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4 Advantages of Audience Segmentation

October 20, 2016

Audience segmentation has been around since before the launch of Sputnik. Still, the technology we have to segment markets has transformed since then. That’s why there are so many advantages of audience segmentation today with access to an arsenal of databases, complicated algorithms, psychometric surveys and more.

Why Segment?

With audience segmentation the media planner or researcher can determine market differentials. With access to database tools, the researcher can use segmented audiences for better targeting. Differentiating dimensions include:

  • age
  • gender
  • location
  • ethnicity
  • behavior
  • interests
  • profession
  • educational background
  • income level

Applying filters to available raw data, the researcher can segment an audience to better identify a narrow target. With a deeper understanding of what they want and the right time and place to approach them, the media buyer can better see ROI on campaign planning.

Segmentation Analysis: Top 5 Questions to Ask

Segmentation determines what people want and helps give it to them. Doing so makes campaign planning and product development more effective. But that’s not all that audience segmentation offers.

Advantages of Audience Segmentation

1. Increased Profits

With segmentation, the business or brand is better able to focus its efforts. With greater attention paid to specific targets, the company can make data-driven decisions that impact productivity and profitability.

With a deeper understanding of the target market, the firm can also improve brand awareness and loyalty more tactically. Taking the demographic and other behavioral insights gained from media research tools, the business can employ more efficient, effective strategies in the effort to grow the market.

2. Enables Market Expansion

Speaking of growing market, audience segmentation can also aid in identifying new market opportunities. With geographic segmentation tools, the brand can determine how effectively it is catering to a particular region and identify areas that are ripe for expansion.

Segmentation insures that the brand expands intelligently. Without a data-driven understanding of the audience in that market, the campaign’s efficacy is going to falter from lack of differentiation.

“The real voyage of discovery consists not in seeking new lands but seeing with new eyes.” — Marcel Proust

3. Enhances Customer Reach

With the business intelligence gained from analyzing segmented customer groups, the brand can better plan campaigns or product pricing. Further, messaging can be targeted to specific audiences, based on an understanding of that target market’s psychology and behaviors.

Speaking to the target customer in a more tailored way can also foster customer retention. With the increased competitiveness and narrowed focus on a particular audience, the business can enhance audience experience of the brand. An audience addressed in a personal way is much more likely to be brand loyal.

4. Lower Risk

A clear, company-wide view of the target audience segments leads to better decisions. For instance, marketing can spend fewer resources on campaigns or media buys that don’t speak to the target market. Audience segment knowledge, too, can drive smarter product development and reduce risk as decisions are made safer and more powerful.

audience segmentation

Common Segmentation Mistakes

Segmentation has many benefits. Yet it needs to be done right to work effectively. The media researcher, after all, is typically faced with large and complicated datasets and must make valid choices in segmenting and studying the analytical results.

Creating too many segments. Yes, differentiation and segmentation can help the company’s efforts. Yet there is a limit to how narrow a target the media research can segment. Adding five or more filters to a market segment can take an audience segment from a targetable market to a tiny group of people too small to reach effectively.

Targeting all segments. Emboldened by powerful marketing segmentation tools, the researcher might be inclined to provide data for many carefully segmented targets. This can lessen effectiveness though. Especially with broadcast media where spillover can see more than one target audience interacting with the variable messages.

Overlooking the obvious. Multivariate analysis is a bright and shiny toy. With so many cross-tabs to choose from and hundreds of data points to sort through, the media researcher must still remember to consider the basic data that can also influence strategic thinking.

Audience segmentation can increase profitability, enable market expansion, enhance customer retention and lower risk. With the right research approach, market segmentation can make a difference to the business’ competitiveness and ultimately its bottom line.

Related Pages:
Audience Targeting
Demographic Audience Analysis
Segmentation Analysis