Making Sense of the Census

Timing and privacy issues may reduce CRM value of census 2000

Do large, consumer-oriented enterprises have reason to cheer about the release of 2000 U.S. census data? News stories from the Wall Street Journal and Associated Press indicate that businesses are eagerly awaiting the information that the U.S. government culls decennially. They could have written the same story about the 1990 census - and essentially did. But things have changed a bit since then.

This is the age of one-to-one marketing. This is a time when consumer-oriented enterprises are supposedly striving to integrate realtime clickstream analysis with the vast knowledge of individual consumers that companies such as Acxiom Corp. and Claritas Inc. amass - so that intelligent systems can pitch products and services to consumers on the fly.

Census demographic data has traditionally been an essential tool in marketers' handbags, letting them spot trends, such as increasing occurrence of single-person households, or identify geographic targets for direct mail campaigns.

But this data now carries shunned marks of the old economy: lag time and imprecision. Information collected April 1, 2000, will slowly be released from April 2001 through February 2003. The least granular data will come out first. And, for privacy reasons, the Census Bureau will never release data at a more detailed level than that of the "block." It will also purposely "blur" data to foil any marketers' attempts at personally identifying any of it by comparing it to information already known about individual consumers.

"The census might tell you more older couples are having babies, but not who's going to need a stroller soon," said Charles Nicholls, general manager of the Ithena Analytic Applications division of e-BI vendor Business Objects. Nicholls added that census data is "good for spotting large and slow-moving demographic trends," but not much else of interest to marketers.

What place does U.S. census data have with marketing in a one-to-one marketing world?

Richard Tooker is senior vice president of the Database Marketing Group at DMW Worldwide, a direct marketing company, in Wayne, Penn. He said that 2000 census data will have a fairly negligible effect on customer relationship management (CRM), which is well established as essential to profitability. CRM has moved toward an ideal of profiling individual customers and prospects in order to retain valuable customers and identify poor customers who aren't worth keeping.

"CRM is all about the customer's existing relationship with the enterprise, including what the customer has already bought, what services are used, the frequency with which those products or services are purchased, how long the individual has been a customer, channel preference, what touch points the customer uses to initiate communications with the company, and what the customer is likely to want to do next," Tooker said. "These are all behaviors that have nothing to do with the census, and their importance outweighs census demographics by several orders of magnitude. Even in situations in which demographics are used, household-level data is far more predictive than census information."

Census data can't hurt, and marketers are likely to superimpose its geographic and demographic data onto other consumer data. However, the Internet's double-edged sword - growing quantities of consumer data coupled with growing competitiveness requiring more personalized and responsive interaction - has pushed businesses to find much better sources of information than what the government issues every 10 years.

Jeanette Burriesci