Purchasing Power – a Relevant Indicator for Media Planning?
GfK (Growth from Knowledge) Purchasing Power is defined as the sum of all net incomes of the population, taking into account their place of residence. In addition to net income from self-employment and salaried work, capital income and government transfer payments such as unemployment benefits, child benefits, and pensions are also added to the purchasing power. From this disposable income, all a consumer’s expenses such as living costs, insurance, rent and additional costs like gas or electricity, clothing, etc., are covered.
What Role Do Criteria Like Purchasing Power Play for Media Planners?
Media planners use Geomarketing knowledge to target defined target groups as accurately as possible. Information about purchasing power in certain regions can play an important role in media planning. What good is it if a branch of a retail chain in Essen presents its premium product in areas with lower-income regions? As a media planner or marketing decision-maker, you must know where high purchasing power or a strong income structure exists, and where placing advertising measures seems particularly lucrative. With this target group-specific information, advertising measures are profitably planned, and potential buyers are precisely reached. Instead of applying a scattergun approach and placing your advertising measures in all directions to increase sales, offer your premium products only where purchasing power is correspondingly high.
Purchasing Power as a Criterion for Media Planning
When planning and targeting advertising campaigns to specific groups, purchasing power is often used as a criterion in media planning. Purchasing power is frequently applied in the following media:
- Outdoor media such as large-scale posters, MegaLights, etc.
- Digital outdoor and indoor media such as info screens, video malls, etc.
- Ambient media
- Household marketing
- Supplement marketing in regional newspapers (targeting high-purchasing-power regions, sometimes by routes)
Example for the Purchasing Power Index:
To demonstrate the purchasing power of a region in relation to the national average, purchasing power is represented as an index value. The national average is set at 100. If a region has, for example, 30% higher purchasing power than the national average, its purchasing power index would be 130. When it comes to media planning for a premium product, it is the media planner’s task to select areas with high purchasing power.
In selective distribution of inserts in Essen to one- or two-family houses, all households with a purchasing power > 121.5% are reached. The purchasing power index for the city of Essen is 99.9% compared to the nationwide average. In this case, only households with at least 21% higher purchasing power than the Essen average would be considered for distribution.
Your Contact Person for Purchasing Power and the Purchasing Power Index
As a media agency, we see our role in boosting the businesses of our clients. On our website, you can find various case studies. In one case study, we use our regional geomarketing knowledge and incorporate purchasing power information into our media considerations. This allows us to offer individual, tailored marketing packages to each retailer. These measures contribute to increasing sales and acquiring new customers for specialist retailers. Would you like to know more? Then speak with Heike Oeckinghaus (oeckinghaus@trebbau.com, Tel.: 0221/37646 – 391).