Alphanumeric Soup: The Story of the NCCS Grid
1. They reach people who are amenable to persuasion, in a cost-efficient way. This is the discipline of Media planning.
2. They craft a persuasive message. This is the discipline of Communication.
For Media planning, advertisers in India use a tool called the NCCS grid. Indeed, throwaway references to “NCCS AB segments” and the like are a calling card of the seasoned and wannabe advertiser alike. I’ll spare you its gridly alphanumeric details here. We’ll talk about a much more interesting story: the story of its genesis.
Let’s set the scene. Here’s an advertiser working in the e-commerce industry, who wants to advertise on TV:
1. She identifies the target segment as follows: all people in India who have shopped online at least once in the last 12 months.
2. The advertiser tells her TV planner: “Show my ad to all people in India who have shopped online at least once in the last 12 months.”
3. The TV planner now shrugs and says: “I don’t know how to identify this target segment.”
Nor would a TV planner know how to identify “people who are likely to buy high-end phones” or “businessmen looking for reliable supplies of some widget.”
Rather, a TV planner presents a menu of standard segments for the advertiser to pick. This is the NCCS grid.
Using this, the advertiser maps her target group (“all people in India who have shopped online in the last 12 months”) to the best approximation on the NCCS grid (say, NCCS A, B). And that’s the input she gives to her media planner.
In the digital world, the targeting options are more direct. You can simply specify, for instance:
a. People who are likely to be “in-market” for travel;
b. Algorithm-generated Lookalike audiences which are similar to your existing customers;
c. People who are likely to have “affinity” for e-commerce purchases;
d. You can even leave the targeting almost entirely unspecified, for machine learning algorithms to play by ear and figure things out.
Returning to the world of TV: the question is, what’s the best way to arrive at these standard segments? A little digression: a couple of weeks back I was listening to a podcast where the guest, Shishir Mehrotra, described the concept of an “eigenquestion”:
“For a simplistic definition, the eigenquestion is the question where, if answered, it likely answers the subsequent questions as well.”
With this framework in mind, what’s the best way to arrive at these standard segments? Turns out, there are a couple of eigenquestions:
1. What method will lead to as much Discrimination between segments as possible?
2. What method will lead to as much Homogeneity within segments as possible?
(on reflection: these are the questions you’d ask to arrive at any type of segmentation).
This isn’t rocket science. It simply expresses the intuition that different segments ought to be different from each other and similar within themselves.
Now, India had something called Socioeconomic Classification (SEC) for several decades to solve exactly this. However, times change, requirements change, and there was an attempt to figure out a better way to do this.
In the early 2010s, Market Research Society of India (MRSI) and the Media Research Users Council (MRUC) came up with the New Consumer Classification System (NCCS), which the Indian Readership Survey (IRS; a survey that tracks newspaper readership and product consumption) adopted in 2014 and the Broadcast Audience Research Council (BARC; an organization that tracks TV viewership) in 2015.
NCCS asks its respondents the following questions:
1. What’s the education of the Chief Wage Earner?
2. What’s the number of items used in the household, which in my mind fall into the following categories:
a. Roti: Agricultural land (owned), LPG stove, refrigerator
b. Kapda: washing machine
c. Makaan: electricity connection, ceiling fan, AC
d. Travel: 2-wheeler, 4-wheeler
e. Technology & Entertainment: Colour TV, Laptop/computer
Based on this you can arrive at the NCCS grid, available at the link below:
https://www.afaqs.com/news/media/42980_a-dummys-guide-to-nccs
If you own 9 items or more in the above list, and your educational qualifications are “graduate and above” you fall into the NCCS “A1” classification, which forms <1% of the population of India. At the other end is NCCS “E3”, which is the segment that owns none of the durables in the list and is illiterate.
That, in short, is the story of the NCCS grid.
1. https://mruc.net/uploads/posts/7709d00f2bfd8ec61574c05948641b7d.pdf
2. https://coda.io/@shishir/eigenquestions-the-art-of-framing-problems/eigenquestions-3
3. https://www.barcindia.co.in/BARCIndiaInTheNewsDetails.aspx?ID=77