Who’ll Use the 1990 Census Data? Let Us Count the Companies : Demographics: As a marketing tool, the sheer volume of information is priceless. Users wish only that they didn’t have to wait 10 years for updates.
When Orange County residents fill out their 1990 census forms this spring, most will assume they’re participating in more than just another marketing survey. The census, after all, is carried out by the federal government under a constitutional mandate, and its avowed purpose is to count the population so that political representation and government funds can be properly distributed.
But the census also serves as a comprehensive study of American consumers, producing reams of information on the income and life styles of people who live in a certain county, or on a particular city block. It’s the kind of demographic information that makes marketing strategists drool, and no other data source can touch the census in terms of scope and accuracy.
It’s no surprise, then, that census information is sold and resold and reshuffled for an incredible array of business purposes. “Virtually every business uses census data,” said Mark Baldassare, professor of social ecology at UC Irvine who himself uses the census extensively. “It’s omnipresent.”
Retailers use census information in deciding where to locate new stores. Banks use it in determining how to market certificates of deposit. Health care companies use it to plan new services. Maura Eggan, marketing director for South Coast Plaza, puts it simply: “The census shows where our customers are, and in what numbers.”
The basic census questionnaire--which will be sent to every home in the country by April 1--simply records the number of people in a household, their age, sex, marital status, race and the type of housing they reside in. That’s useful information for any marketing department.
But even more mouthwatering is what comes from the the so-called long form, or sample form--sent to one out of every six households--which involves 45 additional questions that elicit detailed information on household income, mortgage payments, commuting patterns, energy usage and many other matters.
The volume of information collected in the census is so staggering, however, that making good use of it can prove difficult. The Census Bureau, which spends $2.6 billion collecting the information, does not slice and dice the data to fit every possible use, and not many businesses have the computer equipment or manpower to crunch the numbers themselves.
The basic data set has another liability: with 10 years between censuses, it gets old. And it takes the Census Bureau so long to compile everything--the basic 1990 “head count” should be ready by year’s end, but much of the more detailed data will not be available until 1993--that some of the information is outdated before it’s published.
Solving these two problems is how the raft of independent information vendors make their living. Companies such as Donnelley Marketing Information Services, National Planning Data Corp., Urban Decision Systems Inc., and National Decision Systems function as what Jeri Denniston, marketing manager at Encinitas-based National Decisions Systems, calls “value-added resellers of census data.”
For a price, these firms will provide demographic data for any population area. Thinking of a new store at certain intersection? A profile of the population in a two-mile radius of that intersection--or a 20-mile radius, or a 200-mile radius--is just a phone call away. “We repackage, reformat, and resell the data in bite-sized chunks,” said Jim Paris, senior associate at Los Angeles-based Urban Decision Systems Inc.
The Census Bureau tabulates data in a geographic hierarchy which begins with city blocks and moves through groups of blocks, cities, counties, states and the nation as a whole. But pulling out the precise block-groups, for example, that are necessary to define a certain area can be a painstaking process for the unequipped.
The information vendors also continually update the census information and develop projections by using sophisticated statistical techniques and other sources of information ranging from state Department of Finance surveys to postal delivery records. Donnelley also incorporates information collected by other units of parent company Dun & Bradstreet, such as A.C. Nielsen and Dun’s Marketing Services.
And for customers who want it, the information companies will go even further and overlay highly detailed life-style profiles onto the demographic profiles. They’ll tell you not only how much money people in a certain neighborhood make, how much education they have and how many cars they own (information which comes directly from the census), but also what make of car they’re likely to drive, how often they eat out and what vacation destinations they frequent (information extrapolated from marketing and sociological studies).
Sometimes, the census data is several times removed from the original source. Several years ago, Mel Curland needed more Volvos for his booming Mission Viejo dealership, but he was having trouble persuading the corporate pooh-bahs in Sweden to give him a larger allocation. The tremendous affluence and high growth rates in South County, it seems, were not so obvious from Stockholm.
Curland needed figures to show that the people in his market area fit Volvo’s profile of the typical Volvo customer. He got those figures from Market Profiles, a Costa Mesa consulting company, which had in turn purchased them from Urban Decision Systems, which itself had bought them from the Census Bureau and then updated them with some of its own data. Curland said he ultimately got the additional cars.
Larger businesses, however, often get closer to the primary source. Census information can be purchased directly from the Census Bureau in printed form or on computer tapes, and this year for the first time some data will be offered on optical disks as well. Buying the tapes--at about $175 apiece--is a practical option only if a company has a mainframe computer and some in-house programming capabilities, but for big companies that’s not too big an obstacle.
Jim Stiles, marketing research manager at FHP Inc., a Fountain Valley-based health maintenance organization, said his company has purchased directly from the Census Bureau as well as from outside providers, but that it is now relying more heavily on the latter. “The bureau is a data dumper. You can filter it yourself, but it gets to be a headache,” he said. “The vendors will organize it for you.”
FHP, Stiles added, uses the information for a broad range of purposes. If the company is considering entering a new market area, it will look at the profile of the population there and see how it compares to areas where the company currently does well. In an existing market area, the company will compare the characteristics of members and non-members to see who is using the services.
FHP also uses census data classified by ZIP code to assist in its targeted mailing efforts, an application that is extremely valuable for any company that sells its products or services via the post office. The Pennysaver shopper publications, for example, are often “zoned” according to ZIP code boundaries, and publishers such as Brea-based Harte-Hankes Pennysavers make extensive use of census-based demographics and related data to show advertisers what kind of consumers live in a given area, and to analyze how zones might be adjusted to match shopping patterns.
John Walkenbach, vice president for market research at HomeFed Bank in San Diego, described his use of census data as “fairly typical.” With a desktop system from National Decision Data, Walkenbach analyzes areas where the company is considering opening a new branch to see “if the people match our target customer base.”
The system might also be used by a branch manager trying to figure out why he’s having trouble meeting deposit goals, or by the marketing department to determine where certificates of deposit might be most effectively promoted. “We use it every day for one reason or another,” Walkenbach said.
While the information vendors claim their updates are extremely accurate--and that the new data from the 1990 census is therefore not a huge event--some of the users are not so sure. Stiles noted that the projections get weaker and weaker every year beyond the census, and that staying up to date is especially difficult in a fast-growing and fast-changing area such as Orange County.
“Canada does a census every six years,” Stiles observed. “If the U.S. would do it every six years instead of every 10, that would be great.”
Annie Gerard, director of commercial and industrial operations at Market Profiles, uses census data to help advise clients on where to build new commercial developments, and she agreed that “for our purposes, 10 years is a really long time. In areas like Orange County, it’s dangerous to use projections based on growth rates. Everyone is excited about the prospect of new census data.”
The 1990 census, while mostly unchanged from 1980, contains a few innovations that will make it even more useful for local businesses. The multiple-choice question on housing value now uses $500,000 or over as the top classification; the old category of $200,000 or over was virtually useless in Orange County. Bankers are excited that the census will for the first time ask about second mortgages, one of the hottest areas of bank lending.
And while everyone will have to wait a couple of more years for all the information, the data promises to be more accessible than ever before. Not only are there more information vendors doing more things with it, but the Census Bureau itself is working to disseminate the data in more usable forms.
Larry Hugg, an information specialist with the Census Bureau’s regional office in Van Nuys, noted that some information will now be available not only in published reports--the basic source for seven out of 10 users--and computer tapes, but also on optical disks which can be read by properly equipped personal computers. In addition, the data is available on-line through some electronic information services, and the bureau will produce printouts of data that is not contained in published reports.
And considering what you get, it’s not very expensive. Summary reports in published form cost $29 to $50, and in 1980 the entire census data bank--711 mainframe computer tapes--could be purchased for $124,425, according to Paris of Urban Decision Systems. Hugg said there will be “thousands” of tapes for the 1990 count, so it might be a bit more expensive.
“We sell this stuff real cheap--we’re providing a service to the public,” Hugg said. And, he might have added, an invaluable service to marketing mavens everywhere. HOW BUSINESSES CAN USE THE CENSUS
There will be a wide variety of information available from the 1990 census that business can use. What follows is an example of some of the data than can be obtained to help make business decisions.
Business Population Housing activity data data Locating a store Household composition Length of residence Age Home value or rent Education No. of autos Income Shelter costs Starting a job Age None training program Education Unemployment rate Language Work experience Marital status Need for home Household composition Length of residence health care and Age Congregate housing* support services Marital status Telephone Disability income Kitchen facilities Language Plumbing Selecting store Household composition Length of residence merchandise Income Home value or rent Age Shelter costs Setting fund-raising Household composition Home value or rent goals for canvassing Income Length of residence Age Year moved into residence Education
* Occupied by persons of like characteristics who have their own apartment units but eat their meals together, such as, housing for senior citzens or the handicapped.
Source: U.S. Dept. of Commerce, Bureau of the Census
