Brands must close the loop on audience segmentation

Marketers competing in mature product categories are in a tough spot. For offerings from cereal to flights to cars, competition for market share and share of voice is ruthless.

Brand managers have to contend with long-established brands (e.g., Pepsi and Coke), hot new trends (e.g., coconut water), and even competition within their own corporate walls from overlapping brands (e.g., Dasani and Sprite.) Targeting the same old segments, such as “soccer moms” or “business travelers,” simply doesn’t provide enough product lift to win against the current of competition.

Companies in these sectors are forced to get creative by targeting a varied set of audience segments. A detergent brand looking to attract new audiences and be more relevant to current customers might create convenient pre-measured pods that appeal to both working moms and single men, for example.

Tailoring to different segments

A lot of work goes into understanding the target audience’s needs and creating a marketing plan to communicate the differences of the new product as effectively as possible. Savvy marketers will develop various creative and media plans tailored to the different segments. The detergent brand may choose late-night TV and streaming video for the single guys and online news apps for the working moms.

Marketers must review each predetermined audience segment to understand its inherent value. Just because a marketer identifies a segment as a potential target, it doesn’t mean it’s worth the extra effort and investment it requires.

Analysts should ask: How much did they pay to reach them? How much did they spend on tailored content? Which segments reacted best, to what, and why?

Unfortunately, after all of this meticulous work, ingrained campaign features like media channels and spending are often the focus of the performance evaluation, rather than the performance of the different audience segments.

Greg Pharo, a director of market research and analysis at AT&T, has suggested that many marketers focus too closely on the financial returns of individual marketing channels in their media mix, to the detriment of many other informative metrics, including audience segments. As a result, he notes, important work that’s done at the beginning of a campaign is wasted.

Common measurement approaches cancel out the importance of media plans that are tailored to individual audience segments. Ingrained measurement practices that focus on marketing channels or compare product performance at a high level will not pick up on the variation in performance of two or more distinct groups.

Taking an audience-first approach

Comparing pre-measured pod performance to liquid detergent will show only overall sales. Instead, brands need to look at product sales lift for the target groups, and then determine if the overall cost of differentiated offerings and marketing is a profitable strategy.

A channel-centric approach to media analysis creates the same watered-down view of audience segment performance. An analyst might look at the performance of mobile compared to TV or search and determine that it was not worth the price for the overall average buyer, while it might have performed very well for the working moms it was meant to target.

Instead, businesses must be able to view an analysis along segment lines and take a closer look at media performance. That way, marketers can determine how to optimize marketing plans by segment.

Marketers put a lot of R&D into specialized products and niche audience targets. It’s in their best interest to ensure that their work is recognized, analyzed and optimized.

If a brand is willing to take an “audience-first” approach to their product and advertising development, they need to take an “audience-first” approach to their analytics as well.

Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.

About The Author

Matt Nitzberg

Matt Nitzberg is Chief Growth Officer for ThinkVine, providing cross-channel marketing attribution, forecasting and optimization for the modern marketer.