Behavioral Targeting and Customer Segmentation

• Posted: Thursday, June 26, 2008
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• Author: pradhana
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• Filed under: Target and Segmentation

Letting customers create their own segments

A core behavioral targeting element is the classic marketing technique of customer segmentation—taking a plethora of data events and shaping them into coherent groups that both attract marketers and pinpoint the audience correctly. For example, AOL's Tacoda division lists 31 audience segments such as Active Gamer, Gourmet Chef, Shopaholic and Trendy Homemaker.

Online advertising—including behavioral targeting advertising—is the type of advertising most US marketers use to reach specific customer segments, according to a May 2008 Compete survey.

And while only 39% of US marketers surveyed believe segment-driven marketing is very important in their organization today, a full 84% indicate that it will be more important three years from now.

However, the Compete survey also found that 77% of marketers are having trouble demonstrating real business results from segment-driven marketing, such as improvements in market share. Furthermore, 27% said they see no improved business results from segment-driven marketing efforts.

In fact, according to Compete, the most consistent obstacle to successful segment-driven marketing has been identifying the right segments. This is precisely where behavioral targeting promises to help, since the "right segments" are created by the users and their actions, not imposed on them.

The benefits of improved customer segmentation are fundamental, according to the 568 marketers surveyed by the CMO Council. Better market penetration and growth was cited by 62.7% of respondents, and greater revenue and profitability was mentioned by 52.5%.

Read more - eMarketer

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