Will the Evolution of Digital Marketing Segmentation end with a Zero-Segment?
Back in the 1890s, a man would gather at marketplace to peddle his wares. His reach to potential customers was only as far as his voice could carry him and only to audience in his immediate vicinity. To reach out to more people, he drew up his first poster advertistment and had them plastered across the village.
It wasn’t until 1922 when the first audio advertisement was broadcast and the man would finally have another channel to have his brand heard. And in 1941, though expensive by standard back then, the man would be able to advertise on TV and have visuals on his ads.
Then came the widespread adoption of the internet in 1990s and the game of marketing became digital and reaching out to customers have changed ever since and evolving at a rate never seen in the entire history of marketing. With databases and e-commerce sites, emails and social media, and more recently, mobile devices, all playing a huge part in this revolution.
No longer is a marketer’s reach defined by the proximity of his physical presence nor is his reach limited to the air-time he is offered by a radio or TV station. With some planning and a fraction of the time he needed to invest before, the marketer can showcase his brand on the digital landscape and have results beyond what traditional marketing can bring him. If fact, the reach is so wide, that the concept of segmentation becomes more important than ever before. So let us now take a look at 3 critical stages in evolution of digital marketing segmentation (with a few transition stages in between) and what makes them distinct.
Evolution of Digital Marketing Segmentation
As in the example of the marketer mentioned above, when you stand in the middle of a marketplace and shout out your brand, you reach out to everyone and anyone who is close enough to hear you. Your message may come across as interesting or not depending on the individual, and potentially those who found it interesting enough may come over to you and maybe even make a purchase or two.
In this modern day, the equivalent would be that of you sending a newsletter email to your entire mailing list, or not defining audience details in your Facebook Ads and publishing it.
Although there is a question of quality, there are obvious benefits such as ease of delivery and lower cost of production.
Target Market Marketing
At first glance, radio and TV advertising seems like a mass marketing approach, but if you consider the fact there are the multiple radio stations and TV channels, you’ll come to realize that picking the correct station by factoring in it viewership/listeners to promote your brand in itself might already be the first step in the target market approach.
Generally target markets are identified by certain information broadly categorized as:
- demographics such as gender, location, income, etc…
- business relation like membership tier, total lifetime purchase value, last purchase date, etc…
- behavioural traits may be opens/click rates of newsletter emails, average time spent on website, lead time between purchases, etc…
Target marketing has become an industry-wide minimum requirement for any e-commerce business today largely because for that slight effort put in to defining the segments, the ROI dramatically improves when compared to mass marketing but the road block is usually on the production time and cost of the different marketing messages to cater for the different segments.
Personalized Marketing aka Zero-Segment marketing
Nope, personalized marketing goes way beyond just addressing a customer by his first name. It is what I prefer to term as zero-segment marketing. It is an approach in which the marketer creates the environment for the customer to unknowingly define what advertisement they will be receiving instead of placing customers into baskets and stereotyping their preferences.
Through gathering of consumer data from various touch points such as social media, web behaviour, emails, mobile apps and even offline behaviour such as store visits and call frequency/time, we can not only predictively know what messages to deliver to the customer, but also what time and through which channel.
Though resource intensive and the most difficult to execute out of all the Digital Marketing Segmentation, the rewards from it far exceeds the others in terms of revenue, customer retention and brand recall. And if the 2012 USA Presidential campaign employs it, you should try it too.
Whether it is your Display Ads, Paid Ads or Email Marketing, you would want to know what is the goal of your advertisement, is it for brand awareness or a sales driven advertisement. And from there, employ the optimal approach for your segmenting by factoring in not just your potential market reach but also your budget, time constraint, resources available and technology. Although it is never too early to start learning more about your customers, there may very well be cases where a direct mass marketing message wins you the best ROI and efficiency.
– Winson Chan