Why Geography Matters in Market Segmentation

An Ad Age Stat Q&A With Patchwork Nation's Dante Chinni

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Marketers know there's more to the U.S. than red states and blue states. Pundits might grudgingly agree, but it's an easy crutch to lean on, and so every two years increasingly geeked-out versions of the map appear across the news networks.

But what does a map like that really tell us? After all, there are 3,144 counties in the U.S.

Dante Chinni
Dante Chinni

Dante Chinni has spent the past few years studying them all. Working with James Gimpel, a professor of government at the University of Maryland, he has crunched demographic, political and religious data to classify the counties into 12 types that together make up the "Patchwork Nation." In addition to stories for the Christian Science Monitor and other media partners, Mr. Chinni has collected his findings and observations from data and from spending time in representative communities into a book, released last fall.

Segmentation isn't new -- ESRI has its "Tapestry" and Nielsen/Claritas has "Prizm" for instance -- but the Patchwork Nation, with its political and religious data sets, creates an interesting lens that Mr. Chinni filters other datasets through. The results are of use to pundits and marketers alike, such as his recent post, "The Holiday Economic Divide: Do You Live Near Wal-Mart or Saks" which examines the speed at which different communities are recovering from the recession.

Ad Age: What can marketers learn from a segmentation like "Patchwork Nation"?

Mr. Chinni: It depends on how far they go down the road of geography to their segmentation. To us, it's all about the geography. You see numbers in the news about what the unemployment rate is, what the foreclosure situation is in the United States. But those numbers you read may have very little to do with what you see around you every day. If you hear that the unemployment rate is 9.8% but where you live it's about 3%, it may feel like there is no recession. There are some places where the unemployment rate is still remarkably low. Same with foreclosures. There are some parts of America that haven't been touched by the foreclosure bug at all. The reality that people see can be very different.

The way [journalists] fall back on the red and blue split of America is just foolish at this point. The country is remarkably more complicated than that.

Ad Age: In the book, and a recent lecture you gave, you talk about how the recession hit different community types at different points. What have you seen?

Mr. Chinni: I've been going [to the 12 representative communities] for three years now. I know these people. The numbers really give me a view at 30,000 feet but when I go to the people I can kind of get a look from the street. When I went on my first trip out to Lincoln City Oregon (the representative community for "Service Worker Centers") it was in January and February, 2008 and they knew something was wrong.

Other places like Eagle, Colo. (the representative community for "Boom Towns"), for instance, were convinced that nothing was going to happen to them: "The people who live here make so much money it will never really bother us." Six months later, they felt very differently. Six months after that they understood they were actually in a very bad situation.

There's a feeling in the 21st century that everything is very tied together and to some degree it is. But it's amazing how much that happens economically really plays out at the local and somewhat micro level and how different an economy can be just by driving 60 or 70 miles. You can be in a very different place that's experiencing the recession completely differently.

Ad Age: Are they coming out of the recession differently, too?

Mr. Chinni: The wealthy suburban areas ("monied burbs") are going to come out first. I think you can make a really good argument that trickle-down economics doesn't work the way it used to work. But a place where it's still going to work is those monied burbs. Once the unemployment rate starts dropping for some, it kind of affects the entire place because all of a sudden people have more money to spend. They start eating out more. That gets the restaurant more money. He spends it in other places in the area. Maybe he hires more. In "Industrial Metropolis" economies you'll see it because there's a lot of money there. You have a lot of poor but they'll get some help from the fact that the rich people are recovering first. But for other parts of the country, any relief for them is a long way off because they don't have a lot of wealth. The return of the stock market really doesn't help them that much. The "Minority Central" communities in the Southeast will continue to struggle.

Ad Age: "Boom towns" might already be a bit of a misnomer. Do you see the segments changing over time?

Mr. Chinni: I think by the 2020 Census they'll be a split between the rich and the not so rich suburbs. We'll actually need a kind of "super-monied burbs" kind of place. I also wouldn't be surprised to see a split in the industrial metros. There are some big wealthy industrial counties where there are enough rich people to kind of elevate the area.

This is the seventh in a series of AdAgeStat Q&As with researchers who have extensively studied pieces of the demographic puzzle. Earlier we spoke to Joel Kotkin about suburbs and immigration, Richard Florida about cities, Paco Underhill about women, Rose Cameron about men, Tammy Erickson about Generation X, and behavioral economist Dan Ariely about how to use everyone's irrationality to your advantage.

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