A Businessman, A Duck, and A Nun Walk Into a Bar…

A POV By Nina Hale, CEO Of Nina Hale, Inc., about Segmentation and Microtargeting. 

Facebook segmentation and microtargeting based on interests

Segmentation – the process of finding similar characteristics among customers in order to personalize and better market to them – certainly isn’t new. Most of the direct marketing industry is based on the practice. However, digital marketing, with its cookie-based panels, and the growth in the sophistication of big data, has brought about enormous advances in the ways we can identify and advertise to specific targets who care the most about our messages.

2013 Was A Big Year In Segmentation

It seemed there was a big announcement about advances in target advertising each week throughout last year.

  • Google greatly improved access to all demographic and affinity reporting on site visitors, allowing you to target similar audiences, while also enhancing audience interest options. But at the same time though, they increased safe searches and took away our ability to measure based on organic search keywords.
  • Facebook, already well-established in interest advertising, fully rolled out its big data integration with “partner categories.” This matched three of the larger data service companies with Facebook users to target any and all demographic features, offline credit card purchase behavior, and more complex look-alikes of Prizm and Mosaic.
  • Twitter expanded both its targeting and direct response options to include email capture, user / similar user targeting, interests, and offline data from companies such as Datalogix. Plus, they began to offer a simple way to target some Twitter users who likely saw your TV ads.

Meanwhile, real time bidding (RTB) for display inventory offerings steadily increased, and programmatic display advertising continued to show results rivaling direct search queries, which are generally believed to be as targeted as it gets due to capturing the exact interest displayed by the consumer.

Show Me The Money!

Nina Hale, Inc., has been a big believer in targeted advertising for a long time. We first started advertising on Facebook in 2006, showing ads for “music college” to 17-22 year-olds who liked playing in bands, drumming, etc. These achieved a cost- per-lead of 25%, comparable to the rate of a similar lead on Google AdWords. We’ve been hooked ever since.

A few NHI targeting highlights from 2013:

  • Targeting gun enthusiasts, motorcyclists, and military veterans in Facebook for a client with a treatment for hearing damage. We decreased costs by 400% while improving the conversion rate by 150%.
  • With an Enterprise client, we targeted non-converting site visitors for one brand website with display and search messages for a different, yet complementary brand. This ability to take a multistep / multi-website approach ensures that we continue a relationship with potential customers guiding them to exactly the best product or service for them.
  • We targeted tweets to users who had tweeted about a TV show they had watched, where we knew the client’s ad was showing.  The cost-per-lead matched that of the highly targeted, but limited paid search segment.
  • We performed research to understand the cost-per-lead of consumers based on their proximity to a client’s branch locations, thus changing our bids and reducing costs in lower-converting areas. Combined results for this client from all tactics were an enterprise-wide 65% increase in leads with a 50% decrease in cost-per-lead.

Traditionally, with CPM advertising, the more targeted you want your list, the more you have to pay for it – through higher CPMs for more specific segments. However, because much of digital advertising is on an auction system, a highly targeted segment may actually be less competitive, and will have a lower-priced cost-per-thousand or cost-per-click.

But, your costs for creative may increase because you need to show appropriate content to your target. If you’re going to the trouble of advertising to veterans in San Diego, you can’t show them creative more appropriate for a family in Milwaukee. The segment is only as good as the personalized experience that you create for it. So you have to always calculate whether the higher conversion rate will offset the higher prices for creative messaging, trafficking, and reporting.

Garbage In

Targeting can be an incredible way to home in on a specific segment of demographics or interests. However, microtargeting is only as good as the data powering it. A messy email list will likely result in a messy audience segment. Inaccurate dealer locations will create duplicate addresses and send map users into dead-end cul-de-sacs.

Hey Creeper!

We’ve all gotten pretty used to seeing retargeted ads – products you just viewed on one site following you around elsewhere online. There are certain segments and topics that are too sensitive for retargeting, such as health care. You also need to be careful with frequency limits so you don’t fatigue your customer. If you’re a big brand name, you need to be careful about potential backlash with getting too Big Brother with your targeting.

Take-Aways

  • Start with a measurement strategy. Ensure that your goals and micro-conversions are accurately set up, and establish an attribution model to understand the consumer’s path to purchase, including how that may differ among segments.
  • Take a look at what you already know. If you’ve already done market segmentation research such as Prizm or Tapestry clusters, or other database analytics, ensure that you’re using all available information and that your digital teams are aware of them.
  • Install demographic pixels on your website. Easy and free options are Quantcast code, and turning on demographic and interest reporting in Google Analytics. Remember that you’ll need to revisit your privacy policies when you do this.
  • Start small, test, and refine. Segmented targeting doesn’t always work. Keep control groups and take all costs into account when measuring the return.
  • Understand the measurements. Take a look at the data and form an understanding of which segments convert. Don’t make assumptions or start with an answer you are looking for data to support; start with a question and keep your mind open to what you will learn, even if it’s not what you were thinking.

Next Steps

Do you need help with measurement strategies or digital targeting options? Nina Hale, Inc. takes a measured, ROI-driven approach to multi-faceted marketing strategies, helping companies grow valuable leads and eCommerce sales.

Useful Sources

Ad Exchanger: Defining Programmatic Buying

Search Engine Land: Targeting with AdWords vs Google Display Network vs Programmatic Display

Quantcast

Overview of Demographics and Interest Reports from Google

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