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How To Target Your Online Marketing To Reach The Right Customers With The Right Offer

Oct 9, 2007
If you've been involved in marketing during the past decade, you've probably noticed that things are a bit different since this whole 'online' thing got underway.

While being online has starting to become an 'ordinary' part of many people's day-to-day lives, the experience of being online is very different from any other type of popular media.

Those of us over the age of twenty clearly remember a world without the 'Internet'. Back in those olden days most media consisted of marketing channels to which the majority of the population flocked. In exchange for giving people access to this content, advertisers were given access to the people who came to visit. They tossed their messages in front of us as we wandered around hoping that something would catch our eye. Sometimes it did. Mostly it didn't.

Because these mass marketing models were based on 'quantity' and not 'quality' of consumers, there was an up-front expectation that there would be a tremendous amount of waste. Advertisers understood that even if they were targeting the very best demographic group for an offer the vast majority wouldn't even see or respond to the marketing offer.

For marketers, it was the safety in numbers advertising approach that kept them going.

This approach also trained us, as consumers, to understand that our direct involvement in the marketing process wasn't really necessary. The TV commercials would continue to run whether we watched them or not; the print ads would stay right where they were printed even if we didn't open the magazine or newspaper; the ad on the side of the bus would keep moving down Main Street would keep going even if we ignored it.

But the arrival of the online world started to change things and pretty dramatically. Consumers now have millions of "channels" to choose from and advertisers have fewer places where they will reach mass markets. In fact, the very structure of the Internet means that consumers don't even need to look at or interact with advertising anymore...unless they really want to.

Culturally we've developed a number of ways to share information with one another. We've also learned how to customize messages so that they reach specific people. We never pick up the phone and think 'Okay, I need to talk to every person on Earth. What's the number?' We don't send an email to everybody in the company every time we have a thought to share with Sandy in accounting.

When we start any new marketing campaign we need to first think about who the campaign is trying to reach. What is the ultimate goal? What is the campaign saying? What obstacles can get in the way of the right consumer receiving the message? What should the consumer do to take advantage of the offer?

In the past mass marketing has represented the ultimate delivery mechanism for advertising messages but paints the audience with such a broad brush that its goal of reaching the right people can't be efficiently kept. To be truly effective, a delivery system has to reach the greatest number of individual consumers who can take action on the message being sent.

The bottom line is that a message that reaches 1,000,000 of the wrong people isn't more effective than a message that reaches a single right person.

The ultimate goal of effective advertising is to maximize effectiveness while reducing waste. Correctly targeting a campaign means first identifying who the best people to receive a particular offer are and how to go about identifying where they are.

When we target online audiences that are three primary areas of exploration:

1. Contextual targeting
2. Database targeting
3. Behavioral targeting

Let's take a closer look at the differences between these three areas.

Contextual Targeting

The simple definition for contextual targeting is the placement of messages where the people most likely to be interested are most likely to see it. Contextual targeting is perhaps the oldest type of targeted marketing. For years, trade magazines, area newspapers, local television stations and local radio stations have served as channels for contextual marketing campaigns.

Because each channel caters to a specific range of the population either based on topic interest or region, advertising using contextual targeting has generally meant reaching an audience that has already been 'filtered' down to a common interest or locale.

In online marketing, contextual marketing works in a similar way. Many web sites focus on, or have sections that focus on a single or limited range of topics. Like trade publications, these sites attract a self-selected audience who share a common interest whether its butterfly collecting, paintball battlefield strategies or exploring the validity of UFO sightings. For advertisers looking to communicate with these specific groups, good targeting is as easy as placing topically relevant ads on those pages.

Demographic Targeting

Demography covers a broad range of ways a population can be sliced up to define certain segments. A few of the more traditional segments include:

* Age/ Lifecycle
* Gender
* Race/Ethnicity
* Socioeconomic status
* Location of residence
* Religion
* Nationality
* Occupation
* Education level
* Family size
* Marital status
* Ownership (of home, boat, car, etc.)
* Language

While many of these characteristics can effectively narrow a population down into an audience, traditional demography often offers just a generalized benchmark of behavior.

For example, I currently live in a fairly rural part of the country. While I share a number of demographic characteristics with other people within my particular zip code (middle aged, white, own my own home, went to college, married, speak English, or a variant thereof) those benchmarks do a lousy job at identifying us as a whole or me as an individual. My little town runs the gamut of religious and spiritual beliefs, political leanings, socioeconomic levels, education and what's considered a fun way to spend a Saturday evening. In short, we share very few characteristics as a population apart from our choice to live in the same part of the country.

For marketers trying to reach 'us' based solely on where we live, the results of any geographically targeted campaign are going to be just about as untargeted as you can get.

To reach a more refined group of people based on attributes that aren't as generalized as most demographic groups, marketers need to find ways to measure 'who' consumers are instead of 'what' they are.

Here are a few more recent targeting approaches that marketers are using to reach highly refined audiences.

Psychographic Targeting

For marketers to effectively target any audience they need to have a clear understanding of the personal interests that the target audience shares. Social scientists categorize this segmentation as the study of psychographics. Psychographics are commonly defined as individual attributes directly relating to personality, values, interests or lifestyles. There are sometimes referred to as IOA variables or characteristics (for Interests, Attitudes and Opinions). Psychographics often target the most personal parts of who we are.

We belong to multiple psychographic 'groups' based on our interests as individuals. Our relationship with each group ranges from little involvement to whole involvement. For example, I may take my bicycle out for a short spin on a warm summer day. This action classifies me as a bicyclist and helps me to identify with other people who enjoy riding bicycles. However, my involvement in this group is very different from the guy who's training for an upcoming Tour de France and spends 6 hours a day on his bicycle. My identity with bicycling is one of enjoyable weekend pastime while for the guy in training it's almost on par with being a lifestyle. If given the opportunity to purchase bicycling paraphernalia I'm going to have a different perspective as to its value and necessity than he will.

Marketers looking to reach a thin-sliced audience need to understand common shared traits and how individuals in these groups 'weigh' their interests in these areas. Whether targeting deer hunters, urban dwellers, backgammon players, people of Scotch-Irish descent, unicyclists or guys who mow their lawns on Saturday morning, the value of each psychographic slice is going to depend on how the people in these segments define themselves.

Technographic Targeting

Online targeting is often restricted by technological limitations that prevent marketers from reaching consumers. For marketers to effectively reach consumers it's often necessary to know where potential obstacles or bottlenecks exist.

Technographic targeting focuses on identifying the technological foundations that consumers are using to connect with the Web. This includes things like computer CPU speeds, Internet connection speeds, Operating Systems, browser types, browser versions, and drivers or extra software availability.

A common example of technographic targeting is measuring the online bandwidth capabilities of a visitor to a web site. For example, if, as a marketer, I wished to send a video based ad to my target audience I'm going to want to know if they can receive the ad. While broadband adoption over recent years has made this task easier, there are still millions of people worldwide who are using dial-up modems to get online. Without knowing how my target audience accesses the web, I run the risk of wasting impressions by sending ad content to people who can't receive it.

On the other hand, by measuring the connect speed of my target audience, I can then sort that audience out into sub-groups and provide separate ad units for each group.

Technographic measuring can also tell marketers a lot about a potential customer. A high-tech company looking to introduce a new cutting edge product can effectively target prospects by measuring the operating system on the recipient's computer. Prospects running the most recent versions of Windows or the Macintosh OS might be classified as being technologically savvy while prospects still running Windows 98 on a 7 year old PC are probably not good candidates for marketers looking to reach 'early adopters'.

Centrographic Targeting

While geographical targeting is generally considered part of standard demography there are a few variations that fall outside of the basic geographic targeting realm. Whereas most geographic targeting focuses on regions and areas of the country and world based on their proximately to one another, centrographic targeting focuses more on population characteristics that can be associated with specific regions.

For example, every winter across the Northern United States there is a need for snow removal services. There is also a need for services like heating system maintenance, fuel delivery and sales of things like ice scrapers and snow tires. Meanwhile, in the Southwestern United States the need for these services or products each winter is very limited or non-existent. On the other hand, the hot summers in the Southwest requires air conditioning and home cooling services that are not always necessary in the North.

Centrographic targeting can also identify and isolate differences between population groups. For example, people living in a city like New York are going to have a different perceived need for products and services than people living a few hours north in rural New York might. Even staying within the boroughs of New York, the cultural diversity of different ethnic groups alone makes for dozens of unique regional markets.

Significant differences can also exist among cultural groups that share a similar language and history, or current geography. For example, Hispanic populations living in Southern California and those living in Southern Florida may share common cultural histories and ancestry but represent very unique markets based on unique regional characteristics.

While reaching those audiences requires a new layer of understanding on the parts of marketers, if used correctly the ability to reach more of the right consumers with any marketing offer is also going to result in greater effectiveness and much less waste.

Rob Graham - LearningCraft, LLC.
October 1, 2007
About the Author
Rob Graham is Director of Training at LearningCraft, LLC., a company that provides Online Marketing Training. Join Rob November 15th in Cambridge, MA for the Internet Marketing Boot Camp . Space limited.
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