Audience segments help marketers organize people into groups that share similar, quantifiable attributes. This kind of categorization allows companies to impact these groups with targeted products and messaging. But it also helps companies provide a better customer experience. In order for businesses to effectively target audience segments, they need to make sure each audience segment is categorized effectively.
According to Gartner, most marketers use a variety of rules and approaches to draw up audience segments. On a fundamental level, audience segments are drawn around basic human actions: who people are, what people think and what people do. However, the more precise and specific marketers can be, the more successful a business can become. While broad-based segments help businesses categorize different users, microsegments help businesses deliver content to the most appropriate audience.
Types of Segments
More specific segments might be defined by location, product and media use, social behavior, lifestyles and attitudes. Below are common audience segments as identified by Gartner.
- Behavior - Buying patterns and preferences
- Benefits - Functional or emotional benefits of the advertised product
- Geodemographic - Regional influences and sociological trends
- Occasions - Special occasions that influence purchase
- Psychographic - Lifestyles and attitudes
However, while demographics and lifestyle categories have made for successful targeting in the past, digital trends suggest that even higher attention to personalization is necessary. For example, one reason Amazon has been so successful is because every transaction gives them data and insight into the who, where and what of the buying process. Suddenly, two individuals who share the same age, ethnicity and zip code can be segmented by mobile use, search history, and personal preferences (among other identifiers). A wide variety of flexible categories that can be consistently reorganized give businesses even more control to connect for audience targeting.
One criticism to group segmenting is that because the public is so saturated with advertising, consumers can tell when they are being targeted. The rule suggests that the more data a company has on its customers, the more data it has to “pattern match” similar buyers. But just like the 18–34 age range is enormous and diverse, more granularity is necessary in order to satisfy consumers.
According to Hitwise, micro-segmenting is replacing broad-based segments. By layering hundreds or even thousands of data points to identify granular customers, marketers can set rich sets of attributes to increase the quality of the audience. That is, an audience with a higher likelihood for conversions. “The result is a rich mosaic of tens, hundreds or thousands of micro-audiences, rather than just 10 to 20 segments.”
Targeting to Microsegments
With set and defined audience segments, audience targeting becomes easier. For example, if your site displays advertisements, pre-set rules allow you to display one set of advertisements to one user segment, and a different set of advertisements to a different user segment. The same targeting rules can be applied to content like news, images and entire campaigns.
This can be an especially smart strategy for businesses with partners or subsidiaries. By staying in control of carefully defined segments, businesses can prevent any one player from cannibalizing another partner’s target audience. Careful planning can improve results and increase ROI. However, appropriate audience targeting is not just for content delivery. Using an audience targeting application can help you quickly measure the effectiveness of these campaigns.
Instead of relying on demographics alone, Air Asia pursued the granular level by leveraging their CRM database to define and value audiences based on the overlap of travel frequency and social media brand awareness. According to Ad Age, this let the airline serve individual consumers with custom messaging and improved ad spend by 58%.
How Businesses Can Win
The digital world must think of audience before content. Audience segmentation is about breaking down target markets based on certain criteria in order to deliver content to the right people in the right place at the right time. Doing this increases relevance, so increasing volume means adding significance to the bottom line.
It is important to remember that parameters are just guidelines that marketers can use to reach dynamic audiences. No two users are the same, so if you create a label, you should be willing to change it. When Netflix announced changes to their recommendation algorithm, they suggested that demographic rules were much less important than other variables, like personalized ranking and viewing history. However, if the logic was simple, the change wasn’t easy. Netflix was required to build individual models for each region and then combine these models into a global model that could still reflect local taste differences.
This level of attention can have significant impact on your audience. Netflix was only ready to turn conventional personalization on its head when they had redefined their ideal audience segments. If viewers in India and Brazil are both interested in Bollywood films, then they should be able to get equally curated recommendations.
This kind of shaping and reshaping is the kind of customer experience more and more consumers desire. By studying the data, testing carefully across segments and microsegments and changing the business models accordingly, your business stands to have a profound impact on its audience targeting.