How to Use Audience Segmentation to Perform Retargeting Well

Let’s paint a simple picture of what a typical campaign might look like:

You advertise your product on Facebook, Google, and other media networks. 

Your ads are shown to people who have never visited your site or know anything about your business. Hopefully, some of them click on your ads. But they don’t make it past the landing page (or there wouldn’t be a story here).

In other words, a potential customer may find your website or landing page through one of your ads or marketing efforts; but chances of them completing a purchase, leave alone becoming lifelong customers, are always slim. 

That’s where retargeting comes into the picture. It gives you a second chance to convert that potential customer who clicked on one of your ads but failed to complete the purchase (or take any other action, for that matter).

What’s Retargeting?

Retargeting, also known as remarketing, is a form of online advertising that allows advertisers to reach users who have previously visited their website but failed to make an order. It works by serving ads to consumers based on their past interactions with the advertiser’s site.

Here’s an article you want to read to find out more about retargeting and how you can use it to boost conversions:

What Is Retargeting Marketing, and How Do I Get More Leads from It?

But for today, we’ll be focusing on a critical component of retargeting: audience segmentation.

What’s Audience Segmentation?

Audience segmentation is the process of grouping audiences based on a combination of shared characteristics, such as demographics, shopping behaviour, and so on. Instead of showing your ads to everyone, you target specific groups of people based on the information you have collected on them.

Recently, there’s been a shift from generic display ads to more granular retargeting strategies that enable advertisers to reach their desired audience with pinpoint accuracy.

Here are a few examples of user behaviour: 

• A visit to specific website pages
• A visit to specific conversion pages
• Social media activities
• Search keywords used
• Purchase behaviour

While the list is exhaustive, you get the idea. With so many ways to segment your audience, you can create highly targeted campaigns that boost conversions and lower advertising costs.

Segmentation Breaks Down into Two Camps

Segmentation can be done in various ways. Some advertisers use a mix-and-match approach, while others prefer to use two popular strategies: behavioural and contextual.

• Behavioural audience segmentation

This type of audience segmentation is based on a user’s behaviour. The idea is to target individuals whose past actions indicate their likelihood to perform the desired action (e.g., purchasing a product, subscribing to a service, etc.).

The value proposition is very strong here since you’re using actual user behaviour to predict future customer actions.

For instance, an e-commerce retailer like Amazon can use past purchases and browsing history to identify who among their customers or site visitors are planning to buy a particular product.

They then retarget these individuals with ads.

• Contextual (User Attribute) audience segmentation

This type of user-based audience segment uses demographic and geographic information to create targeted ads that reach users in specific locations or with similar interests.

It relies on identifiers stored by the platforms the user uses, such as IP addresses, email addresses, phone numbers, cookies, and so on.

For instance, if you’re looking to reach individuals in Singapore, you can upload your email list to Facebook and create a custom audience based on that information.

Why is Audience Segmentation Important?

In his classic piece, “This is Marketing,” Seth Godin talks about the idea of everyone being “the best possible customer.”

That is to say that every individual who interacts with you is somehow more qualified than anyone else on the planet.

And while this may seem like a bold statement, it’s based on sound logic: each time someone engages with your brand, they’re providing information about their interests and preferences. That information can give advertisers insight into which ad formats or messages work best with that particular group of audience.

In fact, when you give a person exactly what they want to see in an ad, they’re more likely to click on it and buy.

According to a study conducted by Adjust, a retargeting campaign is more likely to make you 37% more revenue than a new customer acquisition one.

Audience segmentation is all about personalizing your ads to increase conversions and build a closer relationship with your target market.

It lets you do the following: 

• Define your target audiences
• Create better-targeted ads
• Make your website more personalized for users
• Tailor your marketing message to resonate specifically with the audience you’re targeting
• Bring in more conversions and sales at a lower cost
• Build a relationship with your target market
• Increase brand loyalty

When customers feel like you wrote a particular message specifically for them, they’re more likely to read it and consider your offer.

7 Key Benefits of Audience Segmentation

When executed successfully, audience segmentation can significantly impact your business for the better. That said, here are seven essential benefits to look forward to:

1. Less Negative Feedback:  Sending the same message to different user groups with varied interests and preferences only make it come off spammy or irrelevant. Some people will be annoyed by it, while others won’t even bother to read it. Audience segmentation helps you avoid this situation by creating personalized experiences for different user groups, reducing the complaints to an absolute minimum.

2. Higher Conversion Rates: Having a laser-like focus on your customers allows you to create highly relevant messages that best resonate with them. When your prospects clearly understand what you want them to do, they’re more likely to convert. 
3. Increased Response Rate: People are more likely to respond to your messages and ads if they find them relevant and useful.
4. Better Customer Retention: By segmenting your audience, you’ll be in a better position to understand what they like and dislike. Businesses that show their customers what they want are more likely to retain them over the long run than websites that send out generic messages about random products.
5. Decreased Long-term Costs: By executing a proper retargeting strategy, you’ll have fewer people leaving your site without buying anything. That will reduce your cost-per-acquisition, saving you more money in the process.
6. Boosted Brand Sentiment: People’s perception of a brand is largely influenced by its messages’ usefulness and relevance. When people find your messages helpful, they’re going to have a far more positive outlook about your company compared to when they receive generic messages sent out to everyone.
7. Higher ROI: Marketers who use audience segmentation enjoy greater returns on their investment than those who don’t. First, it’s because of the reduced customer acquisition costs. Second, their messages are more relevant to the target market, translating to more sales and increased revenue for you.

Overall, the better you understand your target market, the more successful you’ll be with your marketing campaigns. Audience segmentation allows you to get a clear insight into your customers’ needs and provide them with the right message at the right time.

Type of Audience Segmentation

There are many different ways to segment your target audience.

1. Demographic Segmentation – This type allows you to divide audiences based on age, location, gender, income level, family status, marital status, etc. 
2. Behavioural Segmentation – This one allows marketers to group their customers according to the actions they take on your site. For example, you may want to focus on people who downloaded an eBook but failed to go through with the purchase
3. Technological Segmentation – This type of audience segmentation lets marketers divide their customers into groups based on the device they’re using (mobile phone, tablet, or desktop), operating system (Android vs. iOS), and internet browser (Safari vs. Chrome).
4. Geographic Segmentation – This type of segmentation can apply to any company or business with multiple locations worldwide. It allows them to divide their customers based on their area of residence or country. 
5. Combining Strategies – You don’t have to choose just one! You can easily integrate the different types of audience segmentation into one comprehensive retargeting strategy. For example, you may want to focus on males aged 25-35 who live in California and use an iPhone 6s Plus.

Audience Segmentation Tips

As you can imagine, the more targeted you are with your ads, the better response rate your ad will get. There are a few things to keep in mind when segmenting your audience.

Keep Your Segments Wide: The whole idea of segmentation is to divide people into smaller groups based on certain criteria. However, you don’t want to go crazy trying to group them into hundreds or thousands of categories.

You want to deal with a manageable number of groups; otherwise, it’ll be too difficult to draft a marketing message for each group. Plus, the more segmentation criteria you put into place, the harder it’ll be to find people who perfectly fit into the groups.

Don’t Segment Too Early: Sometimes, marketers focus on one aspect of their audience and make assumptions before they have enough data to substantiate anything. For example, you might be tempted to think that a 30-year-old male is more likely to buy a camera on your website than a 20-year-old female.

However, basing assumptions on age or gender can be dangerous because it doesn’t consider other factors influencing users’ purchase patterns. It’s better to wait until you have enough data about your customers before predicting their behaviour. 

Focus on What’s Relevant to Your Audience: The whole point of segmenting your audience is to provide customers with messages that are specifically tailored to their needs. Not everyone wants a discount code, so not everyone will be excited at the idea of getting a 10% off. 

However, if you have a segment of people who regularly buy from your site and another one that relies on coupon codes to make a purchase, sending a discount offer to the second group is probably one of the best ways to lure them in. 

Aim for Constant Improvement: If your combination of audience segmentation criteria isn’t working out, you shouldn’t be afraid to go back to the drawing board and try something else.

For example, if your initial strategy was meant for people who don’t have much time on their hands, but it didn’t work very well, you can change it up a bit and focus on those with a busy lifestyle instead.

A good strategy keeps on evolving the more data you obtain. Don’t be afraid to try something new because you can always go back to your original segmentation strategy should it prove better off.

You can start by measuring the data of the kind of people landing on your site:

• Find out why they’re even visiting you in the first
• Find out what makes them stay or opt to shop with you (you want to list all the reasons)
• Find out what makes them leave or hop to the next site?

With every audience segment you create, you want to answer the following list of questions to determine if it’s any helpful:

• Is the segment relevant and more likely to take action? If not, strike it off the list. Another way to look at it is to ask yourself if your company is helping them solve a problem.
• What makes the segment different from all the other segments? The idea here is to make sure the segment is distinguishable from all the other segments. The overlaps should be to the bare minimum. 
• Is the segment sizeable enough to warrant its own group? For all we know, you don’t want to waste your time and resources targeting a group of a few dozen people.
• Is the segment locatable? Is there a specific channel or place where this particular segment spends much of its time? There has to be a preferred communication channel associated with this audience group. Otherwise, you won’t have a way to reach them. 

5. Set Goals and Measure them Accurately

Audience segmentation is one of the best ways to extract actionable insights from your data, but only if you set concrete goals and accurately measure them.

You’re not just after a bunch of numbers. You also want to see how those metrics impact your overall business goals.

For example, your goal might be to increase the average cart value of online shoppers by 20% over the next year. If your efforts fail to affect that metric, take it to mean your audience segmentation strategy isn’t working very well.

6. Use Different Channels

Sometimes you may find that your messaging isn’t effective on one channel, but it does pretty well on another. For example, maybe people are more inclined to purchase items on Instagram than on Facebook or Twitter.

If that’s the case, you shouldn’t be afraid to test out new channels and see which ones work best for your company.

The main thing you have to keep in mind is that, regardless of what platform your audience prefers, you still want to use similar segmentation criteria on each one of them.

Here are a few pointers to keep in mind:

• You can start by reaching your customers via posts on social media. Find out which social media platform do they use the most? Say your company sells ethically made makeup products. Pinterest could be a good start because most of its users are women. You also want to work with an Instagram beauty influencer. That’s not all. You also want to build a strong presence on LinkedIn and Twitter.
• It would also help if you also considered blogging. Simple: just set up a blogging page on your website and start churning out articles that your target audience may find helpful. The idea is to answer questions that your audience may have. For example, if you’re selling camera lenses, you might want to write about different types of cameras and how they work.

It’s also important to keep an eye on the search engine optimization (SEO) front. See what people are typing into Google when looking for products similar to yours? 

• Also, if you have the skill and budget for it, consider creating YouTube videos that show off your products.

All of these strategies add up to one thing: you’re everywhere your target audience is.

You want to be where they spend the most time. That’s what gives you a chance to connect with them and get their attention.

What Not to Do When Segmenting Your Target Audience for Retargeting

When segmenting your target audience for retargeting, you want to start by avoiding some of the common mistakes marketers make that may sabotage your retargeting efforts.

• One Size Fits All Retargeting Strategy

First, a one-size-fits-all retargeting strategy will fail because it doesn’t acknowledge any of the information you have collected on your target audience. Nor does it factor in the interactions they have had with your brand.

Never make the mistake of sending the same generic message to everyone who interacts with your brand, regardless of whether they’re new to your business, had made a purchase before, or opted out of your site after adding a product to their cart.

• Not Offering any Value in Your Retargeting Message or Ad

Second, don’t just serve ads to users who previously visited your site but failed to buy anything. You don’t want your users to see your ad as a distraction they don’t need. 

What you want to do instead is serve them value first. Instead of bombarding the user with the same product they didn’t buy, focus on giving them an offer they can’t resist. 

• Not Adjusting Your Marketing Message Based on the Collected User Data

Lastly, it’s your failure to adjust your retargeting message based on your collected user data. 

For example, a user who recently purchased something from your site will have a different type of interaction with your brand compared to someone who abandoned their cart midway before checking out. You should take advantage of both situations if you can.

For the second group, the idea is to have a retargeting strategy that addresses any possible barrier that might have led to the user dropping out of the purchase process.

If it’s about price/cost, you can offer a discount in your message. If it’s because they couldn’t find the exact product they were looking for, you can show them other items similar to what they wanted.

9 Ways You Can Segment Your Audience for Successful Retargeting

Now that you know what not to do, let’s look at some ways you can segment your audience for successful retargeting: 

1. Think Users, Not Channels

Advertisers tend to focus a little too much on channels instead of the user.

Remember that people tend to visit different platforms for different reasons. For example, LinkedIn users will likely be there to get work-related information, while Pinterest users are more interested in home improvement tips and product recommendations.

Let’s say you run an online store that sells outdoor gear. Your targeted audience might include people who frequently visit BuzzFeed, Marie Claire, or Young Entrepreneur sites. They could be hobbyists or entrepreneurs looking for advice on how to get started with their passion project.

They might also frequent Pinterest, Instagram, and Reddit to get ideas on where they can go hiking. Each of these platforms serves a different community, each with varied interests. 

There’s nothing wrong to begin by setting up Facebook prospecting and retargeting campaigns. 

But why do you want to limit it to that? 

Why not go the extra mile by creating a list of website users based on your traffic sources? 

Google Analytics should help you out with this. All you need to do is select “Traffic Sources,” ~> “Source” ~> “Medium,” and “Campaign.”

In the example above, you can see we’ve selected users that visited the site from Facebook, and they had viewed our “Valentine Day” promo.

That means that you don’t have to retarget those users within the Facebook network only (Facebook, Messenger, and Instagram). Instead, try to amplify your reach by re-engaging them across Google Display Network, YouTube, and other properties. 

Do the same with users who clicked on your email or were directed to your site via an affiliate site. 

The point is to get retargeted users to view your marketing message or ads on ad channels and marketing platforms. 

2. Flirt with Your Competitors’ Users

As controversial as this sounds, it might be a good idea to set up campaigns that retarget your competitors’ users. 

If they’re really your competitors, their users are probably the same target audience you’re trying to reach.

If you’re comfortable bidding against your competitors, you could try your luck and see if you can also get a slice of their acquisition pie.

It’s not often that they follow up or continue engaging with users that clicked on their ads. If their users find your ad appealing, they’ll click on it and proceed to purchase your product or service. 

Your competitors most likely judge their campaigns by shares or conversion shares. Very few even bother looking beyond that.

There’s nothing wrong with being a little flirtatious with their target audience. Dangle a carrot and see if they’ll bite. If they do, continue engaging with them and see if you can get them to visit your store. 

Additionally, consider using Remarketing Lists for Search Ads (RLSA) to retarget users that visited your website but are still trawling search engines with the same query. 

3.  Use Retargeting to Address the Concerns Users have During their Shopping Process

Retargeting isn’t just about showing ads to users who visited your site and left before buying anything.

It’s also about addressing the concerns they might have had during their shopping process.  

For example, if they didn’t buy because of price or availability issues, you can use retargeting to address those concerns.

If they had issues with shipping, you could let them know that you’re working on making their experience better by implementing a new shipping policy.

You need to show the right amount of empathy if you want to be successful at getting users to come back and convert. 

4. Use Storytelling and Sequential Messaging

A common mistake marketers make is to think of their ad campaign as a one-dimensional interaction. The truth is, it’s not. 

It should be like a story, with every ad serving as another chapter in your overall ad campaign.

You can’t just push offers or deals without any context because it will make no sense to the user. Your messaging needs to be sequential, where each ad builds upon the last until you eventually get to the point that motivates a conversion.

Similarly, you can’t expect people to care about a particular product or feature if they don’t know enough about it. 

That requires a healthy dose of creativity and planning since you’ll need to shoot each ad campaign based on what the previous one achieved.

You also want to make sure the ads are named sequentially. For example, ad2 should follow ad1, and ad3 should follow ad2.

People tend to scroll past ads that don’t mean anything to them, so make each story you tell count.

5. Broaden Your Strategy by Targeting Life Events

Learn to think outside the box with your retargeting campaigns.

If you’re an online store that sells baby products, you might want to target users who have announced their pregnancy on social media or just had a baby shower. You can also target them when they stop by sites related to parenting and childcare for the first time.

Using these targeting criteria, you’ll reach visitors who are expecting a baby, those who have just become parents, and those looking for advice on how to raise their kids – and not just those who are searching for baby products. 

So, why is This Important?

• First, it helps you understand the why — the reason someone may be interested in your product or services, allowing you to personalize your marketing strategy and user experience.
• Second, it helps you understand the who — the individuals you’re trying to reach and where they spend their time online.
• Third, understanding your audience allows you to create a healthy mix of outreach strategies that work together to produce results.
• Fourth, targeting behaviours and actions leads to high relevancy and improved ROI. 
• And lastly, retargeting using behavioural data is a great way to increase brand awareness and ad recall.

6. Contextual Retargeting

The more relevant your ad is, the better results you’ll get.

In other words, you have a higher chance of converting users into customers if they see retargeted ads that are relevant to what they’re already doing online.

If a user is reading an article about a new camera on a blog or news site, chances are they are in the market for a new camera. That’s why you should target them with ads relevant to their interests and whatever activity they like doing online. 

For example, you could segment avid Instagram or Facebook users and target them based on the context of their posts. If they are always taking selfies, you could promote a selfie stick or a lens that would improve the quality of their photos.

And that’s just the beginning! With a contextual ad campaign, you can target users based on their interests, keywords, product category and even location.

The more relevant your ads are to the audience you’re targeting, the higher your chances of converting them into customers.

7.  Optimizing Ad Frequency

Just because you have a targeted user base doesn’t mean your ad will be relevant to them all the time. In fact, if it’s always in their face, they’ll get sick of seeing it and start ignoring or dismissing them altogether. That is why many experts recommend an average frequency of 3-5 impressions per day.

The same rule applies to retargeting campaigns that target new visitors. If they’re browsing your site for the first time, chances are they don’t know much about you or what you offer. That’s why you must small and scale-up, as you learn more about their interests.

8. Call to Action

Your ad needs to have a call-to-action of some sort. That will tell the user what you want them to do next, whether buying an item or subscribing to your newsletter. Most of the time, you don’t need to be too aggressive with this goal since retargeting will bring visitors back to your site.

For example, if you’re selling products online, it’s best not to pop up an ad that says “Buy Now” right after they leave your website. You might alienate or overwhelm them; both scenarios can lead to poor results for your campaign.

Instead, try something like, “Visit Our Shop to See More Products!” That’s a subtle and straightforward call-to-action that won’t intimidate users.

9. Retargeting Your Most Valuable Audience through Personas

It’s hard to talk about audience segmentation without mentioning buyer personas. That’s because the two concepts are connected at the hip.

However, in reality, personas are a complicated piece of work. Not so many people have the time and resources to create, update, and maintain personas.

The good thing about retargeting is that you don’t need to make complicated personas. All you need is a basic understanding of your target audience (based on what they like doing online) and their needs (as long as they’re related to the product or service you’re selling).

Google Analytics makes it even easier to identify users based on their gender, age, location, language, interests, and other traits.

With that data in hand, you can create highly-targeted ads that are relevant to what they’re looking for, leading to higher conversion rates and more sales for your business.