Study: advertisers lose out by ignoring "identity-based marketing"

07 Nov 2018  |  Michaela Jefferson 
Study: advertisers lose out by ignoring "identity-based marketing"

Magnetic, the consumer magazine marketing body, has today released the full findings of its research with Enders Analysis into the "passion pound" following the sneak peek Mediatel published earlier this year.

According to the study, average household spending on identity categories rose from 47% of discretionary spending (household spending minus housing, fuel and power expenses) in 2012, to 52% in 2017 - an extra £50 per household per week, or £2,642 a year.

"Identity categories" covers spend on hobbies and passions, including fashion, travel, sport, gardening and pets.

Meanwhile, consumer spend on other categories has flatlined.

Furthermore, Magnetic's research states that more than half of Brits never feel guilt towards passion-related spends.

However, although the study suggests that consumers are willing to dedicate increasingly large portions of their income to their personal interests, ad spend has failed to follow the same trajectory.

Whilst consumer spend grew 14% in identity categories between 2015 and 2017, advertising spend in those categories grew just 2% - despite an increase in overall ad spend of 12% in the same period.

The worst affected sectors include fashion, which saw an 11% drop in ad spend despite a 10% growth in average household spend, and cars, which saw ad spend fall 1% despite a growth in consumer spend of 24%. (See graph below).

“The shift in spending - away from brand media to online direct response channels - explains the decline in spend on identity categories and is directly related to the problem of short-termism in the advertising industry," said Douglas McCabe, CEO of Enders.

"In this part of the market, identity is understood as a set of individualistic, rather than social, identifiers and attributes - a clear missed opportunity. Taking advantage means understanding which media allow marketers to reach customers as members of identity groups, rather than just as a target demographic."

According to McCabe, magazine media offers the "[most] natural fit with identity-based marketing", whilst media low in social identity includes out-of-home, most social media in-feed ads, direct mail, and search.

Sue Todd, CEO of Magnetic, added that advertisers who have yet to catch up are both "neglecting" long-term focused brand campaigns and "missing opportunities to use the power of media context to help build brands in these growing identity categories."

"Ultimately, it’s all about the context in which we receive messages. When people pick up a magazine on food, fashion or film, they are far more likely to pay attention to the advertising and take action," she said.

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10 Dec 2018 

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