What Is Audience Segmentation and How Can it Help Publishers?

Reading time: 8 minutes

Now more than ever, audience segmentation comes with a mountain of benefits for publishers, including increasing revenue for leveraging first-party[7] data[1]. However, so many publishers — especially small and medium-sized publishers — either don’t understand how it works or don’t think it really applies to them.

In this article, we’re going to discuss all things audience segmentation for  publishers. We’ll also talk about the best practices for audience segmentation so you can begin creating a solid audience development strategy to increase your bottom line.

So, to get all your audience segmentation questions answered and to find out what you’re missing, keep reading.

What Exactly Is Audience Segmentation?

Audience segmentation is the act of dividing an audience into segments based on specific criteria. Those criteria typically include behavior, historical data, geographical location, product usage, and other predefined parameters. 

In the ad tech[14] world, audience segmentation is essentially used for ad targeting or re-targeting[15] to create more brand awareness and, of course, leverage more sales. For example, an advertiser[8] may want to create unique ads based on whether they’re trying to appeal to iOS, Android, or Google phone users, or Apple vs PC users. Another great example would be for users that are really into fitness and respond to fitness-related ads.

All this information comes from first-party data, which is broken down and categorized into segments, which is where audience development and segmentation come into play. It’s all about understanding your target audience down to their personal preferences and interests and then presenting them with said preferences and interests to get them to subscribe to your business or become a returning customer. 

Audience segmentation is done via website cookies — also referred to as data cookies or just cookies. These cookies collect valuable data from visiting users on a website, with their permission of course, and then store this information on their web browsers to monitor their activities. Don’t worry, it’s not as creepy as it sounds as these cookies are only meant to monitor things like which websites they visit, the type of ads they engage with, and anything else that would be useful for ad serving.

Additionally, these cookies tend to have an expiration date, which means they don’t monitor a user’s activity forever — just long enough to get critical information for their ad targeting[9] purposes. Of course, the data collected by these cookies get stored using certain data management platforms (DMPs) that sync directly with the advertiser’s demand-side platform[2] (DSP) which keeps the data secure. 

Why Is it So Important to Segment Your Audience?

While it may seem like audience segmentation is mostly beneficial for advertisers on the demand side, we can assure you that it’s just as beneficial for publishers on the supply side — which we’ll talk about in just a moment.

Generally speaking, here’s why it’s so important to segment[16] your audience:

Gain an advantage over the competition

Being the top contender is arguably the most important reason for publishers to segment their audiences. There’s a lot of competition out there in the ad tech world, which can make it difficult for publishers in the online marketing space to successfully sell their ad space. 

By segmenting your audience, you can better target specific audiences with your ads, which puts you in a greater position over your competition to garner higher bids and returning buyers.

Build better relationships with your audiences

With audience segmentation, companies can get more personal with their content by using the information from each segment to tailor that content on an individual level. With this kind of relativity, you’ll be able to build valuable relationships with your customers.

To personalize the entire experience

Once again, tailor-made content that speaks to the individual customer creates a relatable and relevant experience. It makes your audience feel seen, heard, and cared for, which automatically creates trust and brand loyalty. 

With audience segmentation, these types of ads can be delivered at the exact right time. Additionally, since social media channels and search engines are constantly collecting behavioral data and demographic data on users, your marketing approach can be constantly customized to continue connecting with your audience on a personal level.

How Does Audience Segmentation Benefit Publishers?

Put simply, audience segmentation helps with the following:

  • Improving focus on each specific “customer type”
  • Gaining an advantage over the competition
  • Attracting new customers while retaining current ones 
  • Executing a “customer first” marketing strategy
  • Revealing all kinds of new marketing opportunities 

Of course, the keyword here is “targeting” as audience targeting is the single most important component in marketing campaigns. This is exactly where audience segmentation gives publishers the upper hand. 

How, you ask?

Only publishers are able to access user information and segment it into first-party data. Once a publisher[17] gets a hold of this information and stores it securely, they can sell it to advertisers. Advertisers are usually willing to bid higher for an accurately segmented audience, and this is because relevant ads result in higher conversion rates.

Lastly, audience segmentation also helps publishers create more engaging content experiences. This is because the first-party data gained offers them valuable insights, such as the time of day when users are most active, the type of content that gets the most engagement or viewability[10], and how the quality of the content can be improved based on the various engagement rates.

How Can Publishers Segment Their Audiences?

The first thing to understand about segmenting audiences is that among other types of data, the aforementioned cookies collect behavioral data about users. The second thing to understand is this data must be properly stored and utilized, otherwise it just goes to waste. Therefore, you would need the appropriate tools for segmentation, such as a data management platform[3].

Fortunately, you don’t have to get that technical about it considering Google Analytics[4] has certain features and functions that act like a DMP. The same goes for Google AdSense[11], as Google automatically transfers information among its products. Of course, if you’re using other platforms for ad networks and ad exchanges, you’ll need to find yourself a data management platform to store and utilize user information. 

Lastly, Google Ad Manager[5] makes it very easy to go through the steps of segmentation. Essentially, all you have to do is sign into your account and click on Inventory[18] > Audience > New audience segment.

From there you would go into more detail about the categories for each segment, enabling pixel segments, and so on. You can see the in-depth step-by-step process right here.

Common Filters for Audience Segmentation

Ultimately, your audience segmentation will depend entirely on the advertiser’s requirements. However, to get started, you can create segments based on the most typical criteria, which are demographics. 

Segmentation using demographics will allow you to filter your audience based on things like age, gender, language, location, income, ethnicity, occupation, family structure, and much more. As simple and basic as they may seem, advertisers are always looking for this information from a first-party data source for their audience targeting.

From there, the filters are as follows:

Behavior

Segmenting an audience based on user behavior can help you to better understand the user’s actions and interactions. It’s also used for behavioral targeting[6], which can be evaluated based on a user’s session and the information gained during each session such as the duration, the amount of location of clicks, and the bounce rate[12]

This data also helps publishers improve their own web pages as well in regard to user interactions.

Technology

When we say technology, we’re referring to OS, browser, screen resolution, device category, and other related filters. Additionally, if mobile audience targeting is needed, publishers can add in segments based on mobile device usage, including the brands and device models. 

This type of data is used for more technical targeting, which is incredibly effective when combined with user behavior data. 

Traffic source

Traffic source segmentations give publishers insight into the source of their visitors. It can be any number of things, including direct traffic[13], organic, paid campaigns, social media, referrals, and other ways of garnering traffic. Traffic source data can also help companies prepare attribution models or just give insight into the audience’s journey to their website.

Aside from these segmentation filters, publishers can also break down their audiences based on more acute parameters. This could include acquisition channels, product clicks, goal conversion, and more.

Best Practices for Segmentation Success

Plain and simple, here’s how to execute audience segmentation the right way:

Create customer personas based on the data

The first step in creating successful audience segments is by creating customer personas based on accurate data. This means zeroing in on critical demographics like age, location, ethnicity, family size, and income. 

From here you can build on your customer personas based on your customers’ preferences, behaviors, interests, and so on. Use this to create “customer groups” to fit into specific marketing campaigns. 

Get as much information as possible about your customers

You’ll need to go beyond the demographics and behaviors to create the perfect audience segments. You’ll also need to dig deeper than users’ historical data. 

At this point, you’ll want to accurately map out customer journeys in great detail to help you figure out how to deliver the most relevant messaging for the best impact. This also means figuring out which format, platform, or channel is best suited for each segment as well as what it is that makes your customers want to engage within each channel.

Make use of different channels

Everyone has a preferred platform, but that doesn’t mean you should limit yourself to it. Audiences are spread far and wide, which means you’ll want to explore the different possible channels to ensure that you’re reaching as much of your audience as possible. 

You’ll also want to ensure that you’re building a strong presence on each channel that shows positive responses.

Test your segmentation strategy often

Audience segmentation takes a good amount of trial and error before figuring out what’s working and what isn’t when it comes to reaching potential customers. Therefore you’ll want to make sure that you’re measuring data from existing strategies and implementing A/B tests frequently.

Strike the right balance

You don’t want your segments to be too vague or too narrow as they’ll simply become irrelevant. You need to maintain the right balance to ensure that your message is both relatable and reaches the right people.

This is why it’s necessary to provide personalized and engaging content first and use audience segmentation second as a supportive tool for your marketing goals.

Other Segmentation FAQs

1. What is the purpose of audience segmentation?

Audience segmentation is the process of dividing your audience into segments or categories. These segments are based on specific criteria like geographical location, historical user data[19], user behavior, product usage, certain demographics, and more. 

In the ad tech industry, audience segmentation’s purpose is for ad targeting to ensure that companies are reaching the audience that would be the most likely to respond to their products or services as well as make a purchase decision. 

2. What are the different types of audience segmentation?

There are technically four types of audience segmentation. This would include the following:

  • Demographic segmentation
  • Behavioral segmentation
  • Technological segmentation
  • Traffic sources segmentation

Once again, all are used for specific targeting and some can be combined to deliver the most relevant messages to an audience at the most opportune moment. 

3. What are some important audience segmentation tips?

The most important audience segmentation tips would be to follow the best practices for the job. This would include the following:

  • Focus on creating your customer personas based on accurate data
  • Find out as much information on your customers as possible
  • Explore the different channels to see where else you can get favorable engagement
  • Make sure you’re testing your segmentation strategies frequently using A/B testing
  • Keep your segmentation simple and balanced by personalizing your segments to reach the right audience at the right times
Terms
1. first-party data. First-party data is the information that companies can collect from their own sources. In other words, every information about customers from both online and offline sources, such as the company's website, app, CRM, social media or surveys is first-party data.
2. demand-side platform. A Demand Side Platform or DSP is a platform where advertisers can buy digital inventory to easily and more directly connect with sellers in a programmatic and real-time ecosystem.
3. data management platform. A platform that unifies and centralizes collecting, organizing, and activating large sets of data from disparate sources. Any audience built within the DMP can be defined and analyzed using audience profile reporting.
4. Google Analytics. This is Google’s traffic tracking and analytics tool that gives publishers insight into traffic origins, popular pages on their website and much more.
5. Google Ad Exchange ( Google Ad Manager ) Ad Exchange is often referred to as the premium version of AdSense, and also a Google-owned ad network of sorts. To join Ad Exchange, publishers need to meet specific requirements such as 500 000 minimum monthly traffic, be invited or join through a Google certified partner. Recently Google has rebranded this product, and it is now called Google Ad Manager.

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