Marketers segment their audience into smaller subsets in order to target the right people with the right message. Because there are countless ways to group types of consumers, audience segmentation can be overwhelming and, at times, tough to wrap your head around.
Here is a breakdown of the most common ways to segment an audience, and an explanation of how these types of segments can be used to achieve specific goals.
What this is: Age, gender, race, ethnicity, household income, number of children in household and other socioeconomic factors.
How it’s used: Demographics are one of the most common ways marketers segment an audience based on common (or assumed) attributes found within different genders, ages or economic groups. A makeup brand might exclusively target women with products such as lipstick or nail polish, because their previous customers have been largely female. A health supplement company may target millennials with different messaging & products than an older audience, who might be interested in different supplements. Alternatively, they could advertise the same product differently to varying generations, such as highlighting its anti-inflammatory benefits to older audiences and its cognitive benefits to a younger audience.
What this is: Psychographics are derived from a combination of demographic, behavioral and survey data, which reveals more about consumer’s frame of mind. They include consumer attitudes, values, personalities, likes, interests or habits.
How it’s used: When your ideal target customers don’t fit neatly into specific demographics or locations, but are more united by their values or attitudes, you can attempt to group them by psychographics. An example of this is, targeting people who value nature with environmentally friendly products or targeting athletic clothing to people who are excited about the Olympics.
What this is: Geolocation data refers to information about the location of an individual, which is often based on the location of their network-connected device.
How it’s used: These segments can be useful to regional advertisers, who only have stores in a certain area or sell to certain places. Also, this is useful for advertising specific products to specific regions, such as boots and heavy jackets in the north-east during the winter. Retail and brick-and-mortar stores can also find locational data extremely useful for targeting a user when they are inside or near a store, in order to bring them in-store or encourage them to buy with a coupon.
What this is: Life stages refer to key life periods, such as going to college, getting married, buying a house or having children. Life stage audiences are often determined by demographic data such as age and children in household, combined with certain purchase behavior (for example, a married woman aged 25 – 35 shopping for a stroller is likely to be entering the “new parent” life stage).
How it’s used: Similar to how demographic data allows you to target makeup specifically to women, life stage data can enable marketers to advertise dorm bedding to new college students, or a car seat to new parents. Studies show that when people begin a new life stage they are more open to creating new brand affinities—meaning life stages provide the chance to create a new loyal customer with a high lifetime value. If they had never shopped for diapers before, they may see a brand’s ads and begin using their product when their child is born; for this reason, life stage data can also be used for branding campaigns to link your brand to new buyers before they need the product.
What this is: Season-driven include people such as back-to-school shoppers, Valentine’s Day, Mother’s and Father’s Day, summer seasonal buyers, early or late holiday shoppers, Black Friday and Cyber Monday Shoppers and more.
How it’s used: Seasonal segments are used for ‘bottom-of-funnel’ campaigns to reach customers when they’re ready to make a purchase. For example, a Valentine’s Day segment can be used to target someone who, through demographic and past shopping data, is likely to be in a relationship and a purchase romantic gifts for their significant other.
What this is: Shopping data can be used to identify people actively shopping and clicking for products, or to identify past purchase behavior.
How it’s used: These tend to be high-converting segments since the shopper is either looking to buy or has a history of buying similar products. Direct-response campaigns usually benefit from shopping data because it can put the product in front of shoppers when they are ready to buy. Shopping data can also be used to advertise complementary products, such as a laptop case to someone who recently purchased a laptop. Past purchase data, from several weeks or months ago, may not convert as well but can be useful to stay in the mind of customers who have purchased products from similar brands and verticals; when it comes time for their next purchase, you’ll be in their thought process.
What this is: Audiences can be segmented by certain “types” of shoppers, such as Deal Seekers, Luxury Shoppers or Online Buyers.
How it’s used: Shopping data (as described above) is useful, but for certain products it can be even more helpful to target certain types of shoppers with specific messages and products. Deal Seeker campaigns are used to target shoppers who scour the web looking for the best deal, and therefore respond well to sales, discounts or promotions. Luxury Shopper campaigns can be used to put a high-end brand in the mind of someone who values premium products. Because the decision process to buy luxury goods takes longer, luxury brands invest in a lot of higher-funnel branding, rather than fixate only on short term sales. Someone who is advertised a high-end vehicle will most likely not purchase it today, but it will stay in their minds when they do look for a luxury vehicle years later.
What this is: Affinity-based marketing can be used to target people who are interested in a specific brand, maybe a competitor with similar product offerings.
How it’s used: Targeting based on brand affinity can be used for conquesting, to associate your brand with other similar brands, or to overtake and disrupt a rival brand’s messaging. A wristwatch brand may want to advertise to their competitor’s audience with advertisements highlighting their products unique features, such as a higher karat gold band or a sapphire crystal cover. Additionally, they may advertise to people interested in brands who sell different products but share the same aesthetic, such as a whiskey company with a similar market audience.
What this is: Lifestyle segments represent the hobbies, interests and way of life of their audience, for example the Fashion Insider, Household CEO, Tech Enthusiast, Fitness Buff or Gear Head. The segments can be put together as an aggregate of behavior, including multiple past purchases over time, demographics and content consumed.
How it’s used: Lifestyle segments tend to have an affinity for purchasing a certain type of product, so they can be especially valuable for new product launches or services which fall into the categories they’re interested in. For example, Apple might promote its new iPhone to Tech Enthusiasts or Early Adopters who are interested in the latest technology. This is where brands will find their advocates and trendsetters.
There are a wide variety of ways to segment an audience and target consumers for specific types of campaigns. There is no single segment that is “perfect” for all campaigns, you’ll need to work with your data provider or media partner to figure out the most effective way to go about targeting your best customers, depending on your campaign goals and specific KPIs.
Don’t hesitate to reach out if you’re curious about the different types of audiences that can be segmented and targeted to fit your campaigns.