in one sense is not true and in other, if true easily addressable. To the extent that individuals' purchase decisions are not “100%” theirs, targeting a program selection where they are viewers 100% of the time could be an overly restrictive consideration. On the other hand, the information on viewing preferences of individuals can additionally always be used to identify glaring omissions and commissions in plans developed using household data. Eventually, the selection would have to be backed by research that has identified influencers in a product's purchase decision.

Implications for advertisers

While the good news is that in many cases program rankings do not change completely if the criteria is changed from individual to household, the picture does look different if we go beyond the top few. Put differently, when choices have to be made for campaigns that will run deep in their channel / program selection or when the top choices may be unaffordable, evaluating TV advertising space based on household rather than individual ratings could well have a significant impact on campaign costs. That TV properties at the lower end may be disproportionately lower priced further accentuates the possible differences.

Given increasing audience fragmentation and in today's recessionary times, that may well be the difference between advertising and smart advertising.

1 Children in family purchase decision making in India and the west: a review; Pavleen Kaur & Raghbir Singh, Academy of Marketing Science Review Volume 2006 – No. 8

2 Internet-enabled youth and power in family decisions; Marshall, Roger & Reday, Peter Alan; Young Consumers: Insight and Ideas for Responsible Marketers , Volume 8, Number 3, 2007 , pp. 177-183(7); Emerald Group Publishing Limited

3 Evaluating the impact of power and cohesion-based families, and joint usage of product on joint purchase decision by spouses: a dual product analysis; Nelson Oly Ndubisi, Monash University Malaysia, Allied Academies International Conference

About aMap

Founded in 2004, Audience Measurement Analytics Ltd. (aMap) is India’s only and the world’s largest overnight television audience measurement system. With the latest technology and system driven procedures for collecting and disseminating reliable and quality data, aMap's panel of TV viewing households covers towns with 1 Lakh+ population spread all over the country. Markets reported by aMap include those uniquely covered by it such as Jammu, Guwahati, Bihar and Jharkhand. aMap publishes audience measurement data on an overnight basis which is the norm in many countries the world over.

This periodical is mailed to its subscribers. If you have received this as a forward, then for your own copy please write to contact@audiencemap.com. If you wish to unsubscribe from this mailer, please mail contact@audiencemap.com with "unsubscribe" as the subject.

For further information on aMap Products and Services, please call us at: Mumbai +91- 22 - 24988341, 24981578