The Myth of Targeting Loyal, Niche Audiences

Summary

With unlimited consumer choices in the digital marketplace, advertisers often turn away from websites with mass appeal and toward niche outlets, for their small, but potentially loyal audiences. Such a strategy is actually unwise, diminishing reach, according to evidence from a study analyzing double-jeopardy effects in digital media usage.

The premise of targeting small, but loyal niche audiences is based on the belief that people can easily find content aligned with their interests, and no longer are forced to consume popular products. That premise aligns with long-tail theory—that “given unlimited consumer choice, the market share of niche products thus should increase, as demand for ‘hits’ or popular products, diminishes,” author Harsh Taneja wrote, citing an earlier study (Anderson, 2006). But it also refutes the law of double jeopardy, where, with few exceptions, brands with lower market share have far fewer buyers, who are also less loyal than buyers of popular products (McPhee, 1963)

“Double-jeopardy effects were much stronger in the head rather than the tail, or in other words, stronger among popular” websites, the study found.

Among the implications of this research, newly published in the September issue of JAR:

• “The theory of double jeopardy … predicts that small audiences are generally disloyal and proposes that to grow engagement, brands need to grow their reach.”
• For media planners, advertising on popular websites “should enable advertisers not only to build reach but also to achieve frequency…. Unless campaigns aim for an exceptionally high frequency, niche websites are not recommended.”
• For media brands (website owners trying to grow their audiences or attract advertisers), “it is imperative to direct one’s marketing effort at growing reach if one has to grow loyalty, both in terms of behavior (e., repeat visitors) and in terms of attitudes.”
• For advertisers, “even in digital media the overall popularity of the outlet measured by reach, and therefore exposure-based metrics, will remain important currencies in evaluating the advertising worth of media properties.”