How Current Household Geo-Demography Can Help With Site Location
In a world where innovations in information and
technology occur almost daily, it is interesting to observe where the
most significant advances in the application of information and
technology occur. In recent years spatial technology has evolved so
that anyone with a personal computer and access to the Web can, with
only a few mouse clicks, "see" almost any place on earth.
By contrast, however, access to data which accurately describe the
populations of these locations has lagged significantly. For those
involved in the business of location analysis, this scenario is
frustrating. Why? Because while in the U.S. and elsewhere, vast
repositories of consumer data exist, the information is virtually
unusable with current geographic analysis tools. It is like having a
microscope without a specimen to
Again the question, why? First, relating population and demographics to
the physical geographies containing those populations is not as easy as
it may seem. Consider the fact that over 300 million people,
representing over 120 million households, live in the United States.
Adding to this complexity, experts estimate that over 20%, or roughly
24 million, of these households move every year. That's a lot of moving
Second, even if companies keep up with the sheer mass, determining
exactly where people live presents challenges. Most people consider a
mailing address to be the physical identifier for where people live.
But this fundamental assumption can be misleading because mailing
addresses, while almost always deliverable by a mail carrier, can't
always be used to identify the physical location for the household due
to limitations of the technologies that translate addresses into
locations. In order to create latitude and longitude, these
technologies only work with already recognizable addresses. Depending
on the area, results often yield an approximation of the address, which
can be a great distance from the actual location of the household.
The most widely used sources of data in location analysis are the U.S.
Census databases and products built using Census data. These databases
and products provide households, populations, demographics and an array
of other variables that form the baseline for describing the population
for an area. Understanding the base population is the cornerstone for
any location-based analysis. The breadth and depth of its coverage,
consistency in the compilation processes, cost and availability make
Census data an extremely powerful data asset. However, Census data and
estimates constructed from Census data also have significant
It's no secret to those who use Census data that the primary
disadvantage lies in the age of the data. Produced once every decade,
with only annual estimates in between, Census data do not reflect the
dramatic changes in population that occur across the U.S.
In contrast, marketing departments have long recognized the power of
household level data. As a result, those marketers license national
consumer demographic databases to understand their customers and
prospective customers. These databases contain very current and very
accurate demographics for virtually every household in the U.S.
Using current technology, most companies can meet the challenge of
slicing these data into smaller chunks to focus on more targeted
marketing solutions. However, finding data that provide accuracy and
precision, and that can also be compared with historic Census data has
been a challenge. Most products built to provide population and
demographics begin as summarized data at levels of macro-geography such
as county or ZIP Code. When used as directional data, these products
give researchers a sense of whether an area is growing, shrinking or
stable. Savvy marketers know that, based on the aforementioned
fluctuation of population throughout the U.S., the goal is to evaluate
growth or demographic characteristics for much smaller areas; these
products paint the landscape with a very broad brush.
While many believe the market interest in household-level data will
grow, there is a challenge using this type of data in geographic-based
applications. The ability to relate 120+ million addresses to the
physical geographies of those households is not a trivial task.
Integrating household level data into geospatial analysis tools and
relating the results to historic Census data can yield results that do
not portray an accurate number or distribution of households and
population. In some cases, these differences can be grossly inaccurate.
So, what are these companies missing when they ask, "Where is the best
location for my business?" They don't have a solution that combines the
best that Census data have to offer with the most complete and current
population and demographic information available, combined in a single
dataset. Such a dataset can provide valuable data to research, site
location, and marketing departments.
To illustrate the current problems involved in gathering and working
with location analysis data, let's look at a scenario of a day in the
life of a typical research analyst. The analyst, Sarah Peacock, works
for a major retail chain. In addition to her pure research workload,
Sarah is also responsible for locating, acquiring, testing and
integrating dozens of databases used by her company to understand the
differences in populations that make up its trade areas. Sarah's job
involves analyzing data that describe what occurred in the past and
what is happening in the present, and then predict the future
performance of current locations to help model and identify new
locations. Itâs a critical job, but itâs often made more difficult
because the data she needs are rarely compatible and require extensive
work before they can be used. These critical differences help Sarah
interpret the performance of retail locations.
web-based mapping, location analysts can access current geo-demographic
data at the Census block level. In addition to recent population change
and ethnic data, mapping tools like Magnify offer access to Acxiom
PersonicX, a lifestage clustering system which is founded on household
level demographics. (Click for larger image)
The demand for more recent and accurate data in location analysis is
fueling the development of next generation data products known as
Household Geo- Demographic products. The new products deliver powerful
insights into base populations, customers and prospective customers.
Not only do they provide the benefits of household demographics, they
also provide a "bridge" to include the longitudinal context needed for
their use in trending applications which include historic Census data.
These data products are also available in standard geographies, making
them usable in GIS systems.
Household Geo-Demographic data products offer significant advantages to
companies that demand the most current, accurate and precise population
and demographic data. These new data deliver new levels of precision
just in time to fuel the latest advances in location intelligence