Behavioral Targeting: Coming to a PRIZM Near You

PRIZM targeting. We’ve all heard about it some time in our careers. Usually, people use the term loosely, dropping it casually into their vocabulary as if it were a word of the day. Most of the time it sounds like jargon media folks throw around more than anything else. Though it’s a familiar tool commonly utilized by direct mail marketers, PRIZM is still quite foreign to many of us who heavily align ourselves with digital media.

Through various meetings with sales reps and some personal research into behavioral targeting, I became fascinated with the PRIZM system and the amount of consumer insight it contains. Not only does it disclose the demographic traits (e.g., ethnicity, age range, education and employment level, income, etc.) of a particular segment, it also provides lifestyle characteristics, such as shopping and reading preferences and social and life-stage groups.

After glimpsing these consumer profiles, I started thinking about these attributes’ behavioral effects and their implications to consumers’ online habits and activities. Is PRIZM targeting useful for behavioral targeting?

More Than Meets the Eye

“PRIZM” stands for Potential Rating Index for Zip Markets. It provides marketers with a standardized set of characteristics (known as clusters) for each U.S. Zip Code. Each Zip Code is assigned one or more of 62 clusters, based on the area’s shared socioeconomic characteristics.

From census data, millions of purchase records, and customer surveys, Claritas (developer of PRIZM) integrates the information to create a sophisticated segmentation of geographically divided communities.

Whether it’s to learn about potential customers and their neighborhoods or to download targeted mailing lists based on specific consumer demographics, lifestyle data, and product preferences, marketers can discover their best targets using the sophisticated segmentation lens PRIZM offers.

A Geographical Perfect Match

Visit the “You Are Where You Live” portion of the Claritas site and enter a Zip Code. You’ll discover the top five clusters in that area.

After typing in 94107 for San Francisco, I learned, according to PRIZM, the most common segments in my neighborhood are #29 American Dreams (referring to the ethnically diverse residents); #16 Bohemian Mix (young, mobile, early adopter urbanites who represent the nation’s “most liberal lifestyles”); #31 Urban Achievers (college-educated and ethnically diverse up-and-coming immigrants from Asia, South America, and Europe); #59 Urban Elders (economically struggling segment located in the downtown neighborhoods of metros); and #4 Urban Digerati (highly educated, ethnically mixed, tech-savvy singles and couples in fashionable neighborhoods).

If online marketers can look past the uncanny cluster names and descriptions, they’ll realize the PRIZM database sheds important insights into consumer behaviors. This geo-based demography, as Poindexter’s VP of client services Ted Shergalis describes it, is a “predictive attribute for online marketing.”

With this type of background information on lifestyle, spending habits, and media preference, marketers can identify the geolocations (via IP geotargeting) and target their product to those most likely to buy.

What Does This Mean for Online Media?

The potential of combining the PRIZM and behavioral targeting databases may not be exempt from public legal scrutiny. If anything, we’ve all learned the lesson from the privacy crucible DoubleClick endured five years ago when it purchased a database in an attempt to link offline personally identifiable information with online surfing habits. Privacy will always be a sensitive concern for marketers and consumers alike.

During my research, I was glad to learn some behavioral vendors have remedied the privacy issue by simply incorporating cluster segmentation methodology without completely depending on it. Poindexter has worked with Claritas for three years and already integrated the PRIZM segmentation into its targeting and optimization system as an advanced marketing solution. Others, such as DRIVEpm and ValueClick, are implementing similar capabilities to boost their own targeting functionalities.

At the heart of behavioral targeting is a holistic understanding of consumer behaviors. Regardless of medium, information is still the key to understanding the market and consumers behaviors. If behavioral targeting is to fully deliver its promise of making advertising more relevant on the individual basis, incorporating PRIZM data seems a natural addition to the ever-changing behavioral kaleidoscope.