In my previous post, I wrote about the multitude of fragmented platforms in the digital marketing ecosystem. Similarly, there are numerous and diversified consumers. We all could guess that a 45-year-old married man from LA and a teenage girl from Philadelphia probably aren’t shopping online for the same things.
But when it comes to marketing–as all good marketers know–having a strategy to manage your segmented customer base is key to optimal success. It’s why several companies are “out” with the old technique to broadly advertise on their public media pages, and “in” with the new effective strategies to only target their relevant customers.
These customers can only see what they’re shown, and not what’s shown to other segments, thanks to dark marketing – hidden ads that only display to their selected audience. With more and more people tuning in online and endless ways to segment, dark marketing persists. It impacts customers and shapes an even more competitive digital environment.
So, what’s segmentation? It’s taking all of your current and prospective customers and dividing them into targeting clusters based on shared characteristics. It’s obvious that not everyone would respond equally to your ads, so why waste your time and money sending a singular message to the whole? The very idea of market segmentation affirms a lesson from Marketing 101: It’s about your audience, not your brand. To make ads more relevant and meaningful for your customers, you can segment in a variety of ways–through socio-demographics, geography, values and interests, behaviors, and much more.
You advertise to different segments differently, and with certain segments, not at all. Knowing your customers isn’t just about understanding what they want and how to effectively reach them. It’s about getting inside their heads and seeing the world from their perspective. As a generation that was raised alongside social media, Centennials (aka Generation Z) already have a unique mindset on the web that inspires selective marketing approaches. When you break them down further into sub-segments, different versions of ads and campaigns will appeal to each sub-segment.
Companies also like to segment according to customer-brand relationship (e.g. by session duration on web pages or new vs. returning customers). And more than ever before, online marketers are spotting users’ interests, values, and motivations to make their segments–and therefore, marketing actions–even more personal. Customers can be categorized into one segment, or many. But they can’t see ads shown to segments other than their own. This means you, too–in the era of dark marketing–can’t see all ads your competitors show their target audiences.
The Power of Split Testing
How do you know how to most effectively reach and appeal to the segments you want? One way is through split testing (also known as A/B testing). This common marketing technique employs two major kinds of segmentation strategies: pre-test and post-test segmentation. With pre-testing, you identify a single segment first and run tests on it for experimentation with various messaging. As a result, you’re able to determine which variation comes out on top for future targeting to that particular segment.
In post-test segmentation, you run tests across all segments to compare how each performs with the different ad variations. You might notice only a marginal difference between messaging and ad types, but drilling down to the segment level can reveal a very different outcome. For example, two Netflix ads–one depicting your life without it and the other, with it–might yield equal conversion rates. But when you examine male vs. female engagements, you might notice that men respond much better to the ads that characterize life without the must-have entertainment. A/B testing can truly advance your marketing strategies, and harnessing it together with segmentation makes it even better.
Why Segment, and Why Care?
It’s no news to professional marketers that segmenting your audience is a good idea. Purposely advertising to only relevant populations is extremely cost effective and helps stabilize your customer base. Running marketing tests to different segments can help build up a database of metrics, from which you can gather insights and patterns for implementing more and better data-driven campaign strategies. By smartly segmenting, marketers can also remain mindful of customers’ “life cycle” changes (e.g. growing up, getting married, switching jobs, etc.), so they can keep up with and retain the various segments. And what about the customers? They’re better off, too; from the refinement of split testing, they’re exposed to well-communicated ads they likely care about.
For these reasons and more, segmentation is pivotal for a successful marketing strategy. What may be even more pivotal is the fact that you can’t fully track your competitors’ audiences and the ads they see. Dark Marketing is a growing threat, and at BrandTotal, we’ve got the software to combat it. Look deeper into the segmentation of your competing brands...so when it comes to knowing their techniques, you capture more than just a small segment.
Special thanks to Rachel Pleet for support in writing this blog post.