Behavior: A Critical Filter in Target Segmentation

 

Segmentation is the identification of portions of the market that are different from the rest of the market. It’s a classic tool companies use to understand potential customers and their marketing communications’ foundation.

By grouping customers who exhibit similar characteristics, companies can better satisfy potential customers’ needs. In a way, it fundamentally simplifies a broad, perhaps even overwhelming, market into digestible, actionable pieces for targeting.

Though most of us are familiar with how behavioral targeting works in principle — using cookies to track non-personally identifiable online user activities (e.g., destination, clicks, and page views) to establish behavioral clusters — we often still struggle with how to use behavior as a filter to actually segment the target audience.

Publishers and technology vendors have done a tremendous job preaching and educating media planners/buyers on behavioral targeting’s capabilities and have consequently made such campaigns’ implementation fairly simple (it can be as easy as requesting behavioral targeting on the RFP). But though the biggest contributor in driving behavioral targeting adoption and usage, the turnkeyness of the implementation simplicity has somehow fostered a “just let the sellers make it work” mentality.

Sophisticated behavioral targeting requires advanced ways of planning media. Solid segmentation can help establish the right foundation for fruitful campaigns. Segmentation not only is diverse in methodology but requires years of refinement to perfect (e.g., product yield, RFM, etc.); to cover it in its entirety is beyond the scope of this column. However, when it comes to media-campaign-related behavioral segmentation, here are two of the most important filters.

Media Consumption Behavior

Understanding how consumers fundamentally use media can provide invaluable insights into their channel-specific behaviors. Since different segments use media differently, it’s imperative media consumption becomes a crucial segmentation filter.

BIGresearch recently released a new Simultaneous Media Survey, which details the discovery of eight unique media consumption clusters that will “enable advertisers to better allocate dollars in the planning process for increased returns in marketing campaigns.”

According to the study, the eight media consumption clusters are:

• Old School. High mass media (TV, magazines, newspaper) influence and low in search media (online). Average overall media consumption and simultaneous usage.
• Active Explorer. High promotion (inserts, coupons, direct) and search media influence. Average media consumption.
• New Mediacs. Low mass media and promotional media influence. High elcetronics media consumption. Low print consumption.
• Simultaneous Readers. Average overall media influence. High network simultaneous usage. High print consumption.
• Independents. Average search media influence. Low media consumption.
• Ravenous. High overall media influence. High network, print and electronic consumption.
• Persuadable. High mass and search media influence. Average promotional media influence.
• Opportunity Minded. High promotional influence. Average to low media consumption.

Whether these clusters can augment marketing ROI (define) is beyond the discussion of this column, but the identification and definition of these groups is certainly worth considering when it comes to behavioral segmentation, because understanding consumers’ channel consumption behavior is the preface to the actual actions that will take place within the different channels.

Separation of Frequency and Recency

Recency versus frequency has always been a controversial debate when it comes to behavioral targeting. Both have their merits and values, but at the end of the day effective marketing is about a product’s relevance to consumers’ identifiable interests and trackable behaviors.

In a behaviorally targeted campaign, a clear separation of those customers who exhibit frequency-based behaviors and those with recency-based ones may be necessary to develop different creative, messaging, and offers.

Recency is a “reminding,” not a “remembering,” model. The difference is important because reminding is a stimulus that can be controlled but remembering can’t be. It’s not necessarily about whether recency or frequency is more important as a segment, but the fact that depending upon product purchase cycle, a recent action has a fundamentally different marketing value than a frequency action. They should not be treated with uniformed messaging.

What Does This Mean for Online Media?

The classic bases for consumer market segmentation generally include geographic, demographic, psychographic, and behavioralistic.

It’s important to remember behavioralistic segmentation in its classic definition refers primarily to segmentation of actual consumer behaviors toward products such as usage rates, readiness to buy, brand loyalty, and occasions (holidays or events that stimulate purchases). Fundamentally speaking, what we (online media) define as behavioral targeting really refers to a hybrid of psychographic and behavioralistic segmentation from the classic marketing model.

Segmentation is a process-led tool to enable marketers to focus on the subset of prospects that are most likely to purchase their products or services. Since the quality of the target reached is much more important than the volume of the target, segmentation is the first step toward marketing efficiency and effectiveness.

For most marketers, media fragmentation and multimedia consumption are old news; yet for many, behavioral-based segmentation adoption is as new as tomorrow.

Although behavioral targeting has certainly redefined the media value chain and its benefits and capabilities have reached mainstream, actually applying it as a segmentation technique remains a challenge.

As behavioral targeting moves into the offline world, the need to include behavior in consumer segmentation is no longer an option. It’s quickly becoming a planning necessity.