How Consumer Life Stages Should Drive Marketing

When consumers go through major life events – graduating from college, getting a first job, getting married, moving, having a baby – shopping habits can change if they are engaged by a clever marketer. As New York Times observed, “a precisely timed advertisement, sent to a recent divorcee or new homebuyer, can change someone’s shopping patterns for years.”

Targeting consumers with the right message just as a new life stage begins is incredibly valuable. For example, new parents will spend $720 per year on baby clothes, $550 in diapers, and $1,260 in formula. And according to a 2011 United States Department of Agriculture survey, families with just one child under the age of two spend up to $15,460 a year on them—and $17,000 on teens. That translates into big money for retailers.

Identify and Target Life Stages

We know that life-stage targeting has long-term effects on consumers, so the question to ask is: can marketers use life-stage targeting to reach consumers online? Yes, but constructing accurate life stage segments demands two essential requirements: declared demographic data and massive volumes of shopping intent data. Here’s why:

Intent data and In-market signals alone won’t indicate a life stage. For instance, consumers who buy Google strollers are likely to be parents, but that is in no way a given. They may be grandparents, or even office managers tasked with ordering a baby shower gift for a coworker. In-market is often short term; life-stage isn’t.

How then do you distinguish between in-market and a life stage? The first thing you need is a robust set of declared demographic data to serve as a truth set. Shopping surveys, presented at key points throughout the online retail ecosystem, are excellent vehicles to collect age, gender, income, education, ethnicity, family composition – all sorts of demographic data from tens of millions of consumers.

Secondly, you need accurate shopping-intent data so you can detect purchasing patterns. Here’s where scale is critically important. A new parent may switch to safer cleaning supplies, which is very relevant insight to a CPG marketer, but on an individual level, that signal is lost. But if you analyze billions of shopping data signals a month, you get a lot closer to the truth. Some ecommerce companies already collect much of this information from hundreds of millions of shoppers.

The magic happens when you join both data assets together. Data scientists can use statistical analysis to reveal life stage segments based on shopping patterns and validate them with demographic data. That analysis can help marketers flag new moms who pay more attention to certain CPG product categories—like baby wipes—and are receptive to new messages from relevant brands.

At Connexity, we’ve observed that consumers who say they’re recent grads in surveys go on to purchase small appliances, bedding and work clothes. They’re quite different from first-time homebuyers who also buy plenty of appliances, but already have bedding and clothes. On the surface they may look similar since they’re both buying stuff for the home, but they’re not the same. The value of life-stage targeting is that it enables marketers to target new grads in a different way than those first time homeowners.

Timed Advertising via Programmatic Marketing

When you’ve identified when consumers are at critical life stage changes – along with the products they’re likely to buy – the final step is to deliver ads at the right time to change their shopping patterns.

Include retail signals with the demographic information, deliver it programmatically and you scale for success. Demand-side platforms (DSPs) purchase campaign inventory via real-time auctions – one impression at a time. Purchasing decisions are based on the unique combination of user data, page, and campaign attributes. In other words it asks: Is this consumer a new parent, is this a site that delivers conversions, how many times have they seen my ad, and so on.

All of the pieces for intent-based life stage targeting are falling into place, precisely as millions of Baby Boomers and Millennials are expected to move through significant life stages. My guess is that life-stage targeting will soon be the new buzzword of programmatic marketing, after all, there’s a lot of consumer money at stake.

Paul Martecchini is vice president of marketing of Connexity.