Consumer Profiling

How Companies use your Purchases to Target Ads to You

 

Like many innocuous terms, Consumer Profiling often gets a bad rap. Mostly because it can be misunderstood as a practice that involves companies “watching” consumers. Sounds creepy right? But let’s take a good look at this practice and once properly defined, it may not seem so negative.

 

 

 

So what is Consumer Profiling? According to about.com, consumer profiling is another name for psychographic data, and it’s defined as “a way of describing a consumer categorically so that they can be grouped for marketing and advertising purposes. It has been shown to be more profitable to target advertising to a specific market segment. As a short-hand way of talking about consumers, market segments are often represented by consumer profiles.”

 

In other words, consumer profiling is a way for businesses to determine your preferences based on your past purchases. Once determined, your profile is placed into tiered groups so that ads presented to you in the future are based on past purchases. Ideally as the consumer, you will find these ads interesting and want to purchase them again.

 

While the practice of consumer profiling is an excellent way for companies to gather consumer data and use it to create more meaningful ads, the truth of the matter is that your past data may not always reflect your future needs. A great example is Christmas. Millions of consumers prefer to cyber shop to choose the perfect holiday gift. Profiling based on these types of purchases however can mean future ads might be less meaningful to you personally.

 

One interesting feature about Consumer Profiling is the way that it changes with you. By tracking past purchases, profiling can adjust ads based on your most recent purchases and target future ads based on age and life-stage cycle. This cycle began when you landed your first job and has moved along with you throughout your adult life as you have increased your buying power. What you can afford when you are 29, working full time with no children is different than what you can afford when you are 41 with 3 children in school and sports. Your life-stage changes even if you aren’t aware that it does and your profile adjusts too.

 

While skincare purchases are generally made in person, the majority of consumers research products online before they buy. This research gets captured and as a result targeted ads and profiling are born. The important thing while shopping is to be comfortable with your purchase. Sometimes you may just need a one-on-one conversation with your esthetician to know for sure what’s best for you skin. 

 

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